Core Viewpoint - Star Group, L.P. (SGU) has experienced a decline in share price and underperformed against the S&P 500 index following its third-quarter fiscal 2025 results, indicating challenges in revenue and profitability [1] Q3 Results - For the fiscal quarter ending June 30, 2025, Star Group reported revenues of $305.6 million, a decrease of 7.8% from $331.6 million in the prior-year quarter, attributed to lower product sales volumes and decreased selling prices [2] - Home heating oil and propane volume fell by 3.8% to 36.2 million gallons, with customer attrition and warmer weather impacting performance [2] Financial Performance - The company reported a net loss of $16.6 million, compared to a loss of $11 million in the same period last year, with an adjusted EBITDA loss widening to $10.6 million from $4.1 million [3] - Loss per share was 48 cents, wider than the 31 cents loss in the previous year [3] Other Key Business Metrics - Service and installation performance improved, with gross profit rising by $0.6 million to $14 million, reflecting expense control [4] - Delivery and administrative expenses increased by $4.3 million year over year, primarily due to acquisition-related costs [4] Year-to-Date Performance - In the first nine months of fiscal 2025, volumes rose by 11.8% to 262.6 million gallons, supported by colder weather and acquisitions [5] - Product gross profit for the nine months grew by 13% to $480 million, with net income increasing by 45% year over year to $102.2 million [5] Management Commentary - Management highlighted improved service metrics and benefits from propane acquisitions, despite seasonal weaknesses and customer attrition [6] - The company aims to expand its customer base in propane and heating oil while diversifying revenue streams to mitigate weather sensitivity [6] Factors Influencing Results - Revenue decline was linked to reduced heating oil and propane demand due to warmer temperatures, which were 2% warmer than last year and 19.3% warmer than normal [7] - Selling prices fell alongside a 14.3% decline in wholesale product costs [7] Margin Pressures - Margins faced pressure from acquisition-related mix effects, although acquisitions contributed positively to adjusted EBITDA during a typically loss-making quarter [8] - Expense growth was primarily driven by acquisition-related integration costs, while base business expenses were managed tightly [8] Future Outlook - Management expressed confidence in achieving strong fiscal 2025 performance, citing benefits from acquisitions and improved operational execution [10] - The company is positioned as a more resilient and diversified energy provider capable of adapting to varied weather conditions [10] Other Developments - Star Group completed four acquisitions in fiscal 2025, with a focus on propane, which significantly contributed to quarterly results [11] - AI technology has been introduced into customer service interfaces to enhance responsiveness while maintaining a personal touch [11]

Financial Data and Key Metrics Changes - For the third quarter, home heating oil and propane volume decreased by 1,500,000 gallons or 3.8% to 36,000,000 gallons due to warmer weather and net customer attrition [8] - Product gross profit decreased by $3,000,000 or 4% to $72,000,000, attributed to lower volume sold and lower per gallon margins [8] - The company posted a net loss of $16,600,000, which is $5,600,000 more than the prior year period, reflecting an increase in adjusted EBITDA loss and higher depreciation and amortization expenses [9] - Adjusted EBITDA loss increased by $6,500,000 to $10,600,000, primarily due to lower home heating oil and propane volumes [9] Business Line Data and Key Metrics Changes - Year-to-date home heating oil and propane volume increased by 28,000,000 gallons or 12% to 263 million gallons, driven by colder temperatures and acquisitions [10] - Product gross profit rose by $55,000,000 or 13% to $480,000,000 due to increased volume and higher margins [10] - Gross profit from service and installation increased by $4,800,000 year to date, with contributions from both acquisitions and base business initiatives [10] Market Data and Key Metrics Changes - Temperatures for the third quarter were 2% warmer than last year and almost 20% warmer than normal, impacting volume negatively [8] - Year-to-date temperatures were 8% colder than the prior year but still 8% warmer than normal [10] Company Strategy and Development Direction - The company is focused on improving customer retention and driving additional revenues through value-added products and services [5] - There is a strategy to grow the heating oil and propane customer base through acquisitions while improving service and installation profitability [6] - The company aims to position itself as a fully diversified energy provider, adaptable to varied weather conditions [6] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about strong financial performance in fiscal 2025 despite challenges in the third quarter [4] - The management highlighted the importance of maintaining a personal touch in customer service while exploring AI applications [18] Other Important Information - Delivery, branch, and G&A expenses increased by $31,500,000 year over year, with significant contributions from recent acquisitions and weather hedging programs [11] - The company recorded a non-cash favorable change in the fair value of derivative instruments, contributing positively to net income [12] Q&A Session Summary Question: Update on acquisition pipeline and AI applications - Management confirmed the closure of four transactions this fiscal year and ongoing activity in the acquisition pipeline [17] - AI technology has been integrated into customer interfaces, but the company emphasizes the importance of personal customer service [18]

Financial Performance - For the fiscal 2025 third quarter, Star Group reported a 7.8% decrease in total revenue to $305.6 million compared to $331.6 million in the prior-year period, primarily due to lower product sales [2] - The volume of home heating oil and propane sold decreased by 1.5 million gallons, or 3.8%, to 36.2 million gallons, influenced by warmer weather and net customer attrition [2] - Star's net loss increased by $5.6 million to $16.6 million, attributed to a greater Adjusted EBITDA loss and higher depreciation and interest expenses [3] - The third quarter Adjusted EBITDA loss was $10.6 million, compared to a loss of $4.1 million in fiscal 2024, due to lower margins and decreased volume sold [4] Year-to-Date Performance - For the nine months ended June 30, 2025, total revenue rose modestly by less than 1.0% to $1.5 billion, driven by higher volumes sold despite declining selling prices [6] - The volume of home heating oil and propane sold increased by 27.7 million gallons, or 11.8%, to 262.6 million gallons, reflecting colder temperatures and acquisitions [6] - Star's net income for the first nine months increased by $31.9 million to $102.2 million, mainly due to higher Adjusted EBITDA and favorable changes in derivative instruments [7] Adjusted EBITDA Analysis - Year-to-date Adjusted EBITDA increased by $28.2 million to $169.5 million, reflecting higher margins and volume sold, partially offset by increased expenses related to weather hedge contracts [8] - The increase in Adjusted EBITDA in the base business was driven by improved margins and higher sales volumes due to colder weather [9] Management Commentary - The CEO noted that the third quarter was negatively impacted by lower volume due to warmer temperatures and net attrition, but highlighted improvements in service and installation performance [5] - The company aims to grow its propane and heating oil customer base while enhancing service profitability, positioning itself as a diversified energy provider [5]

Company Overview - Star Group, L.P. is a full-service provider specializing in home heating products and services for residential and commercial customers, including heating and air conditioning equipment [2] - The company is recognized as the largest retail distributor of home heating oil in the U.S. based on sales volume, serving customers primarily in the Northeast and Mid-Atlantic regions [2] Financial Information - Star Group declared a quarterly distribution of $0.1850 per common unit for the three months ended June 30, 2025 [1] - The record date for this distribution is July 28, 2025, and the payment date is August 6, 2025 [4]

Financial Data and Key Metrics Changes - The company reported a net income of $86 million for the second quarter of fiscal 2025, which is $18 million higher than the prior year period, driven by a $32 million increase in adjusted EBITDA [8] - Adjusted EBITDA rose by $32 million to $128 million due to higher home heating oil and propane volumes sold and improved margins [8] - For the first half of fiscal 2025, net income was $119 million, an increase of $37 million compared to the prior year, largely due to a $34.6 million increase in adjusted EBITDA [10] Business Line Data and Key Metrics Changes - Home heating oil and propane volume increased by 27 million gallons or 23% to 144 million gallons in the second quarter, attributed to acquisitions and colder weather [7] - For the first half of fiscal 2025, home heating oil and propane volume rose by 29 million gallons or 14.7% to 226 million gallons [9] - Product gross profit increased by $52 million or 25% to $258 million in the second quarter, driven by higher volumes and margins [7] Market Data and Key Metrics Changes - Temperatures during the second quarter were 13% colder than the previous year but still 4.5% warmer than normal, impacting heating demand positively [7] - The geographic areas of operation experienced temperatures that were 9.4% colder than the prior year for the fiscal year to date [9] Company Strategy and Development Direction - The company is focusing on operational execution and efficiency while expanding its HVAC business [6] - Recent acquisitions totaling $126.5 million have been completed, enhancing the company's market presence [5] - The company raised its annual dividend by $0.05 to $0.74 per unit, reflecting a commitment to maximizing shareholder returns [5] Management's Comments on Operating Environment and Future Outlook - Management expressed satisfaction with the team's response to increased demand due to colder temperatures and highlighted ongoing efforts to improve service and installation profitability [6] - The company anticipates further investment opportunities during the summer to advance business development initiatives [7] Other Important Information - The company recorded a $3.1 million expense under its weather hedge for the second quarter, compared to a benefit of $6.5 million in the prior year [8] - Delivery, branch, and general & administrative expenses increased by $22 million year over year, with $9.6 million attributed to the weather hedging program [8] Q&A Session Summary Question: Changes to the buyback program due to recent acquisitions - Management confirmed there has been no change to the buyback program, which is currently on automatic pilot [15][16] Question: Acquisition pipeline focus on HVAC installation servicing - The company is primarily focused on distribution side acquisitions, particularly in heating oil and propane, while also building its HVAC business organically [17] Question: Customer payment ability and credit loss allowances - Historically, the bad debt rate has been around 3% of sales, and management noted that customers prioritize paying for home heating oil during winter [19] Question: Impact of tariffs on heating oil prices - Management acknowledged experiencing price increases on the HVAC side due to tariffs, with vendor notice allowing for price adjustments [24] Question: Availability of acquisitions and execution capability - Management indicated no significant changes related to taxes affecting acquisition availability and noted a busy heating season with pent-up demand [25]

Core Viewpoint - Star Group, L.P. reported strong financial results for the second quarter of fiscal 2025, driven by increased sales volumes and colder weather, despite lower selling prices for petroleum products [2][5]. Financial Performance - Total revenue for the second quarter increased by 11.6% to $743.0 million compared to $666.0 million in the same period last year, primarily due to higher volumes sold [2]. - The volume of home heating oil and propane sold rose by 22.9% to 143.9 million gallons, attributed to colder weather and acquisitions [2][5]. - Net income for the quarter increased by $17.5 million to $85.9 million, supported by a $31.9 million rise in Adjusted EBITDA [3][7]. Adjusted EBITDA - Adjusted EBITDA for the second quarter was $128.2 million, up from $96.3 million in fiscal 2024, reflecting improved margins and increased sales volume [4][8]. - The company faced a $9.6 million negative impact from its weather hedge, recording an expense of $3.1 million due to colder temperatures compared to a credit of $6.5 million in the prior year [4][8]. Year-to-Date Performance - For the six months ended March 31, 2025, total revenue increased by 3.1% to $1.2 billion, with home heating oil and propane volumes up by 14.7% to 226.3 million gallons [6][8]. - Year-to-date net income rose by $37.4 million to $118.8 million, driven by higher Adjusted EBITDA and favorable changes in the fair value of derivative instruments [7][8]. Operational Highlights - The company completed $126.5 million in acquisitions since February 1, 2024, contributing to the volume increase [5]. - Star Group raised its annual dividend by $0.05 to $0.74 per unit, reflecting confidence in its operational performance [5]. Market Conditions - The temperatures in Star's operational areas were 12.9% colder than the same period last year but 4.5% warmer than normal, impacting sales positively [2][6]. - The decline in selling prices was largely due to a decrease in wholesale product costs, which fell by $0.2887 per gallon, or 10.9% [2]. Summary of Sales - Total sales for the second quarter reached $743.0 million, with product sales at $665.1 million and installation and services at $77.9 million [18]. - For the six months, total sales were $1.231 billion, with product sales at $1.064 billion and installation and services at $166.5 million [18]. Cash Flow and Investments - Net cash provided by operating activities for the second quarter was $48.6 million, while net cash used in investing activities was $81.8 million [20]. - The company sold 143.9 million gallons of home heating oil and propane in the second quarter, compared to 117.1 million gallons in the prior year [20].

Core Viewpoint - Star Group, L.P. is set to release its fiscal 2025 second quarter results on May 7, 2025, with a subsequent conference call scheduled for May 8, 2025, to discuss the financial performance for the three and six months ended March 31, 2025 [1]. Company Overview - Star Group, L.P. is a full-service provider specializing in home heating products and services for residential and commercial customers, including heating and air conditioning equipment [3]. - The company is recognized as the largest retail distributor of home heating oil in the U.S. based on sales volume, serving customers primarily in the Northeast and Mid-Atlantic regions [3]. - In addition to home heating oil, Star also sells diesel, gasoline, and provides delivery services [3]. Upcoming Events - The fiscal 2025 second quarter results will be available after market close on May 7, 2025, followed by a management-hosted webcast and conference call on May 8, 2025, at 11:00 a.m. Eastern Time [1][2].

Core Insights - The article highlights the performance and outlook of several major companies, including Novo Nordisk, Coca-Cola, Wells Fargo, and Star Group, based on recent research reports from Zacks Equity Research. Novo Nordisk - Shares of Novo Nordisk have underperformed the Zacks Large Cap Pharmaceuticals industry over the past year, declining by 37% compared to a 3% increase in the industry [4] - The company faced setbacks due to the failure to meet weight-loss targets with CagriSema and intense competition in the obesity sector, alongside challenges from patent expirations and pricing pressures in the diabetes market [4] - Despite these challenges, Novo Nordisk exceeded fourth-quarter earnings and sales estimates, driven by strong performance from diabetes drugs Ozempic and Rybelsus, as well as the obesity drug Wegovy [5] - The company is addressing supply constraints for Wegovy through significant investments to increase production and is expanding its indications to include cardiovascular benefits [6] Coca-Cola - Coca-Cola's shares have outperformed the Zacks Beverages - Soft Drinks industry over the past year, increasing by 19.2% compared to a 6.6% rise in the industry [7] - The company has consistently beaten sales and earnings expectations for eight consecutive quarters, with fourth-quarter results benefiting from strong business momentum and higher pricing amid inflation [8] - Coca-Cola's strategy focuses on marketing, innovation, and revenue growth management, which is expected to drive revenue growth in 2025, although the company faces inflationary cost pressures [9] Wells Fargo - Shares of Wells Fargo have outperformed the Zacks Financial - Investment Bank industry over the past six months, increasing by 42.2% compared to a 25% rise in the industry [10] - The company is enhancing its risk management and compliance infrastructure, having resolved ten regulatory consent orders since 2019, which supports its operational strategy [10] - Efficiency initiatives, including branch reductions, are expected to lower expenses and drive growth, although loan growth may be limited due to ongoing regulatory constraints [12] Star Group - Star Group's shares have outperformed the Zacks Electronics - Miscellaneous Products industry over the past year, increasing by 26.6% compared to a 44.2% decline in the industry [13] - The company reported a first-quarter net income surge to $32.9 million, driven by favorable derivative movements, despite revenue declines [13] - Adjusted EBITDA rose to $51.9 million, supported by acquisitions and margin expansion, although overall revenues fell by 7.6% to $488.1 million due to lower selling prices [14][15]