New Jersey Resources Corporation (NYSE:NJR) Q1 2023 Earnings Call Transcript

Jamieson Ward: Hey. So just wanted to thank you for the helpful responses so far and wanted to expand and clarify a bit on a couple of prior answers you provided. First off, and I guess the seasonal aspect of the fourth quarter, but again, just wanted to expand and clarify. So at the gas utility, despite the stronger customer growth and higher earnings year-over-year for the first quarter, it looks like you lowered guidance for the segment on an actual EPS basis despite the $0.20 raise for the year for the entire company. But for the segment, it looks like it’s about $0.06 to $0.08 lower based on the new weightings and the higher guidance. Could you just remind us of your expectations for inflationary pressures on O&M for the year or any other potential drags that you now expect versus the November original guidance and what was baked into that? And then I have a follow-up.

Roberto Bel: Good morning. This is Roberto. I think what you are referring is to the breakdown — the percent breakdown of our NFE by BU that we show in our presentation. And for the utility, you’re right, that’s lower, but the reason that’s lower is because the whole business is so much higher, right? So on an absolute basis, we do not expect the utility to be lower.

Jamieson Ward: But — okay. Well, I just took the $2.42 to $2.52 original and then did that by 55% and also by 60%, took those numbers and then took the revised $2.62 to $2.72 and did that by the 48% and then separately by the 53% and then compared the bottom of each the — top of each, and that’s where I came up with a $0.06 to $0.08 lower. I’m not going off midpoints or averages or anything. So that’s — is there a different way to look at it?

Roberto Bel: Yeah. So we can take that off-line to explain that.

Jamieson Ward: Sure. No problem.

Roberto Bel: If you were to look at the guidance range for equity based on the original guidance range of $2.42% to $2.52 and what we’re showing today, you would see that on an absolute basis, there are really no changes.

Jamieson Ward: Okay. Yeah. Let’s kick it off-line then. But yeah — no, I was just coming up with $0.06 to $0.08 lower in absolute changes from one to the next, but that’s okay. So just moving on as a follow-up but not on the EPS side. After backing out the $20 million contribution from the AMA this quarter and the roughly $22 million contribution in the same quarter a year ago, looks like you had an almost $0.40 improvement year-over-year, mostly driven by Winter Storm Elliott. And I’m specifically looking here, just add Energy Services, I get that other parts of the business also contributed to the outperformance. But just narrowing in there, given that you only use half of that to raise guidance by, it seems like you’ve got a very, very nice buffer to start the year, something that I’m sure a lot of your peers envy given a lot of inflationary pressures and other cost pressures that everyone is encountering.

Could you walk us through the top couple of potential earnings drags that you had been worried about back in November when you gave guidance and that you are now less so since you presumably still have another $0.20 or so of buffer left for the year?

Roberto Bel: Yeah. So maybe the first thing to address is the buffer you’re talking about, right? It’s — so the way to think about that is you have timing changes, especially coming from Energy Services as you think at how their demand charges happen. They tend to happen. So for the most part in the second part of the year where there are lower revenue, so there is a timing change that are affecting the buffer that you’re discussing. And then we’re just generally cautious about what could happen right now, especially with electricity prices.