NiSource, Inc (NI) Earnings & Analysis

Latest quarter

NiSource reported Q2 FY2026 revenue of $1.3 billion, compared with $1.3 billion in Q2 FY2025, with revenue change on a year before of 4.63%. On the basis used for the consensus comparison, the company reported revenue of $1.4 billion, above the consensus of $1.3 billion, and adjusted EPS of $0.16, above the consensus of $0.15.

The company reported diluted EPS of $0.09, compared with $0.22 a year earlier, while gross margin was 85.6%, compared with 79.6%, and operating margin was 17.0%, compared with 20.5%. NiSource reported free cash flow of −$417.0 million, compared with −$162.8 million a year earlier. Shawn Anderson said Q2 adjusted EPS of $0.16 compared with $0.22 in the prior-year quarter, as revenue from new rates and recovery mechanisms was offset by higher operating and maintenance expense associated with storm activity and workforce continuity costs.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

Shawn Anderson said NiSource expected earnings growth to be weighted toward the second half of 2026, supported by approved recovery mechanisms, new regulatory activity in Virginia and Ohio, and Alphabet energization activity. He said the company had identified more than $40.0 million of cost-optimization initiatives, including process improvements and technology-enabled efficiencies, intended to lower costs while maintaining service quality.

On regulatory recovery, Lloyd Yates said NiSource had filed rate cases in Virginia and Kentucky and expected decisions on both filings by the first half of 2027. He said the company was reviewing an Indiana order concerning gas modernization investments, while remaining able to seek recovery through other tracker mechanisms or rate cases. Anderson told analysts that NiSource was not reporting a change in its capital-expenditure plans or EPS outlook following that order and said the company had recovery mechanisms in place for near-term investment.

Yates said the company’s agreements with Amazon and Alphabet were expected to provide approximately $1.4 billion of bill reductions for existing NIPSCO Electric customers over their contract terms. He said demand from large-load customers included three gigawatts in active strategic negotiations and approximately two gigawatts of additional potential customers. When asked about a specific Microsoft opportunity, Yates declined to comment on that opportunity, while saying NiSource had signed four gigawatts and was assessing opportunities beyond its nine-gigawatt pipeline.

Anderson said the five-year capital outlook remained unchanged and included $7.6 billion of GenCo capital investment supporting data-center customers. He said the company remained committed to maintaining FFO to debt of 14.0% to 16.0% in each year of its plan, supported by cash from operations, long-term debt, annual equity issuance and minority-interest contributions.

Guidance

NiSource’s October results release expects FY2027 non-GAAP consolidated adjusted EPS of $2.22–$2.30. The company states that the range is for consolidated adjusted EPS on a non-GAAP basis for FY2027.