One Gas Inc. (OGS 1.37%) reported its second-quarter results after the closing bell on Wednesday. The natural gas utility was able to overcome much hotter than expected weather to deliver solid earnings growth, as the company kept its costs in check and benefited from new rates on its pipeline system. As a result, the company is affirming its full-year guidance.

A look at the numbers
One Gas reported second-quarter net income of $12.1 million, or $0.23 per share. That was up from $9.5 million, or $0.18 per share, in last year's second quarter and beat the consensus analyst estimate by a penny per share. That said, this was much lower than the $60.4 million, or $1.13 per share, the company earned last quarter, but that's to be expected, as One Gas' business is very seasonal.

The primary driver of the year-over-year increase in net income was new rates from pipeline system integrity investments, which helped to offset weather effects. The much warmer than expected weather muted demand for natural gas. In fact, this past quarter was 26% warmer than normal and 30% warmer than the second quarter of last year.

Also boosting the bottom line was that the company did a solid job keeping its costs in check, as total operating costs fell by roughly 5% year over year. Some of this decrease had to do with no spinoff-related costs this quarter. However, the company was also able to achieve a whole host of additional expense reductions, including lower legal costs, employee-related expenses, and information-technology expenses.

One Gas ended the quarter with $135.9 million in cash on its balance sheet and no borrowings under its credit facility. While its cash position is down $6.6 million over last quarter, that's not a concern, as the second and third quarters bring seasonally lower cash flow. Further, the company's total debt-to-capitalization ratio remains at approximately 40%, which is no change from last quarter. Overall, the balance sheet remains solid, as the company has plenty of cash to maintain dividend payments during the seasonally weak summer quarters. 

A look at the outlook
As a result of the company's good quarter, it's comfortable with maintaining its full-year net income guidance in the range of $108 million to $118 million. Further, the company still expects to spend roughly $300 million on capital expenditures, with 70% of the funds being spent on system integrity and replacement projects.

Investor takeaway
One Gas is a sleepy Midwestern natural gas utility. Its results are fairly predictable each quarter. But predictability is just fine, as it means the company's $0.30-per-share quarterly dividend isn't going anywhere.