New Jersey Resources' Q3 2025 Earnings Call: Unraveling Key Contradictions on Expansion, CapEx, and Dividends

Leaf River expansion decision timeline, capital expenditure guidance and expansion plans, Adelphia rate case settlement, dividend strategy and allocation, and natural gas infrastructure CapEx allocation are the key contradictions discussed in New Jersey Resources Corporation's latest 2025Q3 earnings call.



Financial Performance and Guidance:
- New Jersey Resources reported an increase in year-to-date net financial earnings (NFE) of nearly 55% year-over-year, reaching $3.13 per share.
- The growth was driven by higher utility margins at New Jersey Natural Gas, a net benefit from the sale of the residential solar portfolio, improved performance in the Storage & Transportation business, and storm results from Energy Services.

Capital Investment and Strategic Growth:
- The company raised the lower end of its fiscal 2025 NFEPS guidance range by $0.05 to $3.20 to $3.30 per share, reflecting strong operating performance across its businesses.
- This reflects a strategic emphasis on utility investments, advancements in renewable projects, regulatory progress, and expansion opportunities in the S&T segment.

New Jersey Natural Gas and SAVEGREEN Program:
- NJR's utility service now serves approximately 588,000 customers, up due to consistent customer growth and new commercial development in core counties.
- The SAVEGREEN program experienced a 30% increase in expected capital projections for 2025, reaching $90 to $95 million, driven by increased adoption of efficient HVAC systems and a positive regulatory environment for real-time cost recovery.

Clean Energy Ventures (CEV) and Market Dynamics:
- Year-to-date, CEV placed approximately 63 megawatts into service, with an additional 131 megawatts of solar projects scheduled for service in the next 2 years, representing $350 million in investment.
- Despite market uncertainties, CEV maintains a diversified and flexible development model, aimed at aligning with strategic investment criteria and leveraging market dynamics and long-term capital plans.

Storage & Transportation Segment and Expansion Opportunities:
- The company reached a settlement in principle at the Adelphia Gateway rate case and expects resolution by year-end, with potential positive impacts on future earnings.
- NJR is evaluating multiple expansion opportunities at Leaf River, with new cavern projects potentially enhancing storage capacity and long-term returns, supported by favorable market conditions.