The week the guidance went up

Between 4 and 7 August the eight publicly traded American local gas distribution companies reported June-quarter results, and the direction of travel was almost uniformly upward.

ONE Gas, a pure-play distributor serving 2.2 million customers through Oklahoma Natural Gas, Kansas Gas Service and Texas Gas Service, grew adjusted earnings per share 52% to $0.82 despite weather 25% warmer than normal, and raised full-year guidance to the upper half of its range at $4.89–$4.95. Spire, the St Louis holding company that owns the Missouri and Alabama gas utilities, sold its Marketing and Storage arms to become fully regulated and reaffirmed a step from $3.90–$4.10 this fiscal year to $5.40–$5.60 next, roughly 40%. Northwest Natural, which serves 786,000 meters in Oregon and southwest Washington, guided to the top half of its $2.95–$3.15 range and won new Washington rates effective 1 August at a 9.5% allowed return on equity. Southwest Gas, the Arizona and Nevada distributor, grew adjusted EPS 22% and enlarged its Great Basin pipeline expansion to about $2.3bn with roughly 1 Bcf/day contracted, after an open season drew bids near 2.5 Bcf/day. New Jersey Resources raised its guidance midpoint. Chesapeake Utilities, which distributes gas in Delaware, Maryland and Florida, announced the Florida Energy Pathway — a 97-mile, $1.2bn transmission line from Palm Beach to Miami-Dade anchored by shippers committing 250,000 dekatherms a day — and lifted its dividend 7.3%.

What actually moved the shares

The long end of the curve. The 10-year Treasury yield pushed above 4.7% on 12 August, near its highest since January, with the 30-year above 5.1%, extending a rise that took the 10-year past 4.6% in July. Bond-proxy utilities re-price against that. Over the same 30 days the five large regulated electric utilities fell an average 5.8% — American Electric Power 9.0%, WEC Energy 7.9% — against the gas distributors' 3.4%. The gas names diverged by falling less, not more.

The damage was also concentrated where index ownership is heaviest: NiSource, New Jersey Resources and Atmos took the month's losses, while ONE Gas, Spire, Southwest Gas and Chesapeake finished within 1.3% of flat. Over twelve months it was the small caps that carried the group — Northwest Natural, New Jersey Resources and Southwest Gas each up 15% or more — while Atmos gained 2% and NiSource lost ground.

The exception, and the soft spot

NiSource, which runs the Columbia gas utilities across five states plus the NIPSCO electric system in northern Indiana, is the one name where the business matches the tape. Second-quarter net income fell to $45.5m from $102.2m and adjusted EPS to $0.16 from $0.22. On earnings day Indiana regulators denied its full gas-modernisation tracker recovery, demanding better documentation of customer benefits. Management reaffirmed 2026 adjusted EPS of $2.02–$2.07 and points to a data-centre pipeline of up to 9 gigawatts and a $28.6bn 2026–2030 capital plan, with signed Amazon and Alphabet load expected to return about $1.4bn to Indiana customers.

Atmos Energy, the largest US pure-play gas distributor, has a narrower problem: spreads on its Texas pipeline arm averaged $4.66 over nine months against $1.77 a year earlier but tightened once two new takeaway pipelines started up in late June and July, and full-year operating and maintenance cost guidance rose to $875–885m. The utility itself is unbothered — nine-month EPS of $7.33 is up 14.5%, $396m of annualised rate increases are implemented with $334m more filed, and 51,000 net customers were added.

Valuation

Business verdict: CONTRADICTS the move for six of eight; CONFIRMS it for NiSource. Valuation verdict: the de-rating is real and not obviously earned. Against this desk's own 3 May readings, Atmos has gone from 24.4x trailing earnings to 20.0x, NiSource 24.9x to 22.1x, ONE Gas 20.2x to 17.1x and Northwest Natural 19.3x to 16.4x. On fiscal 2027 consensus the group sits at roughly 15–19x, with Spire at 14.9x and Southwest Gas at 18.7x; trailing multiples for those two are distorted by one-off divestiture and deconsolidation gains and carry no information.

Two cautions survive the screen. New Jersey Resources' consensus 2027 EPS of $3.42 sits below 2026's $3.57, so its forward multiple rises with time rather than falling — the last twelve months' gain partly capitalised. Spire's funds-from-operations-to-debt ratio is 13% against a 14–15% target it does not expect to reach until end-2028.

On the tape, Atmos's 50-day average slipped below its 200-day in early June and has stayed there; NiSource's did the same only on 5 August, immediately after earnings — the single technical event that agrees with a fundamental one. New Jersey Resources, down 7% on the month, is still in an uptrend by the same measure.

The setup

Where it stands — Six of eight gas distributors raised guidance in August while their shares fell with the long bond; NiSource alone missed.

Would confirm — Spire's Alabama rate case lands near its 10.5% requested return, and ONE Gas prints full-year adjusted EPS inside $4.89–$4.95.

Would invalidate — Atmos cuts fiscal 2026 EPS guidance below $8.40 as Texas pipeline spreads compress further, or Nevada awards Southwest Gas nearer the intervenors' $40m.

Watch next — Alabama return-on-equity decision in September; Nevada rates effective October; Indiana order on NiSource's 400 MW Amazon expansion by November.

Valuation — Group at roughly 15–19x fiscal 2027 consensus, against trailing multiples of 19–25x for the same names in May.