UGI Reaffirms Guidance as Utilities Growth Offsets AmeriGas Slide
UGI held its fiscal 2026 adjusted profit forecast at $2.75 to $2.90 a share even as AmeriGas Propane's quarterly operating loss widened to $53 million.
UGI (UGI) reported a fiscal third-quarter GAAP loss of $0.62 a share, narrower than the $0.76 loss a year earlier, while adjusted diluted earnings per share worsened to a loss of $0.20 from a loss of $0.01. The gap between the two measures reflects non-operating derivative and disposal-related adjustments that flattered the bottom line even as core earnings power softened.
The quarter followed a February-quarter report in which UGI had already lowered its fiscal 2026 adjusted earnings guidance to $2.75 to $2.90 a share, alongside disclosure of a roughly $470 million agreed sale of its electric division and a new gas-infrastructure partnership with Prime Data Centers. Neither item resurfaced in the third-quarter release, and management instead reaffirmed the same guidance range unchanged, a signal the company treated the prior quarter's reset as sufficient rather than a starting point for further cuts.
Year-to-date, adjusted diluted earnings per share fell to $3.17 from $3.55, while GAAP diluted earnings per share held roughly flat at $3.08 versus $3.16 a year earlier. Reportable segment EBIT for the nine months was essentially unchanged at $1.19 billion versus $1.18 billion, a result the company achieved despite absorbing an approximate $40 million combined drag from LPG divestitures and warmer weather.
The Utilities segment carried the quarter. Total margin rose $13 million, or 8%, and segment EBIT climbed $10 million, or 33%, on higher Pennsylvania gas base rates, even as Gas Utility throughput fell 11% to 73 billion cubic feet from 82 billion, a decline tied to divestiture and customer-mix effects rather than demand. Midstream & Marketing also improved, with total margin up $13 million, or 17%, and EBIT up $3 million, or 11%, on the timing of capacity margin and pipeline cost recovery, though operating and administrative expense rose $8 million, or 25%, as new plants came into service.
AmeriGas Propane moved the other direction. The unit's operating loss widened to $53 million from $28 million, an 89% deterioration, as retail gallons sold fell 10% and total margin dropped $26 million, or 11%, extending a pattern of customer attrition. A narrower weather-adjusted, divestiture-excluded gallon decline of 6% in the quarter versus a 2% decline year-to-date serves as evidence of improving retention and net promoter scores, though the underlying volume trend remains negative. UGI International posted a smaller decline, with retail LPG gallons down 10% to 125 million and total margin off $6 million, or 3%, after the sale of its Italy, Austria and Eastern Europe LPG businesses, partly offset by higher unit margins and roughly $5 million of favorable currency translation.
UGI disclosed two new items alongside the results. A Pennsylvania gas base rate case settlement, pending state utility commission approval, would raise distribution rates by $65 million in two phases, $40 million effective October 2026 and $25 million effective October 2027, a step beyond the weather-normalization rider activity referenced in the prior quarter. The company also completed debt refinancing across UGI International, AmeriGas and UGI Energy Services expected to cut annualized borrowing costs by about $30 million, following AmeriGas's tender offer earlier in the fiscal year to repurchase up to $175 million of its 9.375% notes due 2028.
Corporate and other results, combined with the rest of the business, narrowed UGI's total net loss attributable to the company to $133 million from $163 million a year earlier, a swing driven mainly by non-operating items rather than operating performance. With guidance held steady and rate relief now working through the regulatory process, the quarter left UGI's utilities growth carrying the weight of a propane business still working through customer losses.