National Fuel added 335,000 customers. Why is its earnings outlook lower?
Ohio expands the regulated business, but the new earnings range also reflects gas prices and acquisition financing. The planned split creates another comparison to watch.
National Fuel added about 335,000 customers when its $2.62 billion Ohio gas utility acquisition closed October 1. Its first earnings forecast for the new fiscal year nevertheless sits below the adjusted result it just reported.
The company expects adjusted earnings of $6.00 to $6.40 a share for fiscal 2027, compared with $7.55 for the year ended September 30, 2026. The comparison brings together a bigger utility, lower gas-price assumptions and a change in the treatment of acquisition financing.
Our National Fuel company profile tracks those changes, the latest results, debt and the planned separation of its gas production business.
Ohio grows the steadier side of the business
National Fuel combines gas production and gathering in Pennsylvania with regulated utilities, pipelines and storage. Ohio doubled the utility business's rate base, the assets on which regulators allow it to earn a return.
The company expects utility operating income of $235 million to $255 million in fiscal 2027, compared with about $123 million last year. Ohio contributes a full year, alongside rate increases in New York and Pennsylvania.
Pipeline and storage revenue is also expected to rise. The Tioga Pathway and Shippingport Lateral projects entered service November 1, adding capacity under long-term customer arrangements.
The acquisition has a financing cost. National Fuel paid $1.42 billion in cash and issued a $1.2 billion seller note bearing 6.5% interest. That note is due September 30, 2027.
The earnings figures use different financing assumptions
Research by Ticker Byline shows that Ohio's financing enters the new forecast after being excluded from the prior year's adjusted earnings comparison. We compared the fiscal 2026 reconciliation with the new guidance: the $7.55 result removes acquisition-financing costs and the effect of the shares issued for Ohio, while fiscal 2027 includes the acquired business and its financing.
That makes the apparent decline broader than a change in the underlying businesses' profit. It also means the new range is the starting outlook for 2027, rather than a reduction to an earlier 2027 forecast.
The completed year's $7.55 adjusted result was inside July's latest $7.40 to $7.60 target. Reported earnings were $7.02 a share, up from $5.68 a year earlier.
Gas prices and well development still matter
The production business faces a lower price assumption: $2.85 per million British thermal units for the NYMEX gas benchmark, versus $3.61 in fiscal 2026. Hedging contracts and fixed-price sales provide some protection, while leaving part of production exposed to market prices.
National Fuel also describes fiscal 2027 as a transition year for development. Appraisal work and interactions between wells affected recent production. The plan focuses on adjusting completion designs and the sequence in which wells are developed, with production growth expected to resume in fiscal 2028.
The new production range is 400 billion to 435 billion cubic feet, against about 419 billion last year, and includes estimated price-related curtailments in October. Regional prices can make it worthwhile to hold wells back, as the recent Permian Resources gas recovery also illustrates.
The split is a separate next step
The planned separation, announced October 14, would leave National Fuel with its regulated utility, pipeline and storage businesses. The production and gathering company is expected to be named Seneca Resources.
National Fuel targets the second half of calendar 2027, subject to financing, regulatory filings and final board approval. Its current earnings forecast includes the production business for the full fiscal year ending September 30, 2027.
Investors therefore have two developments to follow: whether the enlarged regulated operations deliver the forecast profit growth, and how gas prices and well performance shape the business scheduled to become Seneca. The new earnings range combines both until the businesses start reporting separately.