National Fuel Gas Company (NFG) Earnings & Analysis

Latest quarter

National Fuel Gas reported Q3 FY2026 revenue of $537.5 million, below the consensus of $564.4 million, while adjusted earnings per share of $1.54 exceeded the consensus of $1.47. Revenue rose from $531.8 million a year earlier, but diluted EPS fell to $1.45 from $1.64.

The company’s filing attributes the decline in quarterly earnings primarily to a corporate loss and lower earnings in Integrated Upstream and Gathering. The filing says that segment’s gas production revenue after hedging declined as natural well declines reduced production, partly offset by recently connected wells and a higher average price after hedging.

National Fuel said Utility revenue increased as higher New York delivery rates helped lift retail gas sales revenue, although warmer weather reduced throughput. Pipeline and Storage revenue also increased, driven primarily by storage and transportation revenue.

The company’s operating margin fell to 38.9% from 43.3% a year earlier, and free cash flow declined to $111.0 million from $195.4 million.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO David Bauer said rising natural gas demand was generating interest in interstate pipeline expansions. He said National Fuel had enlarged its Line N upgrade, with the added capacity contracted for 20 years to support the initial coal-to-gas conversion at Shippingport Power Station. Bauer said the company was also discussing capacity for data centers and power generation in southwest Pennsylvania.

CFO Timothy Silverstein said lower upstream production more than offset stronger gas price realizations and hedge gains in the quarter. He said regulated-business margin growth from New York rates and a Pennsylvania modernization mechanism was largely offset by higher operating costs, including a prior-year bad debt benefit that did not recur and costs from a new labor agreement.

Seneca Resources President Justin Loweth said Upper Utica wells on the first co-development pad performed modestly below expectations. He said testing had also revealed greater-than-anticipated interactions between offset Lower Utica wells, affecting near-term production and informing changes to future well designs. Asked about the interactions, Loweth said they occurred between Lower Utica wells, not between the Upper and Lower zones, and that the team was implementing practices intended to dampen further impacts.

Loweth said National Fuel planned additional discretionary leasing in Tioga County and expected wells to come online in the fourth quarter. He said the company was adjusting its development program as it assessed completion designs and sought more production per dollar invested.

Bauer said Ohio regulators had approved the pending gas utility acquisition and that the company was targeting a calendar fourth-quarter closing at the time of the call. Asked about capital allocation, Silverstein said the near-term focus would be using free cash flow to reduce debt; he said other uses, including shareholder returns, could be considered later.

Guidance

National Fuel revised its FY2026 adjusted EPS guidance to $7.40–$7.60, primarily reflecting an updated production outlook. The company lowered its Integrated Upstream and Gathering production expectation to 420 to 430 Bcf, citing appraisal activity and greater-than-anticipated well interactions.

National Fuel revised FY2026 capital spending guidance to $580.0 million–$605.0 million for Integrated Upstream and Gathering and $235.0 million–$265.0 million for Pipeline and Storage. It also introduced a discretionary land acquisition program expected to add $20.0 million–$40.0 million of spending outside the upstream and gathering capital guidance.