SGU Posts Narrower Y/Y Q4 Loss as Acquisitions & Margins Improve
Shares of Star Group, L.P. SGU have declined 1% since reporting earnings for the fourth quarter of fiscal 2025 compared with the S&P 500 index’s 0.5% fall during the same period. Over the past month, the stock has fallen 1% against the S&P 500’s 0.7% return.Earnings & Revenue PerformanceStar Group’s fourth-quarter and fiscal 2025 results showed a mix of solid volume gains, improved profitability and the ongoing impacts of acquisitions. Fiscal fourth-quarter revenues rose 3.1% year over year to $247.7 million, driven primarily by higher installations and services revenues.The net loss narrowed to $28.7 million from a $35.1 million loss a year earlier, aided by a favorable $12.2-million swing in the fair value of derivative instruments and a $3.8-million gain from real estate sales. Star Group reported a fourth-quarter fiscal 2025 loss of 84 cents per limited partner unit, improving from a $1 loss per unit in the prior-year quarter.For fiscal 2025, total revenues increased roughly 1% to $1.8 billion, while net income more than doubled to $73.5 million from $35.2 million in fiscal 2024, helped by a $32.4-million favorable change in the fair value of derivative instruments and a 22.2% increase in adjusted EBITDA to $136.4 million.Star Group, L.P. Price, Consensus and EPS Surprise Star Group, L.P. price-consensus-eps-surprise-chart | Star Group, L.P. QuoteOther Key Business MetricsThe company recorded significant volume growth during the quarter and fiscal 2025. Fourth-quarter home heating oil and propane volume rose 8.1% year over year to 20 million gallons, benefiting from acquisitions and other factors that offset net customer attrition. For the year, volumes increased 11.5% to 282.6 million gallons as colder temperatures and newly acquired businesses contributed meaningfully to demand.Product gross profit improved as well: quarterly product gross profit rose 6% to $45 million, and full-year product gross profit increased $57 million, or 12%, supported by higher margins and improved service and installation profitability.Expenses grew due to acquisition-related operating costs, higher depreciation and amortization and the impacts of weather hedge contracts. In the fiscal fourth quarter, operating expenses increased by $5 million, with $4.2 million tied to recent acquisitions; full-year delivery, branch and G&A expenses rose $36.6 million, including a $10.6-million change in weather hedge expenses and $23 million of acquisition-related costs.Management CommentaryManagement emphasized disciplined cost controls, successful integration of acquisitions, and continued investment in installations and services as key drivers of improved profitability. CEO Jeff Woosnam highlighted that despite temperatures being 8% warmer than normal, the company still achieved strong volume growth and increased adjusted EBITDA by $24.8 million year over year.Management also noted that internal customer satisfaction indicators are improving and loss rates are at historically low levels. However, fewer customer additions due to lower real estate activity remain challenging.CFO Rich Ambury added that acquisition-related operating costs, higher D&A and increased interest expenses shaped the quarter’s results. Nevertheless, the year’s gains in margins, volume and installation profitability more than offset these pressures.Factors Influencing Headline NumbersAcquisitions and colder weather were central to Star Group’s stronger annual performance. The company benefited from a 29-million-gallon increase in home heating oil and propane volume in fiscal 2025, driven by both newly acquired businesses and temperature trends. Management’s focus on disciplined margin management and service profitability also helped lift full-year gross profit.At the same time, weather hedge outcomes had a meaningful year-over-year impact. The company recorded $3.1 million in hedge expenses in fiscal 2025 compared with a $7.5 million credit in fiscal 2024, resulting in a $10.6-million unfavorable swing. Acquisition-related operating costs, higher depreciation and greater interest expenses also weighed on the results, though these were offset by gains in volume and margins.Other DevelopmentsStar Group completed four acquisitions in fiscal 2025, adding nearly 12 million gallons of annual heating oil and propane volume. Over the past two years, the company has acquired nine businesses in total, underscoring its ongoing consolidation strategy in regional home-heating markets. In fiscal 2025, Star Group invested approximately $81 million in acquisitions, repurchased $16 million in units and paid out $26 million in distributions, all framed by management as steps aimed at long-term value creation.Overall, Star Group delivered a year of meaningful operational progress supported by acquisitions, improved margins and strong cost discipline, even as customer gains and regulatory uncertainty remain watch points heading into fiscal 2026.Zacks Naming Top 10 Stocks for 2026Want to be tipped off early to our 10 top picks for the entirety of 2026? History suggests their performance could be sensational.From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2025, the Zacks Top 10 Stocks gained +2,530.8%, more than QUADRUPLING the S&P 500’s +570.3%.Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2026. Don’t miss your chance to get in on these stocks when they’re released on January 5. Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Star Group, L.P. (SGU): Get Free ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks
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