Abstract
ONE Gas will report quarterly results on February 18, 2026 Post Market; this preview consolidates management’s latest guidance and market-reported estimates alongside recent corporate updates to frame expectations for revenue, margins, net income, and adjusted EPS.
Market Forecast
For the current quarter, ONE Gas’s internal and market-linked forecasts point to revenue of $756.77 million, an EBIT estimate of $158.20 million, and adjusted EPS of $1.43. Year-over-year, the revenue estimate implies a decline of 22.27%, with EBIT projected to rise by 17.74% and adjusted EPS to increase by 6.93%. Management’s recent disclosures point to steady cost discipline supporting margins; however, revenue normalization after last winter’s elevated volumes is the core narrative. Last quarter’s main business was natural gas distribution, with revenue of $326.98 million; the most promising commercial component this quarter is expected to be margin resilience led by regulated cost recovery, supported by EBIT growth of 17.74% year-over-year.
Last Quarter Review
ONE Gas’s previous quarter delivered revenue of $379.13 million, a gross profit margin of 43.60%, GAAP net profit attributable to shareholders of $26.47 million, a net profit margin of 6.98%, and adjusted EPS of $0.44, with year-over-year growth in revenue of 11.38% and adjusted EPS of 29.41%. One operational highlight was a positive EBIT trajectory, with actual EBIT at $65.38 million and year-over-year growth of 9.98%, reinforcing disciplined expense management despite mixed volume trends. The main business breakdown was led by natural gas at $326.98 million, transportation revenue at $30.96 million, securitized customer fees at $11.22 million, miscellaneous at $5.92 million, other at $3.69 million, and other gas-related revenue at $0.38 million.
Current Quarter Outlook
Main Business: Regulated Natural Gas Distribution
The regulated natural gas distribution franchise remains the bedrock of ONE Gas’s quarterly earnings profile. The revenue estimate of $756.77 million suggests a year-over-year decline of 22.27%, reflecting normalization from last year’s weather-aided consumption and pass-through commodity swings rather than structural deterioration. In this context, earnings are expected to be cushioned by cost recovery mechanisms, stable tariff frameworks, and a constructive regulatory backdrop. The gross profit margin performance last quarter at 43.60% and net margin at 6.98% signal that the company maintained unit economics through cost discipline and operating efficiency. The current quarter’s EPS estimate of $1.43 implies that pricing, cost controls, and non-fuel O&M optimization may counterbalance volume headwinds. In regulated utilities, volumetric variability often impacts top-line more than bottom-line, especially when thermal demand moderates; ONE Gas’s guidance framework suggests EBIT will grow by 17.74% year-over-year even as revenue declines, pointing to mix, rate structures, and controllable expense optimization.
Most Promising Business: Margin Resilience and EBIT Expansion
The forecasted EBIT of $158.20 million with a 17.74% year-over-year increase is a central pillar supporting the company’s earnings trajectory this quarter. Despite revenue normalization, the earnings construct appears underpinned by rate recovery, deflation in certain input costs compared with last winter’s elevated commodity backdrop, and operating improvements visible in recent quarters. Last quarter’s adjusted EPS of $0.44 grew 29.41% year-over-year, reflecting incremental efficiency and potentially favorable timing on cost pass-throughs; the current quarter’s EPS estimate of $1.43 and its 6.93% growth expectation aligns with these themes. Margin resilience depends on stable distribution spreads and regulatory deferrals that smooth volatility; if winter demand proves milder year-over-year, the earnings template still benefits from controllable costs and rate trackers, limiting downside to net income. The EBIT expansion thesis is also compatible with a lower-than-prior-year revenue base if non-commodity components of the bill are recovering and the utility has executed on opex programs.
Stock Price Drivers This Quarter
Three factors are likely to weigh most on the stock during the print and the immediate aftermath. First, the revenue print versus expectations: with the estimate at $756.77 million, investors will scrutinize any deviation tied to weather variability and commodity pass-throughs, interpreting top-line changes as transient or indicative of demand shifts. Second, the margin and EPS outcome: if gross margin holds close to last quarter’s 43.60% while EPS lands around $1.43, the market may favor the narrative of cost control and regulatory predictability; any divergence will be mapped to operating cost trends and timing of recoveries. Third, the utility’s capital allocation signal: the January 2026 dividend increase to $0.68 per share suggests management confidence in cash flow stability; confirmation of a similar tone in guidance could temper concerns around revenue volatility. An upside surprise in EBIT relative to the $158.20 million estimate would likely be interpreted as validation of operational execution, whereas weakness would prompt questions on opex and rate recovery cadence.
Analyst Opinions
Within the January 1, 2026 to February 11, 2026 window, published institutional previews are limited; however, corporate actions have been used as proxies in forming short-horizon views. The most relevant update is ONE Gas’s dividend increase announced on January 21, 2026 to $0.68 per share, which market participants often treat as a cautiously constructive signal for near-term earnings quality and cash flow. Among the sparse publicly available commentary in this period, the balance of views trends mildly bullish, anchored by the dividend action and the forecasted EBIT growth of 17.74% despite a projected 22.27% revenue decline. In this majority view, the thesis emphasizes regulated stability, cost control, and consistent rate recovery as mitigants to top-line variability. Analysts pointing to EPS estimates at $1.43 and EBIT holding near $158.20 million frame a scenario in which margins and earnings quality remain intact. The bullish camp expects management to reiterate operational resilience and provide visibility on opex and regulatory trackers, arguing that the earnings algorithm can absorb weather normalization without materially impairing net profitability. In their read-through, revenue downshifts are episodic, while EBIT and EPS progression reflect an improving efficiency baseline, supporting the dividend policy and setting the tone for the remainder of the fiscal year.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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