Star Group Shares Dip 1.5% Despite Reporting Y/Y Surge in Q1 Earnings

Core Viewpoint - Star Group's first-quarter fiscal 2025 results showed a significant improvement in earnings per share despite a decline in total revenues, driven by strategic acquisitions and operational efficiencies [2][14]. Revenue & EPS Performances - Earnings per share for the first quarter of fiscal 2025 reached 79 cents, a 147% increase from 32 cents in the same quarter last year [2]. - Total revenues decreased by 7.6% to $488.1 million from $528.1 million year-over-year, primarily due to lower average petroleum prices [2]. Other Key Business Metrics - Home heating oil and propane volumes sold increased by 2.8% year-over-year to 82.4 million gallons, aided by acquisitions and colder weather conditions [3]. - Gross profit from service and installation operations improved to $6.9 million from $4.4 million, reflecting contributions from acquisitions and enhanced operational performance [3]. Adjusted EBITDA - Adjusted EBITDA for the first quarter grew by 5.8% year-over-year to $51.9 million, as improved margins and contributions from recent acquisitions offset volume declines [4]. Expenses - Total costs and expenses declined in line with reduced revenues, with the cost of products sold decreasing to $248.7 million from $303.3 million, reflecting an 18.4% decline in wholesale petroleum prices [5]. - Delivery and branch expenses rose by 5.3% year-over-year to $99.3 million due to acquisition-related activities [6]. Cash & Debt Position - As of December 31, 2024, cash and cash equivalents were reported at $48.8 million, down from $117.3 million at the end of fiscal 2024, primarily due to cash outflows related to acquisitions [7]. - Total debt stood at $211.5 million, with a focus on maintaining financial flexibility and generating sufficient cash flow to support operations and growth initiatives [8]. Management Commentary - The CEO highlighted achievements in service and installation operations and successful strategic acquisitions, expressing optimism for the remainder of fiscal 2025 [9]. - The CFO noted improved per-gallon margins and EBITDA contributions from acquisitions as key drivers of financial performance, while acknowledging challenges from customer attrition and demand fluctuations [10]. Factors Influencing Results - Colder weather, increased per-gallon margins, and recent acquisitions positively influenced performance, while lower wholesale petroleum prices affected overall revenues [11]. Guidance & Strategic Focus - The company expects continued momentum supported by colder-than-expected temperatures and operational enhancements, with strategic priorities including acquisitions to offset customer attrition [12]. Other Developments - After the first quarter, Star Group completed a significant acquisition to enhance its propane distribution capabilities, expected to drive growth and complement existing operations [13]. Conclusion - The first-quarter results demonstrated strong bottom-line improvement despite revenue challenges from lower petroleum prices, with strategic acquisitions and enhanced service operations supporting growth [14].