Origin Energy Ltd (ASX: ORG) shares are on the move on Friday.

In morning trade, the energy retailer's shares are down 3.5% to $10.82.

This follows the release of its quarterly update from the three months ended 31 December 2024..

Origin Energy shares tumble on second quarter update

Origin's Australia Pacific LNG (APLNG) segment delivered a solid top line performance during the quarter, with revenue rising 3% from the prior quarter to $2.71 billion.

Management notes that this was driven by higher LNG volumes and prices, partially offset by lower short-term domestic volumes.

Production in the December quarter came in slightly lower than the prior quarter. As a result, management has downgraded its FY 2025 production guidance for APLNG to 670–690 petajoules (PJ). This is down 2% to 3% from its previous forecast of 685–710 PJ.

The company advised that this reflects lower-than-expected benefits from well optimisation efforts at Condabri, Talinga, and Orana, as well as reduced performance from non-operated assets and unplanned maintenance.

Offsetting some of this disappointing news was a stellar earnings performance for the first half. Management revealed that Origin LNG trading EBITDA increased 270% to $285 million in the first half. This puts the company in a great position to at least achieve its FY 2025 guidance of $400 million to $450 million for this segment.

Energy Markets

Origin revealed that electricity sales volumes were steady year-on-year, with customer growth and warm weather balancing out lower usage due to increased solar uptake and energy efficiency measures.

Gas volumes declined 9% compared to the December 2023 quarter, with retail volumes down 5% due to weather impacts. This was partially offset by an expanding customer base. Business gas volumes fell 11%, reflecting contract expirations and weaker short-term trading sales.

Looking ahead, Origin has already locked in approximately 55% of its anticipated FY 2026 coal volumes through contracts or hedging arrangements. Pleasingly, pricing is largely in line with FY 2025 levels.

In addition, the company approved the third stage of the Eraring battery project. This latest expansion adds 700 megawatt-hours (MWh) to the first stage currently under construction. Once complete, the Eraring battery will boast a total storage capacity of 700 megawatts (MW) and 2,800 MWh.

Octopus Energy

Finally, the Octopus Energy business continued its strong growth trajectory during the quarter. The UK-based energy retailer added over 680,000 customer accounts, bringing its total UK customer base to 7.3 million. Internationally, Octopus Energy now serves more than 1.8 million customers.

Its Kraken technology platform also expanded its reach, with global customer accounts contracted to the system hitting 62 million.

As a result, Kraken remains on track to achieve its goal of 100 million contracted accounts by 2027.

Management commentary

Commenting on the quarterly performance, Origin CEO Frank Calabria highlighted the company's operational resilience and strategic progress. He said:

Australia Pacific LNG delivered strong revenue for the quarter driven by higher LNG volumes and prices, however, production slightly declined as we achieved lower-than-expected benefits from well optimisation activities at some fields, and output was also lower at some non-operated assets.

And speaking about the rapid growth of Octopus Energy, Calabria adds:

Octopus Energy's rapid growth continues, adding significant UK and international retail customers in the quarter, including a record number of organic customers in December. Octopus Energy is now the largest energy retailer in the UK, and its Kraken platform is cementing its place as the technology of choice for utilities globally.