OGS Q2 Earnings Surpass Estimates on Higher Rates, Sales Decline

ONE Gas recorded revenues of $411.64 million, which missed the Zacks Consensus Estimate of $440 million by 6.45%. The top line also decreased 2.9% from $423.74 million in the prior-year quarter.

OGS Revenue Trends and Volume Mix

Natural gas sales were $357.8 million, down 3.2% from $369.5 million in the second quarter of 2025. Transportation revenues increased 2.6% to $31.8 million, while other revenues rose 11% to $11.1 million. Securitization customer charges declined 17.4% to $10.9 million.

The company generated $16.4 million of incremental revenues from new rates, $1.4 million from higher residential sales, primarily reflecting customer growth in Oklahoma and Texas, and $1.3 million from increased line-extension revenues in Oklahoma.

ONE Gas Earnings Drivers and Regulatory Progress

Total natural gas volumes delivered were 66.6 billion cubic feet, down 1.48% on a year-over-year basis. OGS served 2,308,000 customers, up 0.26% year over year. 

Sales volumes fell 15.9% to 15.9 billion cubic feet, while transportation volumes increased 4.1% to 50.7 billion cubic feet.

Total operating expenses were $238.7 million, up 2% year over year. The increase was due to higher operations and maintenance expenses, which rose 6.6% to $139.6 million, reflecting higher employee-related costs, outside services and fleet expenses.

Operating income totaled $82.7 million, up 15% from $71.9 million recorded in the year-ago quarter.

Net interest expense declined 11.8% to $31.1 million, primarily due to lower-rate commercial paper borrowings and the implementation of Texas House Bill 4384. These factors supported the sharp year-over-year improvement in adjusted earnings.

Texas Gas Service received approval for a $36.9 million revenue increase under its Gas Reliability Infrastructure Program. The new rates became effective in July 2026, supporting the recovery of investments in system reliability.

ONE Gas Cash Flow and Balance Sheet

Cash and cash equivalents amounted to $30.6 million as of June 30, 2026, compared with $33.7 million as of Dec. 31, 2025.

As of June 30, 2026, total long-term debt (excluding current maturities) was $2.34 billion, down from $2.36 billion as of Dec. 31, 2025.

Cash provided by operating activities totaled $387.3 million during the first six months of 2026, down from $448.8 million in the comparable 2025 period. Capital expenditures totaled $330 million compared with $347.1 million a year ago.

ONE Gas Raises 2026 Earnings View

OGS expects its 2026 adjusted net income in the range of $306-$314 million.

The company projects 2026 adjusted earnings in the range of $4.83 to $4.95 per share. The Zacks Consensus Estimate for EPS is pegged at $4.88, which is slightly below the midpoint of the company’s guided range.

In 2026, OGS plans to make capital investments, including asset removal costs, of $800 million and nearly $230 million for new customer extensions.

OGS’ Zacks Rank

Currently, ONE Gas carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Consolidated Edison ED is slated to report second-quarter 2026 results on Aug. 6, after market close. The Zacks Consensus Estimate for earnings is pegged at 74 cents per share, which implies a year-over-year increase of 10.45%.

ED’s long-term (three to five years) earnings growth rate is 6.32%. The Zacks Consensus Estimate for second-quarter sales is pinned at $3.74 billion, which suggests year-over-year growth of 4.17%.

MDU Resources Group, Inc. MDU is scheduled to report second-quarter 2026 results on Aug. 6. The Zacks Consensus Estimate for EPS is pegged at 8 cents, inidicating an increase of 14.29% from the prior-year figure.

MDU’s long-term earnings growth rate is 5.54%. The Zacks Consensus Estimate for second-quarter sales is pinned at $398 million, which suggests year-over-year growth of 13.32%.

PPL Corporation PPL is scheduled to report second-quarter results on Aug. 7, before the market opens. The Zacks Consensus Estimate for earnings is pegged at 35 cents per share, which implies year-over-year growth of 9.38%.

PPL’s long-term earnings growth rate is 7.52%. The Zacks Consensus Estimate for second-quarter sales is pinned at $2.18 billion, which suggests year-over-year growth of 7.50%.

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