New Jersey Resources Reports Fiscal 2025 Second-Quarter Results

Business Wire

05-05-2025

WALL, N.J.--(BUSINESS WIRE)--New Jersey Resources Corporation (NYSE: NJR) today reported financial and operating results for its fiscal 2025 second quarter ended March 31, 2025.
Highlights include:
Fiscal 2025 second-quarter consolidated net income of $204.3 million, or $2.04 per share, compared with net income of $120.8 million, or $1.23 per share, in the second quarter of fiscal 2024
Consolidated net financial earnings (NFE), a non-GAAP financial measure, of $178.3 million, or $1.78 per share, in the second-quarter of fiscal 2025, compared to NFE of $138.6 million, or $1.41 per share, in the second quarter of fiscal 2024
Fiscal 2025 year-to-date net income totaled $335.6 million, or $3.35 per share, compared with $210.2 million, or $2.14 per share, for the same period in fiscal 2024
Fiscal 2025 year-to-date NFE totaled $307.2 million, or $3.07 per share, compared with $211.0 million, or $2.15 per share, for the same period in fiscal 2024
Fiscal 2025 Outlook
Increases fiscal 2025 net financial earnings per share (NFEPS) guidance to a range of $3.15 to $3.30, from $3.05 to $3.20, a $0.10 increase, as a result of outperformance from Energy Services during the winter period
Maintains 7 to 9 percent long-term NFEPS growth target, based off of a target of $2.83 per share for fiscal 2025
Management Commentary
Steve Westhoven, President and CEO of New Jersey Resources, stated, "We continued to execute our strategy to deliver stable growth through our diversified business model. Our second-quarter performance exceeded expectations, largely driven by natural gas price volatility that benefited Energy Services during the winter period. Overall, we believe these results highlight the strength of our complementary portfolio and the value of our physical infrastructure.'
Performance Metrics
Net financial earnings (loss) by business segment
Three Months Ended
Six Months Ended
March 31,
March 31,
(Thousands)
2025
2024
2025
2024
New Jersey Natural Gas
$
144,531
$
107,095
$
211,439
$
158,539
Clean Energy Ventures
(3,958
)
(5,616
)
44,172
4,906
Storage and Transportation
2,343
1,981
8,007
5,621
Energy Services
35,301
37,644
43,134
45,475
Home Services and Other
(678
)
384
(63
)
(216
)
Subtotal
177,539
141,488
306,689
214,325
Eliminations
757
(2,912
)
501
(3,305
)
Total
$
178,296
$
138,576
$
307,190
$
211,020
Expand
Fiscal 2025 NFEPS Guidance:
NJR is raising its fiscal 2025 NFEPS guidance range by $0.10 to a range of $3.15 to $3.30, subject to the risks and uncertainties identified below under "Forward-Looking Statements." Fiscal 2025 NFEPS guidance is higher than the range implied by our 7 to 9 percent long-term NFEPS growth target as a result of the gain from the sale of NJR's residential solar portfolio and strong performance from Energy Services.
The following chart represents NJR's current expected NFE contributions from its business segments for fiscal 2025 (which takes into account the impact of the gain from the sale of NJR's residential solar portfolio in the first quarter of fiscal 2025):
In providing fiscal 2025 NFE guidance, management is aware there could be differences between reported GAAP net income and NFE due to matters such as, but not limited to, the positions of our energy-related derivatives. Management is not able to reasonably estimate the aggregate impact or significance of these items on reported earnings and, therefore, is not able to provide a reconciliation to the corresponding GAAP equivalent for its operating earnings guidance without unreasonable efforts.
New Jersey Natural Gas (NJNG)
NJNG reported second-quarter fiscal 2025 NFE of $144.5 million, compared to NFE of $107.1 million during the same period in fiscal 2024. Fiscal 2025 year-to-date NFE totaled $211.4 million, compared with NFE of $158.5 million for the same period in fiscal 2024. The increase in NFE for both periods was due primarily to higher utility gross margin resulting from NJNG's recent base rate case settlement, partially offset by higher depreciation expense.
Customers:
At March 31, 2025, NJNG serviced approximately 588,000 customers in New Jersey's Monmouth, Ocean, Morris, Middlesex, Sussex and Burlington counties, compared to approximately 583,000 customers at September 30, 2024.
Infrastructure Update:
NJNG's Infrastructure Investment Program (IIP) is a five-year, $150 million accelerated recovery program that began in fiscal 2021. IIP consists of a series of infrastructure projects designed to enhance the safety and reliability of NJNG's natural gas distribution system. In the first six months of fiscal 2025, NJNG spent $16.1 million under the program on various distribution system reinforcement projects.
Basic Gas Supply Service (BGSS) Incentive Programs:
BGSS incentive programs contributed $10.6 million to utility gross margin during the first six months of fiscal 2025, compared with $13.3 million in the same period in fiscal 2024. This decline was largely due to decreased margins from storage incentives.
For more information on utility gross margin, please see "Non-GAAP Financial Information" below.
Energy-Efficiency Programs:
SAVEGREEN® invested $52.2 million year-to-date in fiscal 2025 in energy-efficiency upgrades for customers' homes and businesses. NJNG recovered $9.2 million of its outstanding investments during the first six months of fiscal 2025 through its energy efficiency rate.
Clean Energy Ventures (CEV)
CEV reported second-quarter fiscal 2025 net financial loss of $(4.0) million, compared with a net financial loss of $(5.6) million during the same period in fiscal 2024. The improvement from the prior year period was largely due to higher solar electricity sales as well as lower depreciation and amortization expenses during the period, offset by lower residential solar revenue during the period as a result of the sale of the residential solar business.
Fiscal 2025 year-to-date NFE totaled $44.2 million, compared with NFE of $4.9 million for the same period in fiscal 2024. The increase in fiscal 2025 year-to-date NFE was largely due to the gain on sale of its residential solar portfolio, partially offset by the timing of Solar Renewable Energy Certificate (SREC) sales for the period.
Solar Investment Update:
During the first six months of fiscal 2025, CEV placed 2 commercial projects into service, adding 10.5 megawatts (MW) to total installed capacity.
As of March 31, 2025, CEV had approximately 399MW of commercial solar capacity in service in New Jersey, New York, Connecticut, Rhode Island, Indiana, and Michigan.
Subsequent to quarter end, CEV placed an additional project into service in New Jersey, adding over 18MW of installed capacity for a total of approximately 417MW currently in service.
Storage and Transportation
Storage and Transportation reported second-quarter fiscal 2025 NFE of $2.3 million, compared with NFE of $2.0 million during the same period in fiscal 2024. Fiscal 2025 year-to-date NFE totaled $8.0 million, compared with NFE of $5.6 million for the same period in fiscal 2024. NFE increased during both periods due to an increase in operating revenues at Leaf River, as well as lower operating and maintenance expense.
On September 30, 2024, Adelphia Gateway, LLC (Adelphia) filed a general Section 4 rate case with the Federal Energy Regulatory Commission (FERC). Adelphia anticipates a resolution by the end of 2025.
Energy Services
Energy Services reported second-quarter fiscal 2025 NFE of $35.3 million, compared with $37.6 million for the same period in fiscal 2024. Fiscal 2025 year-to-date NFE totaled $43.1 million, compared with NFE of $45.5 million for the same period in fiscal 2024. Energy Services was able to take advantage of price volatility and capture additional financial margin over the past two winters. The decrease in NFE for both the fiscal 2025 second quarter and year-to-date periods was due to lower revenues from the Asset Management Agreements (AMAs) signed in December 2020.
Home Services and Other Operations
Home Services and Other Operations reported second-quarter fiscal 2025 net financial loss of $(0.7) million, compared to NFE of $0.4 million for the same period in fiscal 2024. Fiscal 2025 year-to-date net financial loss totaled $(0.1) million, compared with a net financial loss of $(0.2) million for the same period in fiscal 2024. Home Services reported higher installation and service contract revenue for both periods, offset by higher operating and maintenance expenses.
Capital Expenditures and Cash Flows:
NJR is committed to maintaining a strong financial profile:
During the first six months of fiscal 2025, capital expenditures were $287.1 million, including accruals, compared with $232.6 million during the same period of fiscal 2024. The increase in capital expenditures was primarily due to higher expenditures at NJNG and CEV.
During the first six months of fiscal 2025, cash flows from operations were $414.1 million, compared to cash flows from operations of $338.6 million during the same period of fiscal 2024. The increase was due primarily to an increase in base rates at NJNG along with changes in the mix of working capital components.
Forward-Looking Statements:
This earnings release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. NJR cautions readers that the assumptions forming the basis for forward-looking statements include many factors that are beyond NJR's ability to control or estimate precisely, such as estimates of future market conditions and the behavior of other market participants. Words such as 'anticipates,' 'estimates,' 'expects,' 'projects,' 'may,' 'will,' 'intends,' 'plans,' 'believes,' 'should' and similar expressions may identify forward-looking statements and such forward-looking statements are made based upon management's current expectations, assumptions and beliefs as of this date concerning future developments and their potential effect upon NJR. There can be no assurance that future developments will be in accordance with management's expectations, assumptions and beliefs or that the effect of future developments on NJR will be those anticipated by management. Forward-looking statements in this earnings release include, but are not limited to, statements regarding NJR's NFEPS guidance for fiscal 2025, projected NFEPS growth rates and our guidance range, forecasted contributions of business segments to NJR's NFE for fiscal 2025, impact of the sale of NJR's residential solar portfolio, infrastructure programs and investments, future decarbonization opportunities including IIP, Energy Efficiency programs, the outcome or timing of Adelphia's rate case with FERC; and other legal and regulatory expectations, and statements that include other projections, predictions, expectations or beliefs about future events or results or otherwise are not statements of historical fact.
Additional information and factors that could cause actual results to differ materially from NJR's expectations are contained in NJR's filings with the SEC, including NJR's Annual Reports on Form 10-K and subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and other SEC filings, which are available at the SEC's website, http://www.sec.gov. Information included in this earnings release is representative as of today only and while NJR periodically reassesses material trends and uncertainties affecting NJR's results of operations and financial condition in connection with its preparation of management's discussion and analysis of results of operations and financial condition contained in its Quarterly and Annual Reports filed with the SEC, NJR does not, by including this statement, assume any obligation to review or revise any particular forward-looking statement referenced herein in light of new information, future events or otherwise, except as required by law.
Non-GAAP Financial Information:
This earnings release includes the non-GAAP financial measures NFE/net financial loss, NFE per basic share, financial margin and utility gross margin. A reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP can be found below. As an indicator of NJR's operating performance, these measures should not be considered an alternative to, or more meaningful than, net income or operating revenues as determined in accordance with GAAP. This information has been provided pursuant to the requirements of SEC Regulation G.
NFE and financial margin exclude unrealized gains or losses on derivative instruments related to NJR's unregulated subsidiaries and certain realized gains and losses on derivative instruments related to natural gas that has been placed into storage at Energy Services, net of applicable tax adjustments as described below. Financial margin also differs from gross margin as defined on a GAAP basis as it excludes certain operations and maintenance expense and depreciation and amortization as well as the effects of derivatives as discussed above. Volatility associated with the change in value of these financial instruments and physical commodity reported on the income statement in the current period. In order to manage its business, NJR views its results without the impacts of the unrealized gains and losses, and certain realized gains and losses, caused by changes in value of these financial instruments and physical commodity contracts prior to the completion of the planned transaction because it shows changes in value currently instead of when the planned transaction ultimately is settled. An annual estimated effective tax rate is calculated for NFE purposes and any necessary quarterly tax adjustment is applied to NJR Energy Services Company.
NJNG's utility gross margin is defined as operating revenues less natural gas purchases, sales tax, and regulatory rider expense. This measure differs from gross margin as presented on a GAAP basis as it excludes certain operations and maintenance expense and depreciation and amortization. Utility gross margin may also not be comparable to the definition of gross margin used by others in the natural gas distribution business and other industries. Management believes that utility gross margin provides a meaningful basis for evaluating utility operations since natural gas costs, sales tax and regulatory rider expenses are included in operating revenues and passed through to customers and, therefore, have no effect on utility gross margin.
Management uses these non-GAAP financial measures as supplemental measures to other GAAP results to provide a more complete understanding of NJR's performance. Management believes these non-GAAP financial measures are more reflective of NJR's business model, provide transparency to investors and enable period-to-period comparability of financial performance. A reconciliation of all non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP can be found below. For a full discussion of NJR's non-GAAP financial measures, please see NJR's most recent Report on Form 10-K, Item 7.
About New Jersey Resources
New Jersey Resources (NYSE: NJR) is a Fortune 1000 company that, through its subsidiaries, provides safe and reliable natural gas and clean energy services, including transportation, distribution, asset management and home services. NJR is composed of five primary businesses:
New Jersey Natural Gas, NJR's principal subsidiary, operates and maintains natural gas transportation and distribution infrastructure to serve customers in New Jersey's Monmouth, Ocean, Morris, Middlesex, Sussex and Burlington counties.
Clean Energy Ventures invests in, owns and operates solar projects, providing customers with low-carbon solutions.
Energy Services manages a diversified portfolio of natural gas transportation and storage assets and provides physical natural gas services and customized energy solutions to its customers across North America.
Storage and Transportation serves customers from local distributors and producers to electric generators and wholesale marketers through its ownership of Leaf River and the Adelphia Gateway Pipeline, as well as our 50% equity ownership in the Steckman Ridge natural gas storage facility.
Home Services provides service contracts as well as heating, central air conditioning, water heaters, standby generators, solar and other indoor and outdoor comfort products to residential homes throughout New Jersey.
NJR and its over 1,300 employees are committed to helping customers save energy and money by promoting conservation and encouraging efficiency through Conserve to Preserve® and initiatives such as SAVEGREEN®.
For more information about NJR:
www.njresources.com.
NFE is a measure of earnings based on the elimination of timing differences to effectively match the earnings effects of the economic hedges with the physical sale of natural gas, SRECs and foreign currency contracts. Consequently, to reconcile net income and NFE, current-period unrealized gains and losses on the derivatives are excluded from NFE as a reconciling item. Realized derivative gains and losses are also included in current-period net income. However, NFE includes only realized gains and losses related to natural gas sold out of inventory, effectively matching the full earnings effects of the derivatives with realized margins on physical natural gas flows. NFE also excludes certain transactions associated with equity method investments, including impairment charges, which are non-cash charges, and return of capital in excess of the carrying value of our investment. These are not indicative of the Company's performance for its ongoing operations. Included in the tax effects are current and deferred income tax expense corresponding with the components of NFE.
FINANCIAL STATISTICS BY BUSINESS UNIT
(Unaudited)
Operating Revenues
Natural Gas Distribution
$
618,645
$
463,201
$
952,410
$
756,631
Clean Energy Ventures
7,967
9,325
34,373
44,620
Energy Services
246,390
144,862
332,698
244,530
Storage and Transportation
25,307
23,042
51,935
46,904
Home Services and Other
15,118
14,905
30,912
29,739
Sub-total
913,427
655,335
1,402,328
1,122,424
Eliminations
(400
)
2,578
(940
)
2,699
Total
$
913,027
$
657,913
$
1,401,388
$
1,125,123
Operating Income (Loss)
Natural Gas Distribution
$
197,876
$
140,279
$
294,982
$
214,454
Clean Energy Ventures
(7,553
)
(7,679
)
56,721
10,644
Energy Services
83,273
25,533
99,801
59,870
Storage and Transportation
5,800
5,910
15,569
13,234
Home Services and Other
(393
)
778
602
570
Sub-total
279,003
164,821
467,675
298,772
Eliminations
946
5,401
1,851
7,269
Total
$
279,949
$
170,222
$
469,526
$
306,041
Equity in Earnings of Affiliates
Storage and Transportation
$
1,161
$
85
$
2,122
$
1,078
Eliminations
291
653
730
1,320
Total
$
1,452
$
738
$
2,852
$
2,398
Net Income (Loss)
Natural Gas Distribution
$
144,531
$
107,095
$
211,439
$
158,539
Clean Energy Ventures
(3,958
)
(5,616
)
44,172
4,906
Energy Services
61,292
17,028
71,550
40,961
Storage and Transportation
2,343
1,981
8,007
5,621
Home Services and Other
(678
)
384
(63
)
(216
)
Sub-total
203,530
120,872
335,105
209,811
Eliminations
757
(60
)
501
412
Total
$
204,287
$
120,812
$
335,606
$
210,223
Net Financial Earnings (Loss)
Natural Gas Distribution
$
144,531
$
107,095
$
211,439
$
158,539
Clean Energy Ventures
(3,958
)
(5,616
)
44,172
4,906
Energy Services
35,301
37,644
43,134
45,475
Storage and Transportation
2,343
1,981
8,007
5,621
Home Services and Other
(678
)
384
(63
)
(216
)
Sub-total
177,539
141,488
306,689
214,325
Eliminations
757
(2,912
)
501
(3,305
)
Total
$
178,296
$
138,576
$
307,190
$
211,020
Throughput (Bcf)
NJNG, Core Customers
35.7
32.9
62.9
56.3
NJNG, Off System/Capacity Management
22.1
37.1
36.5
64.3
Energy Services Fuel Mgmt. and Wholesale Sales
35.2
38.3
63.5
68.4
Total
93.0
108.3
162.9
189.0
Common Stock Data
Yield at March 31,
3.7
%
3.9
%
3.7
%
3.9
%
Market Price at March 31,
$
49.06
$
42.91
$
49.06
$
42.91
Shares Out. at March 31,
100,303
98,745
100,303
98,745
Market Cap. at March 31,
$
4,920,847
$
4,237,144
$
4,920,847
$
4,237,144
Expand
Three Months Ended
Six Months Ended
(Unaudited)
March 31,
March 31,
(Thousands, except customer and weather data)
2025
2024
2025
2024
NATURAL GAS DISTRIBUTION
Utility Gross Margin
Operating revenues
$
618,645
$
463,201
$
952,410
$
756,631
Less:
Natural gas purchases
275,298
206,675
405,303
325,119
Operating and maintenance (1)
29,510
29,558
55,519
55,341
Regulatory rider expense
48,501
29,229
70,977
48,418
Depreciation and amortization
35,713
27,464
67,797
54,381
Gross margin
229,623
170,275
352,814
273,372
Add:
Operating and maintenance (1)
29,510
29,558
55,519
55,341
Depreciation and amortization
35,713
27,464
67,797
54,381
Total Utility Gross Margin
$
294,846
$
227,297
$
476,130
$
383,094
(1) Excludes selling, general and administrative expenses of $57.8 million and $58.9 million for the six months ended March 31, 2025 and 2024, respectively.
Utility Gross Margin, Operating Income and Net Income
Residential
$
215,668
$
163,495
$
345,686
$
271,532
Commercial, Industrial & Other
37,108
28,676
60,977
49,507
Firm Transportation
33,908
26,490
57,084
47,254
Total Firm Margin
286,684
218,661
463,747
368,293
Interruptible
800
750
1,774
1,534
Total System Margin
287,484
219,411
465,521
369,827
Basic Gas Supply Service Incentive
7,362
7,886
10,609
13,267
Total Utility Gross Margin
294,846
227,297
476,130
383,094
Operation and maintenance expense
61,257
59,554
113,351
114,259
Depreciation and amortization
35,713
27,464
67,797
54,381
Operating Income
$
197,876
$
140,279
$
294,982
$
214,454
Net Income
$
144,531
$
107,095
$
211,439
$
158,539
Net Financial Earnings
$
144,531
$
107,095
$
211,439
$
158,539
Throughput (Bcf)
Residential
24.0
21.0
38.1
34.9
Commercial, Industrial & Other
4.5
3.9
7.1
6.5
Firm Transportation
5.0
4.7
8.4
8.3
Total Firm Throughput
33.5
29.6
53.6
49.7
Interruptible
2.2
3.3
9.3
6.6
Total System Throughput
35.7
32.9
62.9
56.3
Off System/Capacity Management
22.1
37.1
36.5
64.3
Total Throughput
57.8
70.0
99.4
120.6
Customers
Residential
532,699
525,391
532,699
525,391
Commercial, Industrial & Other
33,291
33,108
33,291
33,108
Firm Transportation
22,060
22,992
22,060
22,992
Total Firm Customers
588,050
581,491
588,050
581,491
Interruptible
88
83
88
83
Total System Customers
588,138
581,574
588,138
581,574
Off System/Capacity Management*
26
26
26
26
Total Customers
588,164
581,600
588,164
581,600
*The number of customers represents those active during the last month of the period.
Degree Days
Actual
2,375
2,135
3,774
3,543
Normal
2,384
2,436
3,907
3,970
Percent of Normal
99.6
%
87.6
%
96.6
%
89.2
%
Expand