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NATIONAL FUEL GAS CO (NFG)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 FY2025 delivered strong results: adjusted EPS of $2.39, up 34% YoY, and GAAP EPS of $2.37, up 32% YoY, driven by higher realized natural gas prices, record Seneca production, and NY rate case tailwinds in the Utility segment .
  • EPS beat Wall Street, while revenue missed: EPS $2.39 vs $2.21 consensus (beat), revenue $729.95M vs $774.56M consensus (miss); adjusted EBITDA outperformed at $428.5M vs $410.0M consensus (*Estimates values retrieved from S&P Global).
  • FY2025 adjusted EPS guidance raised to $6.75–$7.05 (prior $6.50–$7.00), reflecting higher production and lower unit costs; E&P production guidance increased to 415–425 Bcf (prior 410–425 Bcf), LOE narrowed down to $0.68–$0.69/Mcf (prior $0.68–$0.70) .
  • Catalysts: continued outperformance in Tioga Utica wells (Gen 3 design), strengthening rate base growth in regulated businesses, and balanced capital allocation with a large $1B refinancing completed; management reiterated buyback execution through CY2025 amid macro uncertainty .

What Went Well and What Went Wrong

What Went Well

  • Record Seneca production of 105.5 Bcf (+3% YoY, +8% QoQ) with EDA pads driving higher productivity and improved capital efficiency; “These wells are the best we've turned in line since the inception of our Utica program” .
  • Utility EPS strength from NY rate settlement: Utility segment GAAP net income rose to $63.5M (+42% YoY), with customer margin +$22.2M and other income +$10.8M due to pension/OPEB accounting effects embedded in the settlement .
  • Hedging and pricing tailwinds: weighted average realized gas price after hedging rose to $2.94/Mcf (+$0.38 YoY); CFO added 76 Bcf in FY’26–’27 swaps/collars with floors around $4 and caps near $5.50, “no-brainer hedges” preserving upside .

What Went Wrong

  • Revenue miss vs consensus: $729.95M vs $774.56M; Pipeline & Storage revenue essentially flat YoY, and Gathering GAAP earnings fell YoY due to higher O&M and DD&A (*Estimates values retrieved from S&P Global).
  • Basis widening risk flagged despite constructive price environment; management expects seasonal widening exiting winter, partially offset by power demand and depleted East storage levels .
  • Corporate/All Other loss (-$3.1M) as higher interest expense and lower investment income weighed; debt premiums from early redemption impacted comparability (after-tax ~$1.7M) .

Financial Results

Consolidated Results vs Prior Periods

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$629.94 $549.48 $729.95
GAAP Diluted EPS ($)$1.80 $0.49 $2.37
Adjusted EPS ($)$1.79 $1.66 $2.39
Adjusted EBITDA ($USD Millions)$369.56 $337.36 $428.53
Adjusted EBITDA Margin (%)58.7% 61.4% 58.7%

Q2 2025 vs Wall Street Consensus

MetricConsensusActualResult
EPS ($)2.21*2.39 Beat
Revenue ($USD Millions)774.56*729.95 Miss
EBITDA ($USD Millions)409.99*428.53 Beat

Values with asterisk (*) retrieved from S&P Global.

Segment Earnings (GAAP)

Segment ($USD Millions)Q2 2024Q2 2025
Exploration & Production$62.07 $97.83
Pipeline & Storage$30.74 $31.71
Gathering$28.71 $26.34
Utility$44.74 $63.54
Corporate/All Other~$0.03 $(3.06)
Consolidated$166.27 $216.36

KPIs (E&P Operating Metrics)

KPIQ2 2024Q1 2025Q2 2025
Production (Bcf)102.88 97.72 105.51
Weighted Avg Gas Price ($/Mcf)$1.98 $2.23 $3.02
Realized Price after Hedging ($/Mcf)$2.56 $2.53 $2.94
LOE ($/Mcf)$0.68 $0.67 $0.67
DD&A ($/Mcf)$0.71 $0.65 $0.61

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated Adjusted EPSFY 2025$6.50–$7.00 $6.75–$7.05 Raised
Consolidated Effective Tax RateFY 2025~25% ~25% Maintained
Consolidated CapEx ($MM)FY 2025$885–$960 $885–$960 Maintained
E&P CapEx ($MM)FY 2025$495–$515 $495–$515 Maintained
Pipeline & Storage CapEx ($MM)FY 2025$130–$150 $130–$150 Maintained
Gathering CapEx ($MM)FY 2025$95–$110 $95–$110 Maintained
Utility CapEx ($MM)FY 2025$165–$185 $165–$185 Maintained
NYMEX Gas (Remaining months)FY 2025$3.50/MMBtu $3.50/MMBtu Maintained
Appalachian Basin SpotRemaining 6 months FY 2025$2.90/MMBtu $2.60/MMBtu Lowered
E&P Realized Price after Hedging ($/Mcf)Remaining 6 months FY 2025$2.77–$2.81 $2.72–$2.76 Lowered
Production (Bcf)FY 2025410–425 415–425 Raised (low-end)
LOE ($/Mcf)FY 2025$0.68–$0.70 $0.68–$0.69 Narrowed down
G&A ($/Mcf)FY 2025$0.18–$0.19 $0.18–$0.19 Maintained
DD&A ($/Mcf)FY 2025$0.63–$0.67 $0.63–$0.65 Lowered
Gathering Revenues ($MM)FY 2025$250–$260 $250–$260 Maintained
Pipeline & Storage Revenues ($MM)FY 2025$415–$435 $415–$435 Maintained
Utility Customer Margin ($MM)FY 2025$445–$465 $445–$465 Maintained
Utility O&M ($MM)FY 2025$240–$250 $240–$245 Lowered
Utility Non-Service Pension & OPEB ($MM)FY 2025$23–$27 $23–$27 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q2 2025)Trend
Data center / AI-driven demandEarly-stage discussions; positioned to offer pipeline capacity and long-term gas supply; attractive PA footprint (Q1) Stronger conviction on robust domestic energy demand from data centers; Appalachia attractive; increasing counterparties interest Strengthening opportunity set
Hedging StrategyAdded swaps/collars; protection with upside; targeting collars over swaps as balance sheet improves (Q1) 76 Bcf hedges added in FY’26–’27; $4 floors/$5.50 caps; “no-brainer” downside protection with upside More collars; maintained discipline
Tariffs / Supply ChainMinimal direct impact; domestic steel; proactive procurement (Q2) No revenue impact; small indirect cost increases; Canada energy tariffs would be modest risk via counterparties Neutral to modest headwind
Regulatory / Rate CasesNY multiyear settlement through FY2027; PA DISC; Supply Corp rate in effect; working on Empire settlement (Q1) FERC approved Empire amendment (rate decrease ~$0.5M/yr effective Nov 1, 2025); NY settlement tailwind continued Visible rate-base growth; low recontracting risk
E&P Productivity (Gen 3/4)Raised EUR expectations; capital efficiency improving; EDA/WDA pad outperformance (Q1) Gen 3 wells with sustained 25–30 mmcf/d for 9–12 months; exploring Gen 4 variables (proppant loading, spacing) Improving productivity; continued optimization

Management Commentary

  • “Our integrated Appalachian natural gas development program...continues to deliver strong operational results and improving capital efficiency...allowing us to increase our production guidance for fiscal 2025.” — David P. Bauer, CEO .
  • “We added 76 Bcf of swaps and collars...our collars had an average floor of $4 and an average cap of $5.50...we retain significant upside.” — Tim Silverstein, CFO .
  • “We are raising the low end of production guidance by 5 Bcf...to 415–425 Bcf and lowering the top end of LOE guidance to $0.68–$0.69 per Mcf.” — Justin Loweth, President, Seneca & Midstream .
  • “FERC approved [Empire’s] amendment...modest ~$500k rate reduction effective November 1, 2025...extend some key contracts...limits near-term recontracting risk.” — David P. Bauer, CEO .

Q&A Highlights

  • Share repurchases: Committed to completing $200M authorization by end of CY2025; price is a factor but capital allocation prioritizes organic/M&A growth, else returns via buybacks/dividends .
  • Constitution/Northern Access: Constitution impeded by NY State; broader permitting reforms needed; Northern Access not near-term but could be restarted if interest emerges .
  • EDA EUR and Gen 3/4 design: Leading-edge EUR bias to upside (~2.5 Bcf/1,000 ft), low pressure declines; testing interwell spacing and higher proppant designs for Gen 4 potential .
  • Utility O&M: Guidance lowered through cost discipline despite year-over-year increases; strategy to maintain costs to earn acceptable returns .
  • Regulated M&A focus: Preference for scaling regulated LDCs; upstream M&A limited to bolt-ons .

Estimates Context

  • Q2 FY2025 vs consensus: EPS beat ($2.39 vs $2.21*), revenue missed ($729.95M vs $774.56M*), EBITDA beat ($428.53M vs $409.99M*). Management raised FY EPS guidance and increased production guidance while lowering LOE and DD&A, implying upward revisions to EPS and EBITDA despite modest basis headwinds (*Estimates values retrieved from S&P Global).
  • FY2025 consensus EPS 6.82* vs raised company guidance midpoint ~6.90 (adjusted operating results per share), suggesting potential upward estimate revisions given productivity and cost trends (*Estimates values retrieved from S&P Global).

Key Takeaways for Investors

  • EPS strength with mixed revenue print: Focus near-term on cash generation and margin resilience; EBITDA beat supports quality of earnings even as revenue missed .
  • Guidance upgrade de-risks FY: Raised EPS range and improved cost/production outlook point to constructive estimate revisions; watch basis differentials into summer .
  • E&P productivity/capital efficiency as drivers: Gen 3 Tioga Utica well performance and lower unit costs underpin sustainable mid-single-digit growth at lower capital intensity .
  • Regulated businesses provide stability: NY multiyear settlement through FY2027 and Empire rate amendment reduce recontracting risk; Utility earnings growth remains a tailwind .
  • Capital allocation balanced: $1B refinancing reduces near-term risk; buybacks to resume cadence as macro stabilizes; path to ~2x debt-to-EBITDA by year-end .
  • Tactical trading: Near-term sentiment likely reacts to EPS beat and guidance raise; monitor summer basis spreads and data center/IPP developments in Appalachia for incremental catalysts .
  • Medium-term thesis: Integrated model (E&P, Midstream, Utility) with differentiated inventory, improving rates, and hedged upside to gas prices offers durable FCF and shareholder returns .

Other relevant Q2 press releases

  • Quarterly dividend declared at $0.515 per share payable April 15, 2025 .
  • Utility leadership transition announced (effective July 1, 2025), continuity in NY energy policy advocacy .
Notes: 
- All non-estimate financials and commentary cited to company filings and transcripts. 
- Values marked with asterisk (*) are retrieved from S&P Global.