UGI Corporation (UGI) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presents a mixed picture: strong EBIT growth in some segments and improved liquidity, but a decline in adjusted EPS and challenges in the Midstream & Marketing segment. The Q&A reveals some operational improvements and strategic focus but lacks clarity in certain responses. The financial performance and strategic plans seem balanced, leading to a neutral outlook. The market cap suggests moderate sensitivity to these factors, hence a neutral prediction (-2% to 2%) for the stock price over the next two weeks.
Key Financial Performance
Total Reportable Segment EBIT $441 million, up 5% year-over-year. The increase was driven by strong results in natural gas businesses due to robust gas demand and the impact of the 2025 gas base rate case at the Pennsylvania utility, as well as effective margin management and cost control in Global LPG businesses.
Adjusted Diluted EPS $1.26, down from $1.37 in the prior year. The decline was due to the absence of investment tax credits realized last year, higher interest expense, and lost earnings from divestitures in Hawaii, Italy, and Austria, partially offset by strong segment-level performance.
Utilities EBIT $157 million, up $16 million year-over-year. This was driven by 21% colder temperatures leading to a 16% increase in core market volumes, higher gas base rates in Pennsylvania, and sustained customer additions. Operating and administrative expenses increased by $9 million due to higher personnel and maintenance expenses.
Midstream & Marketing EBIT $88 million, down from $95 million in the prior year. The decline was due to pipeline rate increases, which are expected to be recovered over time, and higher operating and administrative expenses of $6 million due to personnel-related costs and new plants placed in service.
UGI International EBIT $124 million, up $14 million year-over-year. The increase was attributed to operating efficiencies, effective margin management, and favorable foreign currency translation effects, which offset declines from divestitures and reduced crop drying campaign volumes.
AmeriGas EBIT $72 million, down $2 million year-over-year. Total retail LPG volume increased by 1 million gallons due to colder weather in the East, but this was offset by warmer weather in the West and the Hawaii divestiture. Operating and administrative expenses rose by $8 million due to investments in customer-facing initiatives.
Available Liquidity $1.6 billion, up $100 million year-over-year. This includes cash, cash equivalents, and available borrowing capacity on revolving credit facilities. The improvement reflects progress in stabilizing and improving the business.
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Operating Highlights
New Carlisle LNG storage and vaporization facility: Now operational, backed by a long-term contract with the Utility segment. Strengthens integrated natural gas platform and meets growing demand in the region.
LPG portfolio optimization: Substantially complete with divestitures in 7 European countries, generating approximately $215 million in cash proceeds. Focus sharpened on markets with strong competitive positions and growth opportunities.
Gas base rate case filings: Filed for UGI Utilities and Mountaineer Gas Company, requesting distribution rate increases of $99 million and $27 million respectively, supporting $500 million in system and technology upgrades.
Safety improvements: 45% reduction in recordable incidents and 60% less lost time injuries at AmeriGas. Improved safety metrics across the enterprise.
Operational transformation at AmeriGas: Reduction in 0 fill rates, average miles driven, and customer service call volumes. Improved customer satisfaction metrics, achieving highest Net Promoter Score since 2023.
Capital deployment: $225 million deployed, with 73% allocated to regulated utilities for infrastructure replacement and system betterment.
Debt reduction and financial stability: Moody's upgraded AmeriGas' outlook to positive. Focus on reducing leverage to achieve sub 4.5x target through debt reduction and EBIT growth.
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Risk or Challenges
Higher operating and administrative expenses: The company experienced increased operating and administrative expenses in its domestic segments, which could impact profitability.
Lost earnings from divestitures: The divestitures in Hawaii, Italy, and Austria resulted in lost earnings, which contributed to a decline in adjusted diluted EPS.
Pipeline rate increases: Pipeline rate increases offset the margin benefits from colder weather in the Midstream & Marketing segment, which could affect financial performance.
Structural conservation and reduced crop drying campaigns: UGI International faced lower retail LPG volumes due to structural conservation and reduced crop drying campaigns, impacting revenue.
Higher personnel and maintenance expenses: The Utilities segment experienced increased personnel and maintenance expenses, which could pressure margins.
Foreign currency translation effects: Unfavorable foreign currency translation effects impacted UGI International's operating and administrative expenses.
Customer attrition and retention costs: AmeriGas faced challenges with customer attrition and incurred higher personnel-related and advertising expenses to improve customer retention.
Debt leverage: The company is focused on reducing leverage to achieve a long-term target of sub 4.5x, indicating current financial constraints.
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Guidance & Outlook
Revenue and EBIT Projections: UGI anticipates continued EBIT growth driven by strength in natural gas businesses and disciplined margin management in Global LPG operations. The company aims to achieve a long-term leverage target of sub 4.5x through a combination of debt reduction and EBIT growth.
Capital Expenditures: UGI plans to invest over $500 million in system and technology upgrades for its natural gas infrastructure over the next three years, with a focus on safety and reliability.
Rate Cases and Revenue Growth: UGI filed a gas base rate case for UGI Utilities and Mountaineer Gas Company, requesting an overall distribution rate increase of approximately $99 million and $27 million, respectively. These rate cases are expected to support continued investment in infrastructure.
Market Trends and Demand: UGI's New Carlisle LNG storage and vaporization facility is now operational, designed to meet growing natural gas demand in the region. The company is also well-positioned to capture increasing demand in Pennsylvania.
Operational Improvements: UGI is focusing on operational excellence and safety, with significant improvements in safety metrics and operational efficiency at AmeriGas. These efforts are expected to enhance customer satisfaction and operational performance.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:How has AmeriGas been performing during the recent extreme winter weather in terms of deliveries, margins, and overall operations?
A:AmeriGas has shown substantial improvement with record safety metrics, fewer recordable injuries, and higher Net Promoter Scores compared to last year. However, there have been challenges in certain geographic locations due to road conditions impacting delivery. The company has managed to redeploy resources from warmer regions in the West to the colder East to meet demand.
Q:Has the volatility in natural gas prices benefited the marketing business?
A:Yes, weather typically benefits the marketing business. However, during extended cold weather periods, the utility may need some of the capacity. The team has been managing the situation effectively to ensure the utility has the required gas.
Q:Why is the company pursuing a rate case in Pennsylvania relatively quickly, and are there any structural changes being requested?
A:The company is focusing on affordability and operational efficiency, which directly benefits customer bills. The rate case is consistent with past practices, focusing on infrastructure safety and maintaining affordability. No extraordinary or unusual structural changes are being requested.
Q:What is the progress on increasing natural gas demand in Pennsylvania and the related NDAs?
A:Discussions with power providers and data centers are progressing as expected. A small group has moved to the next level, and the company hopes to announce developments during the fiscal year. Recent directives from the White House and state governors on emergency power procurement add further opportunities.
Q:Why was the Chief Strategic Officer role created, and what are its objectives?
A:The role was created to focus on medium- and long-term objectives, including portfolio strategy, environmental and regulatory issues, and growth opportunities. This aligns with the company’s goal of building a sustainable future while maintaining operational excellence.
Q:What is the impact of the lag in recovery of pipeline transportation costs on the midstream business?
A:The lag in recovery of pipeline transportation costs, due to a FERC rate increase, is approximately $5 million. The company expects to recover a significant portion of this in fiscal 2026.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the timing and exact outcomes of discussions related to increasing natural gas demand in Pennsylvania and the NDAs. Additionally, the response regarding the Chief Strategic Officer role was somewhat broad, lacking specific actionable plans or immediate impacts.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AmeriGas Better
AmeriGas Partners
AmeriGas instance
AmeriGas outlook
AmeriGas reduction
AmeriGas strength
Austria conservation
Austria segment
Better Bureau
Bureau Promoter
EBIT period
Energy
International EBIT
Italy Austria
Moody AmeriGas
Tameka
UGI Utilities
Utility
aggregate
base rate
bill
case UGI
comparison
currency translation
demand
divestiture Hawaii
gas base
gas business
gas service
improvement customer
objective
rate case
rate increase
region
safety
team
temperature
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transformation
UGI Transcript
UGI Corporation (UGI) Q1 2026 Earnings Call Transcript
Unknown2-5
The earnings call presents a mixed picture: strong EBIT growth in some segments and improved liquidity, but a decline in adjusted EPS and challenges in the Midstream & Marketing segment. The Q&A reveals some operational improvements and strategic focus but lacks clarity in certain responses. The financial performance and strategic plans seem balanced, leading to a neutral outlook. The market cap suggests moderate sensitivity to these factors, hence a neutral prediction (-2% to 2%) for the stock price over the next two weeks.
UGI Corporation (UGI) Q4 2025 Earnings Call Transcript
Unknown11-21
The earnings call presents a mixed picture. Financial performance shows positive adjusted EPS growth and strong free cash flow, but there are concerns about declining margins and higher income tax expenses. The Q&A section reveals confidence in growth but also highlights strategic execution risks and unclear responses about tax credits. The market strategy includes exiting wholesale LPG, which may streamline operations but also signals challenges. Given these factors, coupled with a market cap suggesting moderate volatility, the stock is likely to remain stable, resulting in a neutral sentiment rating.
UGI Corporation (UGI) Q3 2025 Earnings Call Transcript
Unknown8-7
The earnings call reveals mixed results: while there's a positive guidance increase and operational improvements, key financial metrics such as EBIT across segments showed declines. The Q&A highlighted potential benefits from legislative changes and investment opportunities, but lacked specific details, creating uncertainty. The market cap indicates a moderate reaction; hence, the stock is likely to remain neutral in the short term.
UGI Corporation (NYSE:UGI) Q2 2025 Earnings Call Transcript
Positive5-9
The earnings call highlighted strong financial performance, including increased EPS guidance, EBIT growth, and significant free cash flow improvement. Despite operational and regulatory risks, the company is focused on strategic improvements and partnerships, which are viewed positively. The Q&A revealed management's commitment to addressing refinancing and operational efficiency, although some responses lacked clarity. Overall, the positive financial metrics and strategic focus outweigh the risks, suggesting a stock price increase in the short term.
UGI Slides
UGI Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
