Financial Data and Key Metrics Changes - The company reported adjusted earnings per share (EPS) of $0.82 for Q3 2025, and $4.06 year-to-date, representing an 8% increase compared to the same period last year [7] - Year-to-date, the company achieved double-digit growth in adjusted gross margin, operating income, and adjusted net income relative to the same period in 2024 [8] - Adjusted gross margin for Q3 2025 was approximately $137 million, up 12%, while adjusted net income was approximately $20 million, up 8% from Q3 2024 [25][28] Business Line Data and Key Metrics Changes - The regulated segment's adjusted gross margin was approximately $115 million in Q3 2025, up 12% from the same quarter last year, driven by organic natural gas transmission expansions and increased rates [27] - The unregulated energy segment saw adjusted gross margin increase by 13% to approximately $22.5 million, supported by growth in the Marlin Gas Services business [28] Market Data and Key Metrics Changes - Both core service areas experienced above-average residential customer growth: 4.3% in Delmarva, 3.9% for Florida Public Utilities, and 2.1% for Florida City Gas [10] - The company is expanding natural gas distribution in southern Delaware, targeting 2,000 new homes, and has become the natural gas provider for a new community development in Port St. Lucie, Florida [10][11] Company Strategy and Development Direction - The company is focused on three pillars of growth: prudently deploying capital, proactively managing regulatory agendas, and transforming business operations to enhance safety and customer service [12] - The capital investment program is on track, with over 400 gas distribution projects placed in service in the first nine months of the year, generating significant gross margin [12][13] Management's Comments on Operating Environment and Future Outlook - Management reaffirmed full-year 2025 EPS guidance of $6.15-$6.35 per share, contingent on a successful outcome from the Florida City Gas depreciation study [9] - The company is committed to increasing shareholder value and maintaining top quartile growth and total shareholder return [12][33] Other Important Information - The company has increased its 2025 full-year capital expenditure guidance to $425-$450 million, reflecting a $25 million increase over the previous range [10][13] - The company has received several recognitions, including being named a champion of board diversity and employer champion of the year for Kent County [22][23] Q&A Session Summary Question: Clarification on the outcome of the depreciation study - Management indicated that achieving the guidance range assumes a successful outcome from the depreciation study, with the timing of the decision impacting the final results [35][36] Question: Inquiry about the number of distribution projects - Management confirmed that 400 new distribution projects were completed in the last nine months, reflecting significant growth in both residential and transmission projects [46][47] Question: Discussion on Ohio data center growth - Management elaborated on a project with American Electric Power to build a pipeline for a data center, highlighting the favorable regulatory climate and in-state gas supplies [50][51] Question: Clarification on retroactive treatment of depreciation reserve - Management confirmed that an order received by early February could allow for retroactive treatment of the depreciation reserve, impacting 2025 earnings [54][55] Question: Future capital expenditure plans - Management stated that the long-term capital expenditure target of $1.5 billion-$1.8 billion through 2028 is expected to be maintained, with updates provided in February [58][59] Question: Growth trajectory in Delmarva vs. Florida - Management expressed optimism about continued strong growth in Delmarva, noting it is currently outpacing Florida, while also acknowledging robust growth in Florida [60][62]

Financial Performance - Adjusted Gross Margin increased to $137.2 million, up 12% from $122 million in Q3 2024[13, 20] - Adjusted Net Income rose to $19.5 million, an 8% increase compared to $18.1 million in Q3 2024[20, 69] - Adjusted EPS reached $0.82, a 3% increase from $0.80 in Q3 2024[20, 69] - Year-to-date Adjusted Gross Margin was $462.4 million, up 12% from YTD 2024[21] - Year-to-date Adjusted EPS was $4.06, up 8% from YTD 2024[16, 21] Capital Investment and Guidance - Capital investment increased by 27% to $123 million, from $97 million in Q3 2024[13] - The company is increasing its 2025 capital expenditure guidance to $425 - $450 million[14, 25] - The company reaffirmed its 2025 EPS guidance of $6.15 - $6.35, representing growth of 14% - 18%[14, 23, 26] Growth and Expansion - Customer growth increased by 3.2% in average natural gas residential customers[13] - The company has identified approximately $1.4 billion of capital projects supporting its 5-year CapEx guidance of $1.5 - $1.8 billion[49] - $200 million of long-term debt was issued in Q3 2025 to maintain balance sheet strength and flexibility[14, 91]

Core Insights - Chesapeake Utilities reported quarterly earnings of $0.82 per share, missing the Zacks Consensus Estimate of $0.90 per share, but showing an increase from $0.80 per share a year ago, resulting in an earnings surprise of -8.89% [1] - The company achieved revenues of $179.6 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 4.48% and up from $160.14 million year-over-year [2] - Chesapeake Utilities has surpassed consensus revenue estimates four times over the last four quarters, although it has only exceeded EPS estimates once in the same period [2] Future Outlook - The immediate price movement of Chesapeake Utilities' stock will largely depend on management's commentary during the earnings call and the sustainability of earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $2.09 on revenues of $245.3 million, and for the current fiscal year, it is $6.14 on revenues of $915.6 million [7] - The Zacks Rank for Chesapeake Utilities is currently 4 (Sell), indicating expectations of underperformance in the near future [6] Industry Context - The Utility - Gas Distribution industry, to which Chesapeake Utilities belongs, is currently in the top 30% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - For the three months ended September 30, 2025, the total operating revenues were $179.6 million, with regulated energy contributing $146.4 million and unregulated energy contributing $40.7 million[153]. - For the nine months ended September 30, 2025, total operating revenues were $671.1 million, an increase from $572.2 million in the same period of 2024, representing a growth of 17.3%[156]. - Revenue for the quarter ended September 30, 2025, was $146.4 million, an increase of $15.8 million, or 12.1%, from $130.6 million in the same quarter of 2024[210]. - For the nine months ended September 30, 2025, revenue was $195.3 million, up $35.2 million from $160.1 million in the same period of 2024[234]. Adjusted Metrics - The Adjusted Gross Margin for the same period was $137.2 million, compared to a Gross Margin (GAAP) of $91.8 million[153]. - Adjusted net income for the nine months ended September 30, 2025, was $94.9 million, compared to $84.2 million for the same period in 2024, reflecting an increase of 12.7%[163]. - Adjusted gross margin for the quarter ended September 30, 2025, increased by $12.5 million, or 12.2%, compared to the same period in 2024, reaching $114.7 million[210]. - Adjusted gross margin for the nine months ended September 30, 2025, was $101.9 million, reflecting a $12.7 million increase compared to $89.2 million in the prior year[234]. Operating Income - Operating income for the third quarter of 2025 was $45.0 million, an increase of $4.1 million or 10% compared to the same period in 2024[164]. - Operating income for the nine months ended September 30, 2025, was $182.1 million, an increase of $20.8 million compared to the same period in 2024[169]. - Operating income for the nine months ended September 30, 2025, was $20.9 million, an increase of $2.2 million from $18.7 million in the same period of 2024[234]. Margins and Contributions - The total adjusted gross margin for the three months ended September 30, 2025, was $137.2 million, an increase of $15.2 million or 12.5% compared to the same period in 2024[166]. - The increase in adjusted gross margin in the third quarter of 2025 was driven by regulatory initiatives, infrastructure programs, and increased demand for CNG, RNG, and LNG services[164]. - Natural gas transmission service expansions contributed $11.7 million to adjusted gross margins for the nine months ended September 30, 2025[173]. - Contributions from regulated infrastructure programs added $3.9 million to adjusted gross margin in the third quarter of 2025[213]. Customer Growth and Consumption - The average number of residential customers served on the Delmarva Peninsula increased by approximately 4.3% for the three months ended September 30, 2025[208]. - Total customer growth for the three months ended September 30, 2025, was $1.4 million, with residential customer growth contributing $1.2 million and commercial and industrial customers contributing $0.2 million[209]. - Increased customer consumption due to colder weather conditions resulted in a $4.8 million increase in adjusted gross margin for the nine months ended September 30, 2025[205]. Capital Expenditures and Financing - Capital expenditures for the nine months ended September 30, 2025, totaled $335.6 million, with a forecasted range for total capital expenditures in 2025 between $425.0 million and $450.0 million[249][250]. - The company entered into a Note Purchase Agreement for the issuance of Senior Notes totaling $200.0 million, with an initial funding of $150.0 million in August 2025 and an additional $50.0 million in September 2025, at an average interest rate of 5.04%[261]. - The company issued 5.20% Senior Notes due in November 2029 in the aggregate principal amount of $100.0 million, with proceeds used to reduce short-term borrowings and fund capital expenditures[262]. Regulatory and Rate Changes - The Maryland natural gas distribution businesses filed for a rate increase of approximately $6.9 million, with a cumulative increase of $3.5 million approved[200][203]. - The Delaware natural gas division filed for a rate increase of approximately $12.1 million, with an annual revenue increase of $6.1 million approved in June 2025[202][203]. - The Florida Electric division's rate case resulted in a total revenue increase of approximately $8.6 million annually, with $2.4 million incremental adjusted gross margin generated for the three months ended September 30, 2025[204]. Sustainability and Growth Strategy - The company’s growth strategy includes investments in renewable natural gas-related projects and expansion of Marlin Gas Services' CNG transport business[145]. - The focus on sustainability is supported by the Board of Directors and includes environmental stewardship initiatives[147]. - The company is committed to enhancing sustainability disclosures, with the first sustainability micro-report launched in 2024[150]. Interest and Debt Management - Interest charges for the nine months ended September 30, 2025, were $54.1 million, an increase of $3.2 million from $50.9 million in 2024[171]. - The company is required to maintain a funded indebtedness ratio of no greater than 65% under its financial covenants, and as of September 30, 2025, it was in compliance with this covenant[259]. Inflation and Risk Management - Inflation impacts the costs of supply, labor, and services, prompting the company to seek rate increases from regulatory commissions to mitigate these effects[284]. - The Risk Management Committee evaluates credit risks related to counterparties in commodity derivative contracts before approval[283].

Financial Performance - Net income for Q3 2025 was $19.4 million ($0.82 per share), up from $17.5 million ($0.78 per share) in Q3 2024, reflecting a 10.9% increase in net income year-over-year[3]. - Adjusted net income for the first nine months of 2025 was $94.9 million ($4.06 per share), compared to $84.2 million ($3.76 per share) in the prior-year period, resulting in an 8.0% growth in adjusted EPS[5]. - The company reported a 10.1% growth in net income and a 10.9% growth in adjusted EPS for the first nine months of 2025 compared to the prior-year period[5]. - Adjusted net income for Q3 2025 was $19.5 million, up from $18.1 million in Q3 2024, representing a 7.7% increase[36]. - Adjusted earnings per share (EPS) for Q3 2025 increased to $0.82 from $0.80 in Q3 2024, reflecting a 2.5% growth[36]. - For the nine months ended September 30, 2025, adjusted net income was $94.9 million, compared to $84.2 million for the same period in 2024, marking a 12.8% increase[37]. - Net income for the nine months ended September 30, 2025, was $94.2 million, up 15.0% from $81.9 million in the same period of 2024[64]. Revenue and Margin Growth - Adjusted gross margin increased by $15.2 million for Q3 2025 and $49.3 million for the nine-month period, driven by organic growth in natural gas distribution and infrastructure programs[6]. - The company generated over $20 million of gross margin from transmission, infrastructure, and transportation projects during Q3 2025[9]. - Adjusted gross margin for Q3 2025 was $137.2 million, an increase of $15.2 million or 12.5% compared to Q3 2024[19]. - For the nine months ended September 30, 2025, adjusted gross margin reached $462.4 million, up $49.3 million or 11.9% from $413.1 million in 2024[25]. - The total adjusted gross margin for nine months ended September 30, 2025, was $130.1 million, up from $115.2 million in 2024, indicating a 12.9% growth[37]. - Increased contributions from regulated infrastructure programs added $11.0 million to adjusted gross margins for the nine months ended September 30, 2025[37]. Operating Income and Expenses - Operating income for Q3 2025 was $45.0 million, reflecting a $4.1 million increase or 10.0% from the same period in 2024[19]. - Operating income for the nine months ended September 30, 2025, was $182.1 million, an increase of $20.8 million or 12.9% compared to the same period in 2024[25]. - The company experienced higher operating expenses due to increased depreciation and the absence of RSAM adjustments, which had previously provided benefits of $8.9 million in 2024[26]. - Total operating expenses for Q3 2025 were $134.6 million, up from $119.3 million in Q3 2024, marking a 12.5% increase[64]. - Operating expenses increased by $30.1 million for the nine months ended September 30, 2025, primarily due to depreciation and maintenance costs[37]. Capital Expenditures and Guidance - Capital guidance for 2025 has been increased to a range of $425 million to $450 million, reflecting ongoing investments in infrastructure and projects[10]. - The company continues to affirm its 2028 EPS guidance range of $7.75 to $8.00 per share, along with a capital expenditure guidance of $1.5 billion to $1.8 billion for the five-year period ending 2028[11]. - The Company's capital expenditures for the nine months ended September 30, 2025, were $335.6 million, with a forecasted range for 2025 capital expenditures between $425 million and $450 million[60]. Customer Growth and Consumption - The average number of residential customers served on the Delmarva Peninsula increased by approximately 4.3% for the nine months ended September 30, 2025[58]. - Average Residential Customers for Delmarva NG grew to 106,028 in Q3 2025 from 101,635 in Q3 2024, an increase of 4.0%[71]. - Average Commercial and Industrial Customers for Florida Natural increased to 8,445 in Q3 2025 from 8,322 in Q3 2024, showing a growth of 1.5%[71]. - Increased customer consumption due to colder weather conditions resulted in a $4.8 million increase in adjusted gross margin for the nine months ended September 30, 2025[54]. Regulatory and Project Updates - The company has ongoing regulatory initiatives expected to contribute $56.0 million to adjusted gross margins in 2026[40]. - The Maryland natural gas distribution businesses achieved a cumulative increase of $3.5 million in annual base rates following a settlement approved in April 2025[48]. - The Delaware natural gas division filed for a permanent rate relief of approximately $12.1 million, with annualized interim rates of $2.5 million approved in October 2024[51]. - The Florida Electric division's general base rate increase of $12.6 million was settled for a total revenue increase of approximately $8.6 million annually, effective July 2025[52]. - Major projects, including pipeline expansions, are expected to generate an estimated $46.1 million in adjusted gross margin in 2026[40]. - The Worcester Resiliency Upgrade project is projected to generate $10.2 million in adjusted gross margin in 2026 and $17.6 million in 2027[42]. - The East Coast Reinforcement Projects in Boynton Beach and New Smyrna Beach will provide an additional 15,000 Dts/day and 3,400 Dts/day of supply, respectively[43]. - Peninsula Pipeline's projects in Central Florida will add 5,000 Dts/day and 8,700 Dts/day to FPU's distribution system, with completion expected in 2024 and 2025 respectively[44]. - The renewable natural gas projects in Florida are projected to enhance FCG's gas supply and system reliability, with completion expected in the first half of 2026[45]. Equity and Debt Position - The company's equity to total capitalization ratio was approximately 49% as of September 30, 2025, as it aims to return to a target ratio of 50-60%[61]. - Stockholders' equity rose to $1,518.7 million as of September 30, 2025, up from $1,390.2 million at the end of 2024, indicating a 9.2% increase[67]. - Long-term debt (net of current maturities) increased to $1,437.9 million as of September 30, 2025, compared to $1,261.7 million at the end of 2024, reflecting a 14.0% increase[67].

Core Insights - Chesapeake Utilities Corporation reported a net income of $19.4 million ($0.82 per share) for Q3 2025, an increase from $17.5 million ($0.78 per share) in Q3 2024, with adjusted net income at $19.5 million ($0.82 per share) compared to $18.1 million ($0.80 per share) in the prior year [2][4][17] - For the first nine months of 2025, net income reached $94.2 million ($4.03 per share), up from $81.9 million ($3.66 per share) in the same period of 2024, with adjusted net income at $94.9 million ($4.06 per share) compared to $84.2 million ($3.76 per share) [4][26] - The company reaffirmed its 2025 EPS guidance range of $6.15 to $6.35 per share and increased its capital guidance range to $425 million to $450 million [8][9] Financial Performance - Adjusted gross margin for Q3 2025 increased by $15.2 million (12.5%) to $137.2 million compared to Q3 2024, driven by natural gas transmission service expansions, regulatory initiatives, and increased CNG, RNG, and LNG services [17][20] - Operating income for Q3 2025 was $45.0 million, a 10.0% increase from $40.9 million in Q3 2024, with adjusted operating income also reflecting growth [18][26] - Year-to-date adjusted gross margin for 2025 was $462.4 million, an increase of $49.3 million (11.9%) from $413.1 million in 2024 [25][31] Growth Initiatives - The company invested $123 million in capital during Q3 2025, generating over $20 million in gross margin from transmission, infrastructure, and transportation projects [7][6] - Chesapeake Utilities completed its Delaware rate case, resulting in tariff-related changes and rate design adjustments [7] - The company is focusing on a multi-year Enterprise Resource Plan (ERP) process to drive business transformation and growth [7] Segment Performance - The regulated energy segment's adjusted gross margin for Q3 2025 was $114.7 million, up from $102.2 million in Q3 2024, reflecting a 12.2% increase [19] - The unregulated energy segment's adjusted gross margin for Q3 2025 was $22.4 million, a 13.1% increase from $19.8 million in Q3 2024, driven by increased CNG, RNG, and LNG services [22][31] - For the nine months ended September 30, 2025, the regulated energy segment's adjusted gross margin was $360.5 million, up from $324.0 million in 2024, while the unregulated segment's adjusted gross margin increased to $101.9 million from $89.2 million [27][31]

Core Viewpoint - Chesapeake Utilities (CPK) is expected to report a year-over-year increase in earnings and revenues for the quarter ended September 2025, with a consensus outlook indicating potential stock price movements based on actual results compared to estimates [1][2]. Earnings Expectations - The consensus estimate for quarterly earnings is $0.90 per share, reflecting a year-over-year increase of +12.5% [3]. - Expected revenues are projected at $171.9 million, which is a 7.3% increase from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 3.98% higher in the last 30 days, indicating a reassessment by analysts [4]. - Chesapeake Utilities has an Earnings ESP of 0%, suggesting no recent differing analyst views from the consensus estimate [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict deviations from consensus estimates, but the predictive power is significant primarily for positive readings [9][10]. - Chesapeake Utilities currently holds a Zacks Rank of 4, which complicates the prediction of an earnings beat [12][13]. Historical Performance - In the last reported quarter, Chesapeake Utilities had an earnings surprise of +4.00%, with actual earnings of $1.04 per share against an expected $1.00 [14]. - Over the past four quarters, the company has beaten consensus EPS estimates two times [15]. Industry Context - Another company in the utility sector, Northwest Natural (NWN), is expected to report a loss of $0.82 per share, indicating a year-over-year change of -15.5% [19]. - Northwest Natural's revenues are expected to be $170.28 million, up 24.4% from the previous year, but it has an Earnings ESP of -6.10% [20].

Core Viewpoint - Chesapeake Utilities Corporation will host a conference call on November 7, 2025, to discuss its financial results for the third quarter and nine months ended September 30, 2025, with the earnings press release issued on November 6, 2025, after market close [1]. Group 1: Conference Call Details - The conference call will take place at 8:30 a.m. ET on November 7, 2025 [1]. - Investors can listen to the call via live webcast, with a registration link provided for participation [2]. - Dial-in information for the question and answer portion includes a toll-free number (800-579-2543) and an international number (785-424-1789) with Conference ID CPKQ325 [2]. Group 2: Company Overview - Chesapeake Utilities Corporation is a diversified energy delivery company listed on the New York Stock Exchange (NYSE: CPK) [3]. - The company offers sustainable energy solutions through various services, including natural gas transmission and distribution, electricity generation and distribution, propane gas distribution, and mobile compressed natural gas utility services [3].

Core Points - Chesapeake Utilities Corporation and its subsidiary Sharp Energy have been recognized as "Stars of Delaware" for the sixth consecutive year, with Chesapeake Utilities named Best Natural Gas/Energy Provider and Sharp Energy awarded Best Propane Company [1][2]. Company Overview - Chesapeake Utilities has over 100 years of experience in providing safe and reliable natural gas service across Delaware and Maryland, operating nearly 2,100 miles of distribution mains and serving more than 110,000 customers [3][7]. - Sharp Energy, a subsidiary of Chesapeake Utilities, has a strong reputation for customer satisfaction, delivering propane to approximately 90,000 customers and maintaining nearly nine million gallons of propane storage [4][8]. Industry Recognition - The Stars of Delaware awards are based on over 44,000 votes from Daily State News readers, highlighting businesses that Delaware residents trust [2]. - The awards were celebrated at a community event in Dover, Delaware, showcasing the importance of local businesses in the community [5].

Core Insights - Chesapeake Utilities Corporation appointed Lisa Eden to its Board of Directors effective September 15, 2025, bringing extensive energy industry experience from her previous role as senior vice president and CFO at TXNM Energy, Inc. [1][2] Group 1: Board Appointment - Lisa Eden's appointment is expected to enhance the Board's collective expertise, particularly in financial acumen and energy sector insights, which will support Chesapeake Utilities' strategic oversight [2][3] - Ms. Eden has over two decades of experience in various executive roles at TXNM Energy, including vice president and treasurer, and has developed expertise in corporate finance, capital markets, and strategic planning [2][3] Group 2: Company Strategy and Vision - Ms. Eden expressed enthusiasm about contributing to Chesapeake Utilities, highlighting the company's strong performance history and commitment to community service [3] - The Board, including chair Jeff Householder, emphasized that Ms. Eden's extensive experience will strengthen the company's ability to deliver energy solutions and drive long-term value for stakeholders [3] Group 3: Company Overview - Chesapeake Utilities Corporation is a diversified energy delivery company listed on the NYSE (CPK), offering sustainable energy solutions through various services including natural gas transmission and distribution, electricity generation, and propane gas distribution [4]