Atmos Energy Navigates Positive Waha and Capacity Ramp, Keeping FY26 EPS in Range

Impact of Waha back in positive territory and new takeaway capacity on APT’s near-term earnings power and utilization

1) What “Waha back in positive territory” implies for APT’s near-term economics

Management explicitly connects Waha/SPREAD conditions to APT performance through the concept of “spread opportunities” and the timing of when additional takeaway capacity comes online. In the near term, they report that spreads have tightened significantly beginning in June as additional takeaway capacity has come online (some sooner than expected), and that this dynamic has affected APT’s incremental spread capture versus earlier in the year. ¹

They also indicate that, given the narrowing spreads, the company expects APT-related contribution to be toward the lower end of the previously discussed 2H range: specifically, they were in the $0.08–$0.12 range in the third quarter with the tightening, and they say the lower end is more appropriate at this point. ² Additionally, management ties this back to near-term monitoring through the fall and heating season rather than making precise forecasts. ³

Earnings-power takeaway: When Waha is “back in positive territory,” the most direct observable impact from the excerpts is not a one-time EPS jump; rather, it’s associated with an environment where incremental capture is increasingly limited because spreads compress as takeaway capacity increases. ⁴¹²

2) How new takeaway capacity affects APT utilization and utilization-driven revenues

The excerpts describe a clear causal mechanism: additional takeaway capacity coming online reduces constrained takeaway dynamics, which in turn compresses spreads. In particular, management says spreads narrowed significantly as additional takeaway capacity came online (some sooner than expected), and that pipes expected to go online in the fourth quarter came online in late June and late July and are beginning to ramp—a ramp that has been “causing the compression of the spread.” ⁵¹

Utilization implication (from the company’s own framing)

While the excerpt doesn’t provide a specific utilization percentage for APT, it does state that the operational outcome of capacity coming online is less spread opportunity due to reduced constraints. ⁵¹ In other words, the near-term operational environment suggests:

• Higher effective takeaway availability (capacity ramps) ⁵
• Reduced congestion-induced spread separation (spread compression) ⁵¹
• Therefore, utilization may rise or become less capacity-constrained, but the incremental earnings per unit of throughput falls because pricing/spread economics are less favorable. ⁵¹

Utilization/economic takeaway: Near-term utilization dynamics likely improve with the new capacity ramps, but APT’s incremental earnings power declines relative to periods when takeaway was more constrained—reflected in management’s guidance position at the lower end of the EPS driver range tied to spreads. ⁵¹²

3) Net effect on near-term EPS guidance / earnings power

Management reaffirms overall fiscal 2026 EPS guidance while acknowledging the spread-compression headwind.

• They reaffirm EPS guidance of $8.40 to $8.50 for fiscal 2026. ⁵¹⁶
• They also state they are standing by that EPS range while waiting to see where the fourth quarter takes them “in terms of spread opportunities and other operational factors.” ⁵
• They further explain they budgeted a benchmark for Rider REV and will monitor through the remainder of the summer-to-fall transition; they explicitly discuss demand/load uncertainty (cooling load in late summer, winter/fall demand showing up early causing a spike in demand). ³

Earnings-power takeaway: Even with Waha “back in positive territory,” the company’s near-term EPS picture remains bounded by spread compression from capacity ramping, hence the expectation of being nearer the lower end of the $0.08–$0.12 incremental band for APT-related spread impact rather than at the top. ⁵¹²

4) What to expect as more capacity comes online over the next several quarters

The question references “additional takeaway capacity coming online over the next several quarters.” The excerpts provide two key timing elements:

1. Fourth quarter calendar year ramp events: pipes came online earlier than expected (late June and late July) and are beginning to ramp, compressing spreads. ⁵
2. Ongoing monitoring into fall/heating season: management emphasizes that they will “budget the benchmark” and observe what happens as the heating season approaches and demand patterns emerge. ³

Near-term forward-looking implication (as supported by management’s commentary):

• As takeaway capacity continues to ramp, the company expects spread opportunities to remain constrained/tighter, which caps incremental earnings power from APT spread capture versus earlier constrained periods. ⁵¹
• Therefore, APT utilization may not be the limiting factor; instead, spread economics appear to be the key near-term driver they are managing through their EPS range. ⁵¹²

Bottom line

Based on the excerpts, the combination of Waha returning to positive territory and additional takeaway capacity ramping should (1) improve physical takeaway availability but (2) compress spreads, which (3) reduces incremental APT earnings power and leads management to expect APT’s spread-related contribution to be closer to the lower end of the $0.08–$0.12 band, while reaffirming overall FY26 EPS of $8.40–$8.50 and continuing to monitor through Q4/Fall. ⁴⁵¹²