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UGI CORP /PA/ (UGI)·Q2 2025 Earnings Summary

Executive Summary

  • UGI delivered a record fiscal Q2 with adjusted diluted EPS of $2.21, up 12% year over year, and raised FY25 adjusted EPS guidance to $3.00–$3.15 from $2.75–$3.05 following stronger-than-expected winter weather and operational improvements, notably at AmeriGas .
  • Consolidated results showed robust profitability despite commodity-driven revenue variability: GAAP EPS $2.19; net income $479M; reportable segments EBIT $692M (+7% YoY) as Utilities, Midstream & Marketing, and AmeriGas all improved .
  • Key drivers: colder than normal temperatures vs prior year drove volumetric uplift; AmeriGas margin expansion and cost control; Midstream capacity management/NGL/LNG execution; UGI International cost discipline offset currency/volume headwinds .
  • Catalysts and stock narrative: a guidance raise, deleveraging progress (corporate leverage 3.8x; $1.9B liquidity), and active steps to address AmeriGas 2026 maturities via tender/refinancing should support sentiment into the back half of FY25 and FY26 setup .

What Went Well and What Went Wrong

  • What Went Well

    • Record profitability: “highest adjusted diluted EPS for the second quarter and year‑to‑date period in the company’s history,” with all four segments contributing EBIT growth; FY25 guidance raised to $3.00–$3.15 .
    • AmeriGas execution: higher volumes and unit margin, improved gains on tank sales; Q2 EBIT +$16M YoY; early process improvements lowered attrition to “very low single digits” in Q2 and boosted YTD EBIT by $19M vs last year .
    • Balance sheet/FCF: $1.9B liquidity; leverage down to 3.8x; YTD free cash flow up 55% to ~$491M; AmeriGas cash ~$90M at 4/30 and net leverage reduced to 5.4x from 6.0x .

  • What Went Wrong

    • International LPG headwinds: retail gallons −4% YoY and weaker FX reduced total margin by ~$3M; EBIT still +$12M on cost reductions and lower opex, but FX translation and lower realized FX hedge gains weighed .
    • AmeriGas still battling structural issues: management emphasized need to further improve routing/delivery, procurement, and customer service to curb attrition and drive profitable volume into next winter .
    • Implied back‑half seasonality/timing: Q2 weather drove upside, but some capex/opex was deferred into 2H; management reiterated UGI typically earns “most or even more than 100%” of full‑year EPS in 1H given winter seasonality .

Financial Results

Consolidated results vs prior periods and consensus

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Billions)$2.467 $2.030 $2.666
GAAP Diluted EPS ($)$2.30 $1.74 $2.19
Adjusted Diluted EPS ($)$1.97 $1.37 $2.21
EBIT ($USD Millions)$729 $519 $696
Net Income ($USD Millions)$496 $375 $479
EBITDA Margin %36.60%*30.89%*31.43%*

Actual vs S&P Global consensus (Q2 2025)

MetricConsensus*Actual
Adjusted Diluted EPS ($)1.81*2.21
Revenue ($USD Billions)3.217*2.666

Values retrieved from S&P Global.

Segment performance (Q2 2025 vs Q2 2024)

SegmentRevenue Q2’24 ($M)Revenue Q2’25 ($M)EBIT Q2’24 ($M)EBIT Q2’25 ($M)
Utilities646 773 226 241
Midstream & Marketing483 587 153 154
UGI International673 650 131 143
AmeriGas Propane795 848 138 154
Corporate & Other(130) (192) 81 4
Total Reportable Segments——648 692

Selected KPIs and operating drivers (Q2 2025 vs Q2 2024)

KPIQ2 2024Q2 2025
Gas Utility core market (bcf)45 53
Gas Utility total throughput (bcf)121 128
Gas Utility HDD vs normal(16.4%) 0.3%
Midstream HDD vs normal(13.4%) 2.5%
UGI International LPG gallons (mm)221 213
UGI International HDD vs normal(13.2%) (2.2%)
AmeriGas retail gallons (mm)261 269
AmeriGas HDD vs normal(8.6%) 2.8%
Capex – Utilities ($M)91 100
Capex – Midstream ($M)33 27
Capex – UGI International ($M)19 17
Capex – AmeriGas ($M)24 16

Context and drivers:

  • Colder weather vs prior year supported core volume growth at Utilities (+18%) and AmeriGas (+3% gallons), while International volumes fell 4% on structural conservation and lost converted customers, offset by higher unit margins and lower opex .
  • Midstream total margin rose $2M on capacity management and marketing gains despite lower gathering/processing and loss of power generation contribution post-Hunlock sale .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted Diluted EPSFY2025$2.75–$3.05 (11/21/24) $3.00–$3.15 (5/7/25) Raised
Dividend per share (quarterly)Ongoing$0.375 (prior) $0.375 declared for 7/1/25 payment Maintained

Management attributed the raise to colder Q2 weather, AmeriGas operational improvements (lower attrition), and reduced impact from the jetty damage at UGI International (now ~ $0.04 headwind) .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q2 2025)Trend
AmeriGas transformation (pods, routing, service, procurement, hedging)Q1: new president; pod model; 5 pillar/process roadmap; need to enhance commercial practices and service Early wins: attrition “very low single digits” in Q2; $19M YTD EBIT uplift; focus on routing density, supplier consolidation (53 suppliers), strategic hedging, profitable volume; customer service redomestication Improving
LNG/Midstream buildout and in‑basin demandQ1: RNG projects; Pine Run JV acquisition; opportunistic midstream investments Manning LNG liquefaction capacity doubled to 20,000 dth/day; commissioning underway; active dialogues with generators/data centers on Appalachia positioning Positive
Regulatory/base rate environmentQ1: PA gas base rate case filed for ~$110M No new filings; Utilities benefited from cold weather with weather normalization dampening extremes Stable
Tariffs/macro impact on propaneLimited prior commentaryTariffs putting downward pressure on propane prices; net impact immaterial given pricing/hedging; favorable for customers Neutral
Liquidity/deleveraging/AmeriGas 2026 maturity planQ1: Intercompany loan to redeem 2025 notes; target address 2026 in FY25 $1.9B liquidity; leverage 3.8x; AmeriGas launched 2026 notes refinancing (9.5% due 2030) and tender (83% tendered) in May Progressing

Management Commentary

  • “UGI reported a 12% year-over-year increase for the fiscal second quarter, delivering the highest adjusted diluted EPS for the second quarter and year-to-date period in the company's history… we have increased our fiscal 2025 guidance range to $3.00 to $3.15.” – Bob Flexon, CEO .
  • “Our LNG infrastructure operated at peak capacity… Manning [facility] expansion… construction has now been completed… commissioning with full operational status expected by fiscal 2026.” – Bob Flexon .
  • “Adjusted diluted EPS of $2.21, $0.24 above the prior year… AmeriGas EBIT was up $16 million… [but] higher income tax expense led to a $0.06 decline in adjusted diluted EPS.” – Sean O’Brien, CFO .
  • “YTD free cash flow of approximately $490 million, up 55% year-over-year… AmeriGas’ net debt-to-EBITDA… 5.4x, down from 6x… ~$90 million in cash at April 30, 2025.” – Sean O’Brien .

Q&A Highlights

  • AmeriGas outlook: Management targeting business process upgrades (routing/density, supplier consolidation, strategic hedging, customer segmentation) to drive “profitable volume” and better customer experience by next winter; quantification to come with FY26 guidance .
  • 2026 maturities: Still aiming to address by FY25; AmeriGas bonds trading well; strong AmeriGas cash generation and leverage improvement underpin plan .
  • Appalachia demand: Active discussions with potential generators and data centers; UGI’s midstream/utility footprint is well positioned to support robust growth .
  • 2H drivers: Q2 weather pulled some capex/opex into 2H; reaffirmed seasonal earnings profile (majority in 1H) while holding meaningful 1H benefits (e.g., International Norgal ~$0.05; AmeriGas outperformance) .

Estimates Context

  • Q2 2025 beat/miss: Adjusted EPS of $2.21 beat S&P Global consensus $1.81*, while revenue of $2.666B missed $3.217B*; headline revenue variability reflects commodity pass‑through dynamics across Utilities and LPG, whereas profitability is driven by total margin and opex control .
  • Forward setup: Seasonality remains pronounced (UGI typically earns most of full‑year EPS in 1H); FY25 guidance mid-point raised to $3.075, supported by winter strength and AmeriGas process improvements .

Values retrieved from S&P Global.

Key Takeaways for Investors

  • The print was quality: broad-based EBIT strength and a double‑digit adjusted EPS beat vs S&P consensus despite revenue variability; the guidance raise signals confidence into 2H and early FY26 .
  • AmeriGas is transitioning from stabilization to improvement: early traction (lower attrition, margin gains) with clear operational levers identified ahead of the next winter season .
  • Midstream optionality is building: Manning LNG expansion, Appalachia demand interest (data centers/generation), and prior RNG progress provide multi‑year growth vectors .
  • Balance sheet momentum is tangible: $1.9B liquidity, 3.8x leverage, rising FCF, and concrete actions on 2026 maturities reduce perceived financial risk .
  • Watch 2H timing: some spend deferred into back half; UGI’s earnings seasonality means less contribution in 2H, but 1H gains (International/Norgal, AmeriGas) should carry through .
  • Dividend remains intact (141st consecutive year) with deleveraging priority unchanged; capital remains skewed to regulated utilities and core midstream where rate base and fee‑based economics drive resilience .
  • Near‑term trading setup: Guidance raise and AmeriGas refinancing milestones are positive catalysts; sustainability of AmeriGas operational gains and incremental midstream wins are key to multiple expansion .