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NJ

NEW JERSEY RESOURCES CORP (NJR)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered a mixed print: consolidated net loss of $(15.1)M (-$0.15 EPS) on total operating revenues of $298.9M, while non-GAAP net financial earnings (NFE) were positive at $6.2M ($0.06 NFEPS), a sharp improvement vs. Q3 2024 (-$8.9M, -$0.09 NFEPS) .
  • Against S&P Global consensus, EPS beat while revenue missed: EPS (Primary/NFEPS) -$0.03 est vs $0.06 actual; revenue $307.0M est vs $298.9M actual. Management raised the lower end of FY25 NFEPS to $3.20–$3.30 (from $3.15–$3.30 in Q2; $3.05–$3.20 in Q1) on stronger year-to-date performance and the residential solar sale benefit * .
  • Operational catalysts: Adelphia Gateway reached a settlement in principle in its FERC Section 4 rate case with an offer of settlement planned for Q4 FY25; Leaf River storage evaluating capacity enhancement and potential cavern expansion; SAVEGREEN® energy efficiency capex raised to $90–$95M on strong demand .
  • The narrative remains anchored in utility stability and infrastructure value; ~65% of FY25 NFEPS expected from the utility (70%+ excluding the solar gain), supporting long-term 7–9% NFEPS growth targets .

What Went Well and What Went Wrong

What Went Well

  • Utility margin uplift post rate case: NJNG NFE rose to $10.1M in Q3 (vs. -$6.1M YoY), with year-to-date NFE $221.5M (vs. $152.4M), driven by higher utility gross margin from the November 2024 base rate settlement .
  • Clear strategic execution and guidance confidence: “We are raising the lower end of our fiscal 2025 NFEPS guidance range by $0.05 to $3.20 to $3.30 per share… above our long-term 7–9% growth target” — CEO Steve Westhoven .
  • Midstream and clean energy momentum: S&T NFE improved (Q3 $5.9M vs $4.1M YoY); CEV pipeline advancing with ~449MW in service subsequent to quarter-end and ~131MW expected over the next two years, preserving optionality through structured contracts .

What Went Wrong

  • Energy Services softness in the quarter: Q3 NFE loss widened to $(3.7)M (vs. $(2.2)M) and financial margin was negative, reflecting lower AMA contributions vs. prior periods .
  • Revenue miss vs consensus and seasonality: Total operating revenues of $298.9M trailed the $307.0M consensus, with Energy Services gross margin negative in Q3 (unrealized/hedging timing effects), while CFO noted OpEx progress offsetting some variance at the utility *.
  • Lower BGSS incentive margin YoY and rising D&A: BGSS programs contributed $14.5M YTD (vs. $16.2M), and depreciation/amortization increased at NJNG and CEV, modestly pressuring reported results .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Operating Revenues ($USD Millions)$275.6 $488.4 $913.0 $298.9
Basic EPS ($USD)-$0.12 $1.32 $2.04 -$0.15
NFEPS ($USD)-$0.09 $1.29 $1.78 $0.06
Net (Loss) Income ($USD Millions)$(11.6) $131.3 $204.3 $(15.1)
NJNG Utility Gross Margin ($USD Millions)$94.1 $181.3 $294.8 $119.1

Estimates vs Actuals (Q3 2025):

MetricConsensusActualSurprise
EPS (Primary/NFEPS, $USD)*-$0.03$0.06Beat
Revenue ($USD Millions)*$307.0$298.9Miss ($8.1)

Values retrieved from S&P Global.*

Segment performance (Q3):

SegmentQ3 2024 Revenue ($MM)Q3 2025 Revenue ($MM)Q3 2025 NFE ($MM)
Natural Gas Distribution$158.1 $205.0 $10.1
Clean Energy Ventures$14.6 $12.0 $(6.9)
Energy Services$62.4 $38.9 $(3.7)
Storage & Transportation$24.5 $27.1 $5.9
Home Services & Other$16.4 $16.2 $0.5

Key KPIs:

KPIQ3 2024Q1 2025Q2 2025Q3 2025
NJNG Customers (Total)582,100 586,092 588,164 588,305
Degree Days (Actual, quarter)409 1,399 2,375 373
CEV Commercial Solar Capacity In-Service (MW)—396 (as of 12/31/24) 417 (post-Q2) 418 (as of 6/30/25); 449 subsequent

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
NFEPSFY 2025 (Q1 set)$3.05–$3.20 ——
NFEPSFY 2025 (Q2 update)$3.05–$3.20 → $3.15–$3.30 —Raised $0.10
NFEPSFY 2025 (Q3 update)$3.15–$3.30 $3.20–$3.30 Raised lower end $0.05
Segment Contribution Mix (NFE)FY 2025NJNG 65–68%, CEV 19–22%, ES 9–11%, S&T 4–6%, HS 0–1% NJNG 64–67%, CEV 20–22%, ES 10–12%, S&T 4–6%, HS 0–1% Minor mix updates

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Utility rate case & marginsNJNG base rate case settled Nov-2024; utility margin uplift noted; YTD NFE at NJNG strong Utility gross margin continued to benefit; CFO cited OpEx progress alongside rate case Improving margin trajectory; sustained
Energy efficiency (SAVEGREEN®)New $385.6M program approved, near real-time returns; initiated investments FY25 SAVEGREEN capex raised >30% to $90–$95M on demand Accelerating investment
Midstream (Adelphia Gateway, Leaf River)Adelphia Section 4 case progressing; Leaf River recovery project; open season completed Adelphia reached settlement in principle; filing offer of settlement planned Q4; Leaf River evaluating expansion and conducting binding open season Positive regulatory progress; optionality increasing
Tariffs/macro & supply chainCompany noted insulation at NJNG (domestic sourcing) and structured protections at CEV Management reiterated flexibility and limited near-term tariff impact on CEV pipeline Watchful but manageable
CEV pipeline & returnsDiversified, structured pipeline >1GW; deliberate phasing and hedging ~418MW in service at Q3; ~449MW subsequent; ~131MW next two years with ~$350M investment; structured to preserve returns Executing with discipline

Management Commentary

  • “We are raising the lower end of our fiscal 2025 NFEPS guidance range by $0.05 to $3.20 to $3.30 per share… above our long-term 7–9% growth target” — Steve Westhoven, CEO .
  • “Drivers include higher utility margins at New Jersey Natural Gas post rate case, a net benefit of approximately $0.30 per share for the sale of our residential solar portfolio during our fiscal first quarter, improved performance in our Storage and Transportation business and strong results from Energy Services during the winter period” — Roberto Bel, CFO .
  • “We have reached a settlement in principle at the Adelphia Gateway rate case and expect resolution by the end of the year… At Leaf River, we continue to evaluate expansion opportunities” — CEO .

Q&A Highlights

  • Adelphia rate case timeline and disclosure: Management confirmed settlement in principle and indicated public disclosure upon completion; tariffs and updates will follow required filings .
  • Leaf River expansion economics/timing: Open season interest encouraging; decision and CapEx clarity expected in coming months; subsequent binding open season underway; management targeted midstream-appropriate returns .
  • Utility gross margin drivers: CFO highlighted combination of new rate case benefits and OpEx progress contributing to stronger-than-expected utility margins .
  • SAVEGREEN demand: Strong residential/commercial uptake (including direct install) driving raised capex; real-time recovery mechanism supports affordability and returns .
  • Dividend framework: Board tends to align dividend growth with long-term earnings trajectory; history of consistent increases expected to continue .

Estimates Context

  • Q3 2025 EPS beat: EPS (Primary/NFEPS) -$0.03 consensus vs $0.06 actual; Q3 2025 revenue missed: $307.0M consensus vs $298.9M actual. The EPS beat reflects NJNG margin uplift and YTD portfolio strength, while revenue shortfall aligns with Energy Services’ negative Q3 financial margin and hedging timing effects *.
  • FY25 guidance raised: Management raised the lower end of NFEPS to $3.20–$3.30, implying upward pressure on FY consensus, especially given the ~$0.30/share benefit from the solar portfolio sale and winter Energy Services performance .
  • Estimate revisions: Expect upward adjustments to FY25 EPS/NFEPS trajectories and midstream contribution assumptions; near-term quarterly ES revenue/margin expectations may remain conservative given AMA normalization .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Utility-led compounding: NJNG continues to underpin results with visible margin growth post rate case and accelerating energy efficiency investments that earn near real-time returns .
  • Infrastructure optionality: Adelphia settlement in principle and Leaf River capacity projects create potential multi-year growth vectors; monitor FERC filings and binding open season outcomes for timing/capex .
  • Adjusted vs GAAP dynamics: NFE/NFEPS filters hedging/timing volatility; quarter’s EPS beat vs consensus highlights importance of tracking company-defined measures alongside GAAP .
  • ES cyclicality: Quarterly ES margin can be volatile; focus on winter performance and AMA baseline; Q3 softness aligns with fewer AMA contributions vs prior periods .
  • Capital plan funded without block equity: Liquidity and staggered maturities support $1.3–$1.6B two-year capex; watch adjusted FFO/debt at 19–21% to gauge balance-sheet capacity .
  • Near-term trading: Positive guidance raise and Adelphia settlement progress are likely stock catalysts; revenue miss and ES margin volatility could temper near-term momentum; watch Q4 webcast and settlement filing .
  • Medium-term thesis: 7–9% NFEPS growth supported by regulated utility returns, targeted clean energy deployment with hedged revenue, and midstream assets in constrained markets .

References:

  • Q3 2025 8-K earnings press release and exhibits .
  • Q3 2025 earnings call transcript .
  • Q3 2025 press releases (results; webcast scheduling) .
  • Q2 2025 press release and call .
  • Q1 2025 press release .