NJR — New Jersey Resources Corporation

NJR Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Net Financial Earnings (NFE): $118.2 million, or $1.17 per share for Q1 2026.
• NFEPS Guidance: Raised to $3.28 to $3.43 per share, an increase of $0.25 from previous guidance.
• Capital Expenditures (CapEx): Approximately $119 million deployed in Q1; reaffirmed five-year CapEx outlook of $4.8 to $5.2 billion through fiscal 2030.

2. Strategic Updates and Business Highlights

• New Jersey Natural Gas (NJNG): Achieved record sendouts during extreme cold weather, highlighting the utility's critical role. The utility is hedged over 87% for the winter, with an average hedge price of $2.20 per decatherm.
• Storage and Transportation (S&T): Expected to double NFE over the next two years, driven by strong recontracting at Adelphia and Leaf River. A FERC application has been filed to increase Leaf River's capacity by over 70%.
• Clean Energy Ventures (CEV): Added approximately 10 megawatts of capacity in Q1, with plans to grow in-service capacity by over 50% in the next two years. The segment benefits from proactive safe harboring initiatives to secure tax incentives.

3. Forward Guidance and Outlook

• Fiscal 2026 NFEPS Guidance: Now projected at $3.28 to $3.43 per share, reflecting strong performance in energy services and favorable market conditions.
• Long-Term Growth: NJR maintains a long-term NFEPS growth target of 7% to 9%, with the utility expected to contribute approximately 70% of NFEPS.

4. Bad News, Challenges, or Points of Concern

• Lower Contribution from CEV: The segment's contribution was lower compared to the prior year due to a gain from the sale of solar assets in the previous period.
• Regulatory Environment: The new administration in New Jersey is focused on affordability, which could impact future rate case filings and regulatory strategies. NJR needs to navigate these changes carefully.
• Market Volatility: While recent weather events have created opportunities, ongoing volatility in natural gas prices and demand could pose risks to earnings stability.

5. Notable Q&A Insights

• Energy Services Performance: The strong performance in energy services is expected to continue, with potential upside if winter weather remains severe.
• S&T Capacity Expansion: Current contracts cover initial capacity expansions, but the fourth cavern expansion lacks contracts. Market interest is constructive, and NJR is actively pursuing further growth opportunities.
• Regulatory Strategy: NJR is committed to working with the new administration on affordability issues and is open to exploring rate-based solar or other energy generation options if they align with risk profiles and cost reduction goals.
• Hedging Strategy: NJR's hedging strategy has been effective, providing significant cost savings for customers, which regulators are aware of and support.

Overall, NJR's Q1 2026 results reflect strong operational performance and strategic positioning, with a positive outlook despite some regulatory and market challenges.