Financial Data and Key Metrics Changes - The company reported adjusted earnings per share (EPS) of $2.22, a 6% increase from Q1 2024 [8] - Adjusted gross margin for Q1 2025 was approximately $182 million, up 11% from Q1 2024 [25] - Adjusted net income increased by 9% to approximately $51 million for the quarter [25] Business Line Data and Key Metrics Changes - Regulated segment adjusted gross margin was approximately $128 million, an 8% increase from the previous year [28] - Unregulated energy segment adjusted gross margin rose 18% to approximately $54 million [28] Market Data and Key Metrics Changes - Delmarva customer growth was up nearly 4%, while Florida saw a 3% increase compared to the same period last year [10] - Increased demand for natural gas was noted across service areas, driven by population growth and new residential communities [10] Company Strategy and Development Direction - The growth strategy focuses on three pillars: prudent capital deployment, proactive regulatory management, and continuous business transformation [11] - The company plans to invest between $325 million and $375 million in capital growth for 2025, with $113 million already invested in Q1 [9][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting the full-year 2025 adjusted EPS guidance of $6.15 to $6.35, despite the delay in the WRU project [33][76] - The company remains optimistic about its capital program and the demand for gas, indicating no significant impacts from the broader economic environment [76] Other Important Information - The company received a $20 million increase in capital investment for the WRU project, raising the total expected cost to approximately $100 million [16] - The Board approved an $8 increase in the annualized dividend, reflecting a 7% growth [32] Q&A Session Summary Question: Any updates on natural gas infrastructure for the space industry in Florida? - Management reported no substantive updates but mentioned ongoing interest and potential for liquefied natural gas to support space launch facilities [38][39] Question: Is there any expansion planned for Marlin? - Management indicated ongoing capital investment in Marlin but no large-scale expansion announcements at this time [40][41] Question: Thoughts on tariffs and their impact on the business? - Management noted minimal issues related to tariffs so far but acknowledged potential cost increases for specific projects like WRU due to market uncertainties [47][48] Question: How will the delay in WRU affect margins? - Management stated they can manage the $3 million margin drop from WRU and have operational capabilities to provide peaking services temporarily [51][52] Question: Concerns about foreign tourism or housing starts affecting business? - Management has not seen significant impacts on tourism but noted a strong backlog of contracted housing starts [55][56] Question: Will the company revert to a normal seasonality pattern in 2027? - Management believes that seasonality will return to a more typical pattern in 2027, influenced by regulatory activity and capital projects [57] Question: What are the thresholds for potential credit rating downgrades? - Management indicated that a downgrade could be considered around a 4.8 FFO to debt ratio, with upgrades around 3.8 [65][66]

Financial Data and Key Metrics Changes - Adjusted earnings per share for Q1 2025 was $2.22, a 6% increase from Q1 2024 [7] - Adjusted gross margin for Q1 2025 was approximately $182 million, up 11% from Q1 2024 [22] - Adjusted net income for Q1 2025 was approximately $51 million, a 9% increase from the previous year [22] Business Line Data and Key Metrics Changes - Regulated segment adjusted gross margin was approximately $128 million, an 8% increase from the previous year [25] - Unregulated energy segment adjusted gross margin increased by 18% to approximately $54 million in Q1 2025 [26] - The Marlin Gas Services business contributed $3.6 million of additional gross margin in Q1 2025 [26] Market Data and Key Metrics Changes - Delmarva customer growth was up nearly 4% and Florida customer growth increased by 3% compared to the same period last year [8] - Increased demand for natural gas was noted across service areas, driven by population growth and new residential communities [8] Company Strategy and Development Direction - The company focuses on three pillars for growth: capital deployment for customer demand, proactive regulatory management, and continuous business transformation [9] - A five-year capital investment plan of $1.5 billion to $1.8 billion has been initiated, with $356 million invested in 2024 and $113 million in Q1 2025 [15] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about achieving the full year 2025 adjusted EPS guidance of $6.15 to $6.35 despite the delay in the WRU project [30] - The company is monitoring macroeconomic impacts but has not seen significant adverse effects on its operations [72] Other Important Information - The company received a $20 million increase in capital investment for the WRU project, raising total expected costs to approximately $100 million [14] - An $8 increase in the annualized dividend was approved, reflecting a 7% growth [29] Q&A Session Summary Question: Any updates on natural gas infrastructure for the space industry in Florida? - Management reported no substantive updates but mentioned ongoing interest and a $6.5 million grant for infrastructure expansion in Virginia [37][38] Question: Thoughts on tariffs and their impact on the business? - Management indicated minimal issues related to tariffs but acknowledged some cost increases for specific projects due to market uncertainty [43][45] Question: How will the company manage the margin loss from the WRU project delay? - Management expressed confidence in managing the margin loss through operational capabilities and ongoing projects [48][50] Question: Concerns regarding foreign tourism or housing starts affecting business? - Management noted no significant impacts on tourism and a strong backlog of contracted housing starts, although multifamily markets in Florida face challenges [52][53] Question: Will the company revert to a normal seasonality pattern in 2027? - Management believes that seasonality will return to a more typical pattern, influenced by regulatory activity and capital projects [54]

Financial Performance - The company's Adjusted Gross Margin for Q1 2025 was $182.4 million, an increase of 11% compared to $164.5 million in Q1 2024 [19] - Adjusted Net Income for Q1 2025 reached $51.1 million, a 9% increase from $46.8 million in Q1 2024 [19] - Adjusted Earnings Per Share (EPS) for Q1 2025 was $2.22, up 6% from $2.10 in Q1 2024 [19] - The company reaffirmed its FY 2025 Adjusted EPS guidance of $6.15 - $6.35 per share and FY 2028 Adjusted EPS guidance of $7.75 - $8.00 per share [19] Growth and Capital Expenditure - The company's YTD 2025 Capital Expenditures amounted to $113 million, with a 2025 Capital Expenditure Guidance of $325 - $375 million [19] - The company's 2024-2028 5-Year Capital Expenditure Guidance is $1.5 - $1.8 billion [19] - Approved Transmission Expansions represent a capital investment of approximately $317 million, with an expected Adjusted Gross Margin of $22.1 million in 2025 and $42.3 million in 2026 [28] Operational Growth - Natural gas customer growth in Delmarva saw an average residential increase of 4% and a commercial & industrial increase of 1.5% in Q1 2025 compared to Q1 2024 [21] - Florida experienced natural gas customer growth with an average residential increase of 3% and a commercial & industrial increase of 1.7% in Q1 2025 compared to Q1 2024 [21] Rate Case Progress - The Maryland rate case resulted in a $3.5 million final base rate increase approved in March 2025 [38] - The Delaware rate case is expected to have a final order in Q2 2025, with approved cumulative interim rate relief of $6.1 million, effective May 1, 2025 [38]

Core Insights - Chesapeake Utilities reported quarterly earnings of $2.22 per share, missing the Zacks Consensus Estimate of $2.28 per share, but showing an increase from $2.10 per share a year ago, resulting in an earnings surprise of -2.63% [1] - The company posted revenues of $298.7 million for the quarter, exceeding the Zacks Consensus Estimate by 12.42%, and up from $245.74 million year-over-year [2] - Chesapeake Utilities has surpassed consensus revenue estimates two times over the last four quarters, while it has only surpassed EPS estimates once [2] Earnings Outlook - The sustainability of the stock's price movement will depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $1.05 on revenues of $183.9 million, and for the current fiscal year, it is $6.27 on revenues of $851.1 million [7] Industry Context - The Utility - Gas Distribution industry, to which Chesapeake Utilities belongs, is currently ranked in the top 15% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5][6]

[PART I—FINANCIAL INFORMATION](index=7&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) [Financial Statements](index=7&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) Chesapeake Utilities reported Q1 2025 revenue of $298.7 million and net income of $50.9 million, with assets at $3.66 billion [Condensed Consolidated Statements of Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Q1 2025 vs Q1 2024 Income Statement Highlights | Metric | Q1 2025 (in millions) | Q1 2024 (in millions) | Change | | :--- | :--- | :--- | :--- | | **Total Operating Revenues** | $298.7 | $245.7 | +21.6% | | **Operating Income** | $86.8 | $79.6 | +9.0% | | **Net Income** | $50.9 | $46.2 | +10.2% | | **Diluted EPS** | $2.21 | $2.07 | +6.8% | [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Summary | Account | March 31, 2025 (in millions) | December 31, 2024 (in millions) | | :--- | :--- | :--- | | **Total Assets** | $3,664.6 | $3,577.0 | | Net property, plant and equipment | $2,828.2 | $2,735.9 | | Total current assets | $199.6 | $204.3 | | **Total Liabilities & Equity** | $3,664.6 | $3,577.0 | | Total stockholders' equity | $1,447.3 | $1,390.2 | | Long-term debt, net | $1,260.0 | $1,261.7 | | Short-term borrowing | $215.4 | $196.5 | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 vs Q1 2024 Cash Flow Summary | Activity | Q1 2025 (in millions) | Q1 2024 (in millions) | | :--- | :--- | :--- | | Net cash provided by operating activities | $85.0 | $97.3 | | Net cash used in investing activities | ($113.1) | ($74.7) | | Net cash provided by (used in) financing activities | $20.9 | ($25.8) | | **Net Decrease in Cash** | **($7.2)** | **($3.2)** | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - The company's business is seasonal, with revenues and earnings typically higher in the first and fourth quarters due to increased energy consumption for heating[32](index=32&type=chunk) - The company operates two reportable segments: Regulated Energy and Unregulated Energy. For Q1 2025, the Regulated Energy segment generated **$60.5 million** in operating income, while the Unregulated Energy segment generated **$26.3 million**[87](index=87&type=chunk)[85](index=85&type=chunk) - The company utilizes derivative instruments, including propane and interest rate swaps, to manage commodity price and interest rate risks. As of March 31, 2025, the company had cash flow hedges for **6.3 million gallons of propane** and interest rate swaps with a notional amount of **$100.0 million**[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) - As of March 31, 2025, the company had total long-term debt of **$1.286 billion** and short-term borrowings of **$215.4 million** under its **$450.0 million** revolving credit facility[123](index=123&type=chunk)[127](index=127&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=34&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management reported strong Q1 2025 net income of $50.9 million, driven by consumption and regulatory programs [Results of Operations](index=38&type=section&id=Results%20of%20Operations) Q1 2025 vs Q1 2024 Adjusted Results | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | **Adjusted Gross Margin** | $182.4M | $164.5M | +$17.9M | | **Operating Income** | $86.8M | $79.6M | +$7.2M | | **Adjusted Net Income (Non-GAAP)** | $51.1M | $46.8M | +$4.3M | | **Adjusted EPS - Diluted (Non-GAAP)** | $2.22 | $2.10 | +$0.12 | - Key drivers for the **$17.9 million** increase in Adjusted Gross Margin included higher customer consumption (**$5.5M**), increased demand for virtual pipeline services (**$3.6M**), contributions from regulated infrastructure programs (**$3.4M**), and organic natural gas growth (**$2.2M**)[158](index=158&type=chunk) - Operating expenses increased primarily due to higher depreciation and amortization (**$5.2M**) from growth projects and increased payroll and benefits expenses (**$4.5M**)[158](index=158&type=chunk) [Segment Analysis](index=47&type=section&id=Segment%20Analysis) - **Regulated Energy Segment:** Operating income increased by **$2.4 million (4.1%)** to **$60.5 million** in Q1 2025. Adjusted gross margin grew by **$9.6 million**, driven by regulated infrastructure programs (**$3.4M**), natural gas customer growth (**$2.2M**), and transmission service expansions (**$2.2M**)[191](index=191&type=chunk)[193](index=193&type=chunk) - **Unregulated Energy Segment:** Operating income improved by **$4.9 million** to **$26.3 million** in Q1 2025. The **$8.5 million** increase in adjusted gross margin was primarily due to higher propane customer consumption from colder weather (**$4.2M**) and increased demand for virtual pipeline services (**$3.6M**)[200](index=200&type=chunk)[201](index=201&type=chunk) [Major Projects and Initiatives](index=41&type=section&id=Major%20Projects%20and%20Initiatives) Estimated Annual Adjusted Gross Margin from Major Initiatives (in millions) | Initiative Category | 2025 Estimate | 2026 Estimate | | :--- | :--- | :--- | | Pipeline Expansions | $22.1 | $42.3 | | CNG/RNG/LNG Transportation | $20.0 | $20.7 | | Regulatory Initiatives | $40.8 | $56.0 | | **Total** | **$82.9** | **$119.0** | - The company is advancing numerous growth projects, including the Worcester Resiliency Upgrade, various Florida pipeline expansions (Wildlight, Newberry, East Coast Reinforcement), and Renewable Natural Gas (RNG) supply projects[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk) - Key regulatory initiatives driving growth include Florida's GUARD and FCG's SAFE infrastructure programs, Eastern Shore's Capital Cost Surcharge, and recent rate cases in Maryland, Delaware, and Florida[178](index=178&type=chunk)[179](index=179&type=chunk)[181](index=181&type=chunk)[183](index=183&type=chunk) [Financial Position, Liquidity and Capital Resources](index=50&type=section&id=Financial%20Position,%20Liquidity%20and%20Capital%20Resources) 2025 Forecasted Capital Expenditures | Segment | Low (in millions) | High (in millions) | | :--- | :--- | :--- | | Regulated Energy | $305.0 | $345.0 | | Unregulated Energy | $19.0 | $28.0 | | Other | $1.0 | $2.0 | | **Total** | **$325.0** | **$375.0** | - The company's equity to total capitalization ratio, including short-term debt, was **49%** as of March 31, 2025, slightly below its target range of **50% to 60%**[215](index=215&type=chunk) - As of March 31, 2025, the company had **$215.4 million** in short-term borrowings outstanding and **$227.0 million** of available credit under its **$450.0 million** revolving credit facility[220](index=220&type=chunk)[224](index=224&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company manages market risks from interest rates and commodity prices using hedging and recovery mechanisms - Interest rate risk is managed through debt refinancing decisions and the use of interest rate swap agreements to mitigate short-term borrowing rate fluctuations[238](index=238&type=chunk) - Regulated operations have limited commodity price risk due to PSC-authorized fuel cost recovery mechanisms[239](index=239&type=chunk) - Unregulated propane operations use storage (up to **8.5 million gallons**) and forward/hedging contracts to mitigate commodity price risk[240](index=240&type=chunk)[241](index=241&type=chunk) [Controls and Procedures](index=56&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls - Management's evaluation concluded that disclosure controls and procedures were effective as of March 31, 2025[249](index=249&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[250](index=250&type=chunk) [PART II—OTHER INFORMATION](index=56&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) [Legal Proceedings](index=56&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Routine legal and regulatory proceedings are not expected to materially impact the company's financial position or results - The company states that the ultimate outcome of its current legal and regulatory proceedings is not expected to have a material effect on its financial condition or results[251](index=251&type=chunk) [Risk Factors](index=56&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes to risk factors were reported, referring to the 2024 Annual Report on Form 10-K for details - The report does not introduce new risk factors and refers to the risk factors disclosed in the 2024 Annual Report on Form 10-K[252](index=252&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company purchased 607 common shares at $119.90 for a Rabbi Trust, not part of a public repurchase program Q1 2025 Share Repurchases | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Jan 1 - Jan 31, 2025 | 607 | $119.90 | | Feb 1 - Feb 28, 2025 | 0 | N/A | | Mar 1 - Mar 31, 2025 | 0 | N/A | | **Total** | **607** | **$119.90** | - The company does not have any publicly announced plans or programs to repurchase its shares[254](index=254&type=chunk) [Defaults Upon Senior Securities](index=57&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) The company reported no defaults on its senior securities during the period - None[255](index=255&type=chunk) [Other Information](index=57&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No director or officer adopted or terminated Rule 10b5-1 trading arrangements in Q1 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement in Q1 2025[256](index=256&type=chunk) [Exhibits](index=58&type=section&id=ITEM%206.%20EXHIBITS) Exhibits include CEO and CFO certifications and XBRL data files filed with the Form 10-Q - The exhibits filed with this report include CEO and CFO certifications (31.1, 31.2, 32.1, 32.2) and various XBRL instance and taxonomy documents[257](index=257&type=chunk)

Core Viewpoint - Chesapeake Utilities Corporation reported strong financial results for the first quarter of 2025, with net income increasing to $50.9 million, reflecting a year-over-year growth driven by higher customer consumption and regulatory initiatives [2][11]. Financial Performance - Net income for Q1 2025 was $50.9 million ($2.21 per share), up from $46.2 million ($2.07 per share) in Q1 2024 [2][11]. - Adjusted net income, excluding acquisition-related expenses, was $51.1 million ($2.22 per share) compared to $46.8 million ($2.10 per share) in the prior year [2][11]. - Adjusted gross margin increased by $17.9 million, or 10.9%, driven by customer consumption, regulatory initiatives, and infrastructure programs [14][11]. Growth Drivers - The increase in adjusted earnings was largely attributed to colder temperatures in the Mid-Atlantic and Ohio service territories, which led to increased customer consumption [3][11]. - The company invested nearly $113 million in new transmission and reliability infrastructure projects during the first quarter [4][11]. - Chesapeake Utilities expects continued growth in adjusted EPS, reaffirming its guidance for 2025 EPS in the range of $6.15 to $6.35 per share and 2028 EPS in the range of $7.75 to $8.00 per share [5][6]. Capital Expenditures - The company maintains a five-year capital expenditure guidance of $1.5 billion to $1.8 billion, with projected capital expenditures for 2025 between $325 million and $375 million [6][44]. - Capital expenditures for Q1 2025 were reported at $112.9 million [43]. Regulatory Initiatives - Significant regulatory activities are underway, including rate cases in Maryland and Delaware, which are expected to enhance earnings in the future [11][34][36]. - The company is actively managing its regulatory agenda to drive value and support growth initiatives [4][11]. Customer Growth - The average number of residential customers served increased by approximately 4.0% in the Delmarva Peninsula and 3.0% in Florida for Q1 2025 [41][42]. - Increased demand for virtual pipeline services and organic growth in natural gas distribution contributed to the overall performance [3][11].

Core Viewpoint - Chesapeake Utilities Corporation has announced an increase in its quarterly cash dividend, reflecting a commitment to shareholder value and strategic growth [1][2]. Dividend Increase - The Board of Directors voted to raise the quarterly cash dividend from $0.64 to $0.685 per share, resulting in an annualized dividend increase from $2.56 to $2.74 per share, which is a 7 percent increase [1]. - The new dividend will be payable on July 7, 2025, to shareholders of record as of June 16, 2025 [1]. Strategic Focus - The decision to increase the dividend is part of the company's balanced approach to capital investment and sustained earnings growth, which supports ongoing dividend growth [2]. - The company emphasizes three strategic pillars: prudent capital deployment, proactive regulatory management, and continuous business transformation, which are expected to drive earnings growth and enhance shareholder value [2]. Dividend History - Chesapeake Utilities has a long-standing history of paying dividends without interruption for 64 years and has consistently increased its annualized dividend every year since 2004 [3]. Company Overview - Chesapeake Utilities Corporation is a diversified energy delivery company listed on the NYSE (CPK), providing sustainable energy solutions through various services including natural gas transmission and distribution, electricity generation, and propane gas distribution [4].

Chesapeake Utilities (CPK) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended March 2025. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The earnings report, which is expected to be released on May 7, 2025, might help the stock move higher if these key numbers are better tha ...

Group 1 - Chesapeake Utilities (CPK) is currently outperforming its peers in the Utilities sector, with a year-to-date return of approximately 8.9%, compared to the sector average of 5.2% [4] - The Zacks Rank for Chesapeake Utilities is 2 (Buy), indicating a positive earnings outlook and stronger analyst sentiment, as the consensus estimate for full-year earnings has increased by 0.3% over the past three months [3][4] - The Utilities group, which includes Chesapeake Utilities, is ranked 1 within the Zacks Sector Rank, reflecting the strength of this sector compared to others [2] Group 2 - Chesapeake Utilities belongs to the Utility - Gas Distribution industry, which is currently ranked 50 in the Zacks Industry Rank, while the average return for this group is a loss of 2.4% year-to-date, further highlighting CPK's strong performance [6] - Another notable stock in the Utilities sector is Energias de Portugal (EDPFY), which has achieved a year-to-date return of 19.4% and has a Zacks Rank of 1 (Strong Buy) [5] - The Utility - Electric Power industry, to which Energias de Portugal belongs, is ranked 40 and has seen an average return of +5.8% year-to-date [6]

Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the 'long' context, investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.Whil ...