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New Jersey Resources Reports Fiscal 2025 Second-Quarter Results

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, 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: 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