New Jersey Resources’ 2026 Q3 Call: Guidance Timelines, Capital Intensity, Capacity Additions Don’t Match

Date of Call: Aug 4, 2026

Financials Results

• EPS: $0.11 per share, an increase over $0.06 per share reported in the third quarter of fiscal 2025

Guidance:

• Tightening fiscal 2026 NFVPS guidance range to $3.52 to $3.62 per share, raising the midpoint.
• Capital expenditure expectations increased to $815 million to $950 million for fiscal 2026.
• Reaffirming five-year CapEx outlook of $4.8 to $5.2 billion through fiscal 2030.
• Expect adjusted debt ratio to exceed 20% in fiscal 2026.

Business Commentary:

Solid Financial Performance:

• New Jersey Resources reported consolidated net financial earnings of $11.3 million, or $0.11 per share, for the third quarter of fiscal 2026, an increase from $6.2 million, or $0.06 per share, in the same quarter of fiscal 2025.
• The growth was driven by improved contributions across several businesses, particularly higher earnings at Clean Energy Ventures and continued uplift at Storage and Transportation from favorable re-contracting activity.

Regulatory Milestones and Affordability Focus:

• The company received the first certificate for the Leaf River expansion at S&T ahead of schedule.
• These regulatory milestones reflect New Jersey Resources' efforts to balance affordability for customers with investments in system reliability, as seen through their filings with the BPU to provide bill relief while supporting long-term investments.

Capital Investment and Growth Expectations:

• The company increased its fiscal 2026 capital investment expectations to a range of $815 million to $950 million, up from the prior outlook of $775 million to $930 million.
• This increase is primarily driven by additional investment at the utility to focus on safety and reliability initiatives, with confidence in achieving the lower end of the investment range for Clean Energy Ventures.

Tightened Fiscal Guidance:

• New Jersey Resources tightened its fiscal 2026 NFVPS guidance range to $3.52 to $3.62 per share, narrowing the range while increasing the midpoint.
• This update reflects greater visibility into full-year results and the ongoing benefit of their diversified model, with expectations to revisit and normalize segment expectations in November.

Sentiment Analysis:

Overall Tone: Positive

• "NJR delivered a solid performance for this quarter, driven by disciplined execution." "Overall, NJR is executing well and remains on track to achieve our long-term growth objectives." "This consistent execution reflects the strength and durability of our business model and gives us confidence in the path ahead."

Q&A:

• Question from Eli Josen (JP Morgan): Just wanted to start on the rate case in New Jersey... How should we think about that filing in the context of the broader climate...?
  Response: Filing combines rate case with other elements to protect consumer costs; the process is expected to be normal, and natural gas remains the cheapest heating option.

• Question from Eli Josen (JP Morgan): Can you just remind us how you think about rebasing and... when you might think about updating that rebasing?
  Response: Guidance for fiscal 2027 will be provided in November, based on the 7-9% growth target from the starting point of $2.73 for 2025.

• Question from Konstantin Lednev (Wells Fargo): Any feedback that you have been receiving from kind of the bill mitigation proposals? And do you see any structural differences with this cycle versus prior cycles?
  Response: The rate case is normal and plain vanilla, with no differences from prior cycles; the process has just started.

• Question from Konstantin Lednev (Wells Fargo): ...do you see kind of any core sticking points? ...does that kind of create some considerations for the BPU in the near term?
  Response: Executive orders have focused on electric companies; NJNG is watching for opportunities to make the process smoother but is not closely involved currently.

• Question from Konstantin Lednev (Wells Fargo): ...on the kind of incremental smt capacity kind of moving up and even kind of going beyond the 55 bcf... any color on kind of the re-contracting contracting the incremental capacity any any kind of pricing data points that you're seeing?
  Response: Expansion is expected to continue with similar capital intensity; recontracting rates and increases reflect strong demand and valuable services.

• Question from Mizuho (Gabe): How do you expect, you know, the ongoing debate around capacity markets, resource adequacy, and interconnection reform to impact CEV's project pipeline and long-term returns?
  Response: Opportunities exist to use existing interconnects to add capacity; investments would be additive to the current plan and are being structured for the right returns and risk.

Contradiction Point 1

Outlook for Future Guidance and Capital Project Financing

Timing and certainty of future financial guidance and project funding requirements differ significantly.

Eli Josen (JP Morgan) - Eli Josen (JP Morgan)

2026Q3: The guidance is based on the 7% to 9% long-term growth target from a starting point of $2.73 for FY25. This method of calculating expected future earnings remains unchanged. - Roberto Bell(CFO)

How should rebasing and implied FY27 numbers be considered given strong performance? - Travis Miller (Morningstar Inc.)

2026Q2: The initial guidance raise in February was based on the strong performance during the winter up to that point... The business continues to perform well, lowering the company's overall debt and equity needs with its cash flow. - Stephen D. Westhoven(CEO)

Contradiction Point 2

S&T Expansion Capital Intensity

Contradiction on whether capital intensity for S&T expansion remains consistent.

What questions did Konstantin Lednev (Wells Fargo) raise during the earnings call? - Konstantin Lednev (Wells Fargo)

2026Q3: Strong demand exists for S&T services, and expansions are expected to continue with similar capital intensity. - Steve Westhoven(CEO)

Regarding the incremental S&T capacity beyond 55 Bcf, will capital intensity remain the same, and what re-contracting trends or pricing data points are you observing? - Jamieson Ward (Jefferies LLC)

2026Q1: The timing is favorable, with the ability to execute brownfield expansion (existing caverns/compression) more cheaply and quickly than greenfield. - Steve Westhoven(CEO)

Contradiction Point 3

CEV's Capacity Addition Outlook

Contradiction on whether CEV's capacity addition opportunities are additive to the current plan or part of the existing strategy.

Mizuho (Questioner: Gabe Grabs) - Mizuho (Questioner: Gabe Grabs)

2026Q3: The company sees an opportunity to use its existing interconnect and infrastructure to add valuable capacity to the grid at a lower cost. This would be additive to the current capital plan - Steve Westhoven(CEO)

How will regulatory debates on capacity markets, resource adequacy, and interconnection reform impact CEV's project pipeline and long-term returns? - Christopher Ellinghaus (Siebert Williams Shank & Co., L.L.C.)

2026Q1: The upside involves utilizing existing grid interconnections... These opportunities are outside the current capital plan - Steve Westhoven(CEO)

Contradiction Point 4

Rate Case Process and Regulatory Strategy

Contradiction on whether the rate case process is normal or involves strategic bundling.

Eli Josen (JP Morgan) - Eli Josen (JP Morgan)

2026Q3: The filing in June combined the rate case with other filings to protect consumer costs... The process is expected to be a normal, \"plain vanilla\" rate case with no structural differences. - Steve Westhoven(CEO)

How will the rate case filing address affordability and EO1 legislation impacts? - Jamieson Ward (Jefferies LLC)

2025Q4: The company looks forward to working with the new administration to maintain affordability. - Steve Westhoven(CEO)

Contradiction Point 5

Timeline for Providing Financial Guidance

Inconsistency regarding when formal guidance for future earnings will be issued.

What is Eli Josen's role in the earnings call? - Eli Josen (JP Morgan)

2026Q3: The company will provide FY27 guidance in November. - Roberto Bell(CFO)

How should strong performance influence rebasing and FY27 projections? - Jamieson Ward (Jefferies LLC)

2025Q4: The published capital plan is the most accurate guide for deployment, though acceleration is possible with policy changes. - Steve Westhoven(CEO)