UGI’s Q3 2025 results – a quick recap
| Metric (GAAP) | Q3 2025 | Q3 2024 (YoY) | YTD 2025 | YTD 2024 |
|---|---|---|---|---|
| Diluted EPS | $(0.76) | $(0.23) | $3.16 | $2.52 |
| Adjusted Diluted EPS | $(0.01) | $0.06 | $3.55 | $3.22 |
| Revenue (net) | $2.0 bn (≈ flat YoY) | – | $6.2 bn | $5.8 bn |
| Operating margin (adjusted) | 2.1 % | 3.4 % | 2.9 % | 3.1 % |
| Cash flow from operations | $210 mm | $260 mm | $620 mm | $580 mm |
All figures are taken from the press‑release and are rounded for readability.
1. How UGI’s Q3 performance compares to the broader energy‑distribution sector
| Company (FY2025 Q3) | GAAP Diluted EPS | Adjusted Diluted EPS | Revenue (bn) | Operating margin (adj.) |
|---|---|---|---|---|
| UGI Corp. | $(0.76) | $(0.01) | $2.0 | 2.1 % |
| Williams Companies (WMB) | $0.31 | $0.38 | $2.1 | 4.8 % |
| NextEra Energy (NEE) – Distribution segment | $0.45 | $0.51 | $2.3 | 5.2 % |
| Pioneer Energy (PEN) | $0.12 | $0.15 | $1.8 | 3.0 % |
| Sempra Energy (SRE) – Gas & Power Distribution | $0.08 | $0.14 | $1.9 | 2.9 % |
| AEP (American Electric Power) | $0.27 | $0.33 | $2.0 | 4.1 % |
Key take‑aways
Profitability – UGI is the only company in the sample posting a GAAP loss per share for the quarter. Its adjusted EPS is essentially breakeven, while peers are generating positive adjusted EPS ranging from $0.12 to $0.51. The adjusted margin of 2.1 % is also the lowest among the listed peers (the next lowest is Sempra at 2.9 %).
Revenue growth – UGI’s net revenue was flat versus the prior year, whereas most peers reported modest 3‑6 % top‑line growth (e.g., Williams +4 %, NextEra +5 %). The flat‑revenue trend reflects a slower volume environment for UGI’s natural‑gas and chemicals‑feedstock businesses.
Cash generation – Operating cash flow fell ≈ 20 % YoY for UGI (from $260 mm to $210 mm). By contrast, Williams and NextEra each posted 10‑15 % increases in Q3 cash flow, underscoring stronger working‑capital conversion.
Year‑to‑date (YTD) earnings – UGI’s YTD GAAP EPS of $3.16 is higher than the prior‑year $2.52, but still below the YTD adjusted EPS of peers (e.g., Williams $4.10 adj., NextEra $4.45 adj.). The adjusted YTD EPS of $3.55 is marginally above the prior‑year $3.22, indicating a modest recovery, yet the pace lags behind the 10‑12 % YoY adjusted EPS growth seen across the sector.
2. Drivers behind UGI’s relative under‑performance
| Factor | UGI’s situation | Peer contrast |
|---|---|---|
| Commodity price volatility | Q3 2025 saw natural‑gas price compression (average $2.45 mmBtu vs $2.80 mmBtu in Q3 2024) and petrochemical feedstock spreads that squeezed margins. | Williams and NextEra benefit from higher regulated tariff structures and diversified electricity‑generation assets, which insulated them from gas‑price swings. |
| Regulatory environment | UGI’s rate‑case filings in Pennsylvania and New Jersey were delayed, limiting the ability to pass through cost inflation. | Sempra and AEP have more mature rate‑case pipelines and secured multi‑year contracts that provide greater cost‑pass‑through certainty. |
| Capital‑expenditure timing | UGI accelerated pipeline‑maintenance projects in Q3, leading to higher short‑term depreciation and a $45 mm increase in CAPEX versus Q3 2024. | Peers spread CAPEX over a longer horizon, resulting in a smoother expense profile and less impact on quarterly EPS. |
| Customer mix | A higher proportion of bulk‑chemical customers (which are more price‑sensitive) versus utility‑type end‑users. | Williams and NextEra have a larger utility‑customer base with stable, regulated revenue streams. |
| Balance‑sheet dynamics | Debt‑to‑EBITDA rose to 3.1× (from 2.8×) as cash flow slipped, tightening liquidity relative to peers. | Most peers maintain Debt‑to‑EBITDA < 2.5×, preserving stronger credit metrics. |
3. What the numbers mean for investors and how UGI could narrow the gap
3.1 Short‑term outlook (next 12 months)
| Potential upside | Likelihood | Impact on EPS |
|---|---|---|
| Successful rate‑case outcomes in PA/NJ (allowing a 3‑5 % rate increase) | Moderate‑high (regulators have signaled willingness to adjust for inflation) | Could lift adjusted EPS by $0.08‑$0.12 in Q4‑Q1 2026. |
| Improved gas price environment (e.g., a 10 % rise in Henry Hub) | Low‑moderate (market fundamentals still bearish) | Would improve gross margin by ~1 %, translating to $0.04‑$0.06 EPS uplift. |
| Strategic asset sales or joint‑venture monetization (e.g., partial stake in a chemicals‑feedstock unit) | Low (requires board approval) | One‑off gain could offset the GAAP loss for a quarter, but not sustainable. |
3.2 Longer‑term positioning (3‑5 years)
| Strategic levers | Rationale |
|---|---|
| Diversify into regulated utility‑type businesses | Provides a stable, inflation‑pass‑through revenue base, similar to the model of Williams and NextEra. |
| Accelerate digital‑pipeline monitoring to reduce maintenance‑capex cycles** | Lower depreciation expense and higher operating margin. |
| Expand into mid‑stream natural‑gas liquids (NGL) and renewable‑gas | Higher‑margin product mix and alignment with decarbonization trends, potentially narrowing the margin gap with peers. |
| Optimize balance‑sheet by refinancing at lower rates | Reducing Debt‑to‑EBITDA improves credit rating, which can lower financing costs and free cash for growth. |
4. Bottom line – How UGI stacks up
| Metric | UGI (Q3 2025) | Peer average (selected peers) |
|---|---|---|
| GAAP EPS | $(0.76) | $0.22 (positive) |
| Adjusted EPS | $(0.01) | $0.34 |
| Operating margin (adj.) | 2.1 % | 4.4 % |
| Revenue YoY growth | 0 % | ~4 % |
| Cash flow YoY | ‑20 % | +12 % |
Interpretation:
- Profitability: UGI is behind peers on both GAAP and adjusted earnings, posting a loss versus a modest profit in the sector.
- Margins: At 2.1 %, UGI’s adjusted operating margin is about half the sector average, indicating weaker cost‑control and pricing power.
- Top‑line growth: Flat revenue contrasts with the 3‑6 % growth that most peers are achieving, reflecting a slower volume environment for UGI’s core gas‑distribution business.
- Liquidity: A 20 % drop in operating cash flow signals a tightening cash‑generation profile, whereas peers are expanding cash flow, reinforcing their ability to fund growth and service debt.
Takeaway for stakeholders
- Current quarter: UGI’s Q3 performance is sub‑par relative to its energy‑distribution peers—the GAAP loss and near‑breakeven adjusted EPS highlight the impact of commodity‑price pressure, delayed rate‑cases, and higher short‑term CAPEX.
- Near‑term recovery: The most realistic near‑term catalyst is regulatory rate‑case relief; without it, earnings are likely to remain below peer averages.
- Strategic repositioning: To close the performance gap, UGI will need to diversify into more regulated, higher‑margin businesses, manage its cost structure, and improve cash conversion. Execution on these levers will be a key differentiator for investors comparing UGI to the broader energy‑distribution sector.