Core Viewpoint - Eversource Energy's shares declined over 10% following the rejection of its proposal to sell its water utility business by Connecticut regulators, marking a significant setback for the company's strategic efforts to streamline operations [1] Group 1: Company Impact - The rejection of the sale proposal has negatively impacted Eversource Energy's stock performance, leading to a drop of over 10% in share value [1] - This decision by regulators represents a challenge to Eversource's plans to divest non-core assets and focus on its primary utility operations [1] Group 2: Regulatory Environment - Connecticut regulators' decision highlights the scrutiny that utility companies face regarding asset sales and operational restructuring [1] - The regulatory landscape may pose additional challenges for Eversource Energy as it seeks to implement its strategic initiatives [1]

Core Viewpoint - Eversource Energy's proposed $2.4 billion sale of its Aquarion Water subsidiary has been denied by Connecticut's Public Utilities Regulatory Authority, leading to a 7.7% drop in the company's stock in early trading [2] Group 1 - The Connecticut Public Utilities Regulatory Authority voted against Eversource Energy's application for the sale [2] - The proposed sale was valued at $2.4 billion [2] - The sale was intended to transfer Aquarion Water to a newly created quasi-public entity [2]

Eversource Energy’s request to sell subsidiary Aquarion Water Company was rejected by Connecticut regulators after pushback from state officials concerned about consumer costs. https://t.co/uAgAFEEEPL ...

Summary of Key Points from the Conference Call Industry Overview - The focus on AI investments has overshadowed other potential investment opportunities in various sectors, including semiconductors, power plants, and capital goods [1][2] - Companies not directly benefiting from AI are highlighted as compelling investment options, such as Freeport-McMoRan, which has indirect exposure to AI [1] Core Insights and Arguments - A screening of Buy-rated US stocks not included in AI/power/infrastructure ETFs identified 82 stocks with positive 3-month EPS revisions and trading below a market multiple of 26x, leading to a final list of 16 equities [2] - Savita Subramanian models an 8% return for the S&P over the next 12 months, emphasizing the importance of owning average stocks rather than the index [3] - Risks associated with AI investments include potential declines in middle-income white-collar jobs, which could impair consumer spending [3] - Hyperscalers investing heavily in AI technology may face de-rating if monetization does not meet expectations, as they currently trade at high multiples despite capital-intensive spending [3] Notable Companies and Their Performance - **Amcor PLC (AMCR)**: Recent acquisition of Berry Global is expected to enhance valuation, with EBITDA projected to approach $3.8 billion for F26 [11][12] - **AT&T Inc. (T)**: Strong performance metrics with 405k post-paid phone net additions, projecting a 9% EPS growth in 2026 [15][17] - **BGC Group**: Dominates the energy derivatives market, with expected growth in volumes due to increased power consumption driven by cloud and AI adoption [18][19] - **Church & Dwight (CHD)**: Positioned to benefit from consumer trade-down trends, with organic sales growth of 3.4% in Q3 [20][21] - **Dollar General (DG)**: Improved execution and a focus on lower price points are expected to boost sales, with a current valuation below the 5-year average [23][27] - **Freeport-McMoRan (FCX)**: Anticipates a restart of the Grasberg mine, with bullish forecasts for copper prices due to supply challenges [32][34] - **Henry Schein (HSIC)**: Transitioning to a higher-margin business model, with a target of 60% operating income from high-growth products by 2027 [38][39] - **Progressive Corp (PGR)**: Strong EPS revisions and expected dividend announcements are anticipated to drive growth [65][67] - **Walt Disney Co. (DIS)**: Growth drivers intact with expectations for double-digit growth in Entertainment operating income [80] Additional Important Insights - The market is currently cautious, providing room for multiple expansions as fundamentals improve across various sectors [14] - Regulatory improvements in Connecticut are expected to enhance Eversource's valuation [28][30] - Viking Holdings is positioned for premium valuation due to its unique brand and superior margins in the cruise industry [76][79] - The overall sentiment indicates a potential for significant investment opportunities outside the AI sector, as companies adapt to changing market dynamics and consumer behaviors [1][2][3]

Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgency to invest now [1][13] - The energy demands of AI technologies are highlighted, with data centers consuming as much energy as small cities, leading to concerns about power grid strain and rising electricity prices [2][3] Investment Opportunity - A specific company is positioned as a critical player in the AI energy sector, owning essential energy infrastructure assets that will benefit from the anticipated surge in energy demand from AI data centers [3][7] - This company is not a chipmaker or cloud platform but is described as a "toll booth" operator in the AI energy boom, collecting fees from energy exports and benefiting from the onshoring trend driven by tariffs [5][6] Financial Position - The company is noted for being debt-free and holding a significant cash reserve, amounting to nearly one-third of its market capitalization, which positions it favorably compared to other energy firms burdened with debt [8][10] - It also has a substantial equity stake in another AI-related company, providing investors with indirect exposure to multiple growth engines without the associated premium costs [9][10] Market Trends - The article discusses the broader trends of AI infrastructure supercycles, the onshoring boom due to tariffs, and a surge in U.S. LNG exports, all of which the company is strategically aligned with [14] - The influx of talent into the AI sector is expected to drive continuous innovation and advancements, reinforcing the importance of investing in AI-related companies [12] Conclusion - The company is presented as an undervalued investment opportunity with the potential for significant returns, as it is trading at less than seven times earnings, making it an attractive option for investors looking to capitalize on the AI and energy sectors [10][11]

Financial Performance - Eversource Energy reported earnings of $367.5 million, or $0.99 per share, in Q3 2025, compared to a loss of $118.1 million, or $0.33 per share, in Q3 2024[209]. - For the first nine months of 2025, Eversource earned $1.27 billion, or $3.44 per share, up from $739.1 million, or $2.08 per share, in the same period of 2024[209]. - Eversource's operating revenues for Q3 2025 were $3,220.6 million, an increase of 5.1% from $3,063.2 million in Q3 2024[319]. - For the nine months ended September 30, 2025, operating revenues reached $10,177.0 million, up 14.0% from $8,929.3 million in the same period of 2024[319]. - Net income attributable to common shareholders for Q3 2025 was $367.5 million, compared to a net loss of $118.1 million in Q3 2024, marking a significant turnaround[319]. Cash Flow and Debt Management - Cash flows from operating activities totaled $3.20 billion in the first nine months of 2025, compared to $1.52 billion in the same period of 2024[209]. - As of September 30, 2025, cash and cash equivalents stood at $259.3 million, significantly up from $26.7 million as of December 31, 2024[209]. - Eversource issued $2.04 billion in new long-term debt and repaid $750 million of long-term debt in the first nine months of 2025[209]. - Eversource paid cash dividends totaling $816.4 million in the first nine months of 2025, compared to $745.2 million in the same period of 2024[247]. - Eversource's interest expense for Q3 2025 was $318.1 million, an increase of 5.8% from $300.6 million in Q3 2024[319]. Segment Performance - Electric distribution segment earnings increased by $18.1 million (8.9%) in Q3 2025 and $50.3 million (9.6%) in the first nine months of 2025 compared to the same periods in 2024, driven by higher revenues from base distribution rate increases[213]. - Electric transmission segment earnings rose by $10.6 million (5.7%) in Q3 2025 and $52.4 million (9.7%) in the first nine months of 2025, primarily due to a higher transmission rate base from ongoing infrastructure investments[216]. - Natural gas distribution segment losses decreased by $13.4 million (44.4%) in Q3 2025 and earnings increased by $49.5 million (26.4%) in the first nine months of 2025, attributed to higher revenues from base distribution rate increases[217]. - Water distribution segment earnings decreased by $4.8 million (20.2%) in Q3 2025 and $0.3 million (0.8%) in the first nine months of 2025, mainly due to higher operations and maintenance expenses[218]. Regulatory and Rate Changes - The authorized net regulatory ROE for Yankee Gas was established at 9.32% with a 53% common equity ratio, while PSNH's regulatory ROE was set at 9.5% with a 50% common equity ratio[214]. - PURA approved a distribution rate increase of $82.2 million for Yankee Gas, effective November 1, 2025, resulting in a total distribution revenue requirement of $802.2 million[290]. - NSTAR Electric submitted a PBR Adjustment filing for a $55.1 million increase to base distribution rates, with a total revenue requirement of $1.34 billion effective January 1, 2026[295]. - PSNH's permanent rate increase was approved at $100.7 million, effective August 1, 2025, with a total revenue requirement of $519 million[300]. Capital Expenditures and Investments - Investments in property, plant, and equipment were $3.18 billion in the first nine months of 2025, slightly down from $3.29 billion in the same period of 2024[209]. - Capital expenditures for Eversource, CL&P, NSTAR Electric, and PSNH totaled $3.18 billion in the first nine months of 2025, with a focus on infrastructure improvements[250]. - Eversource's distribution capital expenditures totaled $2.36 billion in the first nine months of 2025, compared to $2.19 billion in the same period of 2024[258]. Business Transactions and Future Outlook - Eversource entered into a definitive agreement to sell the Aquarion water distribution business for an aggregate enterprise value of approximately $2.4 billion, including $1.6 billion for equity and $800 million of net debt to be extinguished at closing[261]. - The sale of the Aquarion business is expected to close in late 2025, with net proceeds planned to be used to pay down Eversource parent debt[261]. - Eversource expects future operating cash flows and access to debt and equity markets to be sufficient for working capital and capital investment opportunities[232]. Risks and Regulatory Matters - Eversource cannot predict the ultimate outcome of pending matters before FERC, which could materially impact its results of operations and financial condition[278]. - Eversource has recorded a reserve of $39.1 million for the second complaint period related to FERC ROE complaints, representing the difference between billed rates and a 10.57 percent base ROE[265]. - A change of 10 basis points to the base ROE would impact Eversource's after-tax earnings by approximately $3 million for each of the four 15-month complaint periods[276].

Core Insights - Eversource Energy (ES) reported third-quarter 2025 adjusted earnings of $1.19 per share, exceeding the Zacks Consensus Estimate of $1.12 by 6.3% and increasing 5.3% from $1.13 in the same quarter last year [1][8] - Total revenues reached $3.22 billion, falling short of the Zacks Consensus Estimate of $3.41 billion by 5.4%, but representing a 5.1% increase from $3.06 billion in the prior year [2][8] Financial Performance - Total operating expenses were $2.53 billion, up 3.3% year over year, driven by higher costs in purchased power, natural gas, transmission, operations, maintenance, and energy efficiency programs [3] - Operating income was $688.7 million, reflecting a 12.5% year-over-year increase [3] - Interest expenses rose to $318.1 million, a 5.8% increase compared to the previous year [3] Segment Performance - Electric Transmission segment earnings were $185.5 million, up 6.1% year over year, attributed to ongoing investments in the electric transmission system [4] - Electric Distribution segment earnings reached $221.6 million, an 8.9% increase year over year, due to higher revenues from base distribution rate increases in New Hampshire and Massachusetts [4] - Natural Gas Distribution reported a loss of $16.8 million, an improvement from a loss of $30.2 million in the prior year [5] - Water Distribution earnings were $18.9 million, down from $23.7 million in the year-ago quarter [5] - Eversource Parent & Other Companies reported earnings of $33.3 million, slightly down from $34 million in the previous year [5] Guidance - Eversource Energy narrowed its 2025 earnings guidance to a range of $4.72-$4.80 per share, compared to the previous range of $4.67-$4.82, with the Zacks Consensus Estimate at $4.75 per share [6] - The company anticipates a long-term EPS growth rate of 5% to 7% through 2029, using $4.57 (in 2024) as a base [6] Zacks Rank - Eversource Energy currently holds a Zacks Rank 3 (Hold) [7]

Financial Data and Key Metrics Changes - The company recognized a net after-tax non-recurring charge of $75 million, or $0.20 per share, related to offshore wind liability, which increased the estimated liability for future payments to GIP by approximately $285 million, offset by $210 million of tax benefits [16][17] - GAAP earnings for Q3 were $0.99 per share, compared to a loss of $0.33 per share in the same quarter last year, while non-GAAP recurring earnings were $1.19 per share, up from $1.13 per share year-over-year [17][18] Business Line Data and Key Metrics Changes - Electric transmission earnings increased by $0.01 per share due to higher revenues from continued investment in the transmission system [18] - Electric distribution earnings rose by $0.03 per share, reflecting distribution rate increases in New Hampshire and Massachusetts [18] - Natural gas segment earnings improved by $0.04 per share, primarily due to base distribution rate increases [18] - Water distribution earnings decreased by $0.02 per share due to higher O&M and depreciation expenses [19] Market Data and Key Metrics Changes - Year-to-date weather-normalized load growth was 2%, with a peak of over 12 gigawatts recorded this summer, the highest since 2013 [11] - The evolving electric demand landscape necessitates numerous transmission projects to improve regional reliability and address congestion [11] Company Strategy and Development Direction - The company is focused on executing key strategic initiatives to drive sustainable growth and strengthen its balance sheet [4] - There is a strong emphasis on infrastructure investments, with nearly $5 billion planned for the year [9] - The company is pursuing various transmission projects to support future growth, including the Cambridge Underground Substation [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the regulatory environment in Connecticut, highlighting opportunities for collaboration with the new PURA commissioners [5][7] - The company aims to deliver reliable, sustainable energy while maintaining affordability for customers through cost-effective investments and efficient operations [14] - The company reaffirmed its 2025 recurring earnings per share guidance to a range of $4.72-$4.80, with a long-term EPS growth rate of 5%-7% [25] Other Important Information - The company is on track to close the sale of Aquarion Water by the end of the year, with a final decision from PURA expected on November 19 [7][21] - The company has installed over 40,000 AMI meters in Massachusetts and completed the communication network deployment in the western portion of its service territory [10] Q&A Session Summary Question: Update on Yankee Gas and alternative resolution - Management indicated that the decision from PURA was better than the draft decision, and they will provide more information later [32] Question: NSTAR Gas PBR proposal denial - Management explained that the denial was due to a roll-in of GSEP and indicated plans to file a general rate case if necessary [35][36] Question: Regulatory updates and credit agency views - Management noted that credit agencies are in a wait-and-see mode regarding regulatory outcomes [42] Question: Land acquisition strategy - Management clarified that land acquisitions are for their own regulated business and strategic energy injection [60][61] Question: Timing for storm cost securitization resolution - Management expects a decision on storm cost securitization in the second or third quarter of the following year [72] Question: Completion of Revolution Wind project - Management reported significant progress, with 52 of 65 turbines installed and an improved project schedule [68] Question: Tax rate expectations - Management anticipates the tax rate to be in the low 20% for the current year, moving towards a more normal level in 2026 [92]

Financial Data and Key Metrics Changes - The company recognized a net after-tax non-recurring charge of $75 million, or $0.20 per share, related to offshore wind liability, which increased the estimated liability for future payments to GIP by approximately $285 million, offset by $210 million of tax benefits [16][17] - GAAP earnings for Q3 were $0.99 per share, compared to a loss of $0.33 per share in the same quarter last year, while non-GAAP recurring earnings were $1.19 per share, up from $1.13 per share year-over-year [17][18] Business Line Data and Key Metrics Changes - Electric transmission earnings increased by $0.01 per share due to higher revenues from continued investment in the transmission system [18] - Electric distribution earnings rose by $0.03 per share, reflecting distribution rate increases in New Hampshire and Massachusetts [18] - Natural gas segment earnings improved by $0.04 per share, primarily due to base distribution rate increases in Massachusetts [18] - Water distribution earnings decreased by $0.02 per share due to higher O&M and depreciation expenses [19] Market Data and Key Metrics Changes - Year-to-date weather-normalized load growth was reported at 2%, with a peak of over 12 gigawatts experienced this summer, the highest since 2013 [11] - The company is on track to invest nearly $5 billion in transmission and distribution infrastructure this year [9] Company Strategy and Development Direction - The company is focused on executing key strategic initiatives to drive sustainable growth and strengthen its balance sheet [4] - There is a strong emphasis on infrastructure investments to maintain a reliable and resilient grid, accommodating new sources of generation to meet increasing electric demand [6][10] - The company is pursuing numerous transmission projects to address evolving electric demand and improve regional reliability [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the constructive shift in Connecticut's regulatory landscape, which is expected to facilitate collaboration on regulatory initiatives [5][7] - The company aims to deliver reliable, sustainable energy while keeping costs manageable and partnering with customers to ensure affordability [14] - The company reaffirmed its 2025 recurring earnings per share guidance to a range of $4.72-$4.80, with a longer-term EPS growth rate of 5%-7% [25] Other Important Information - The company has made significant progress on the Revolution Wind project, with Ørsted reporting that 52 of the 65 turbines are installed [67] - The company is actively working on storm cost recovery, with 98% of deferred storm costs either under review or already in rates [24] Q&A Session Summary Question: Update on Yankee Gas and alternative resolution - Management indicated that the decision from PURA was better than the draft decision, and they will provide more information later [32][33] Question: NSTAR Gas PBR proposal denial - Management explained that the denial was due to a roll-in of GSEP and indicated plans to file a general rate case if necessary [36] Question: Regulatory updates and credit agency views - Management noted that credit agencies are in a wait-and-see mode regarding regulatory outcomes [42] Question: Land acquisition strategy - Management clarified that land acquisitions are for their own regulated business and strategic energy injection [60] Question: Timing for storm cost securitization resolution - Management expects a decision on storm cost securitization in the second or third quarter of the following year [71] Question: Tax rate expectations - Management anticipates the tax rate to be in the low 20% for the current year, moving towards a more normal level in 2026 [91] Question: Completion of Revolution Wind project - Management reported significant progress and expects to improve the project schedule [67] Question: End of the Revolution Wind project agreement with Ørsted - Management stated that the end of the agreement will be at the Commercial Operation Date (COD) [100]

Financial Data and Key Metrics Changes - The company recognized a net after-tax non-recurring charge of $75 million, or $0.20 per share, related to offshore wind liability, which increased the estimated liability for future payments to GIP by approximately $285 million, offset by $210 million of tax benefits [16][17] - GAAP earnings for Q3 2025 were $0.99 per share, compared to a loss of $0.33 per share in Q3 2024, while non-GAAP recurring earnings for Q3 2025 were $1.19 per share, up from $1.13 per share in the prior year [17] - The FFO to debt ratio was 12.7% as of Q2 2025, reflecting an improvement of over 300 basis points from December 2024, and is expected to exceed 13% for Q3 2025 [22][23] Business Line Data and Key Metrics Changes - Electric transmission earnings increased by $0.01 per share due to higher revenues from continued investment in the transmission system [18] - Electric distribution earnings rose by $0.03 per share, reflecting distribution rate increases in New Hampshire and Massachusetts [18] - Natural gas segment earnings improved by $0.04 per share, primarily due to base distribution rate increases in Massachusetts [18] - Water distribution earnings decreased by $0.02 per share due to higher O&M and depreciation expenses [19] Market Data and Key Metrics Changes - Year-to-date weather-normalized load growth was 2%, with a peak of over 12 gigawatts recorded this summer, the highest since 2013 [11] - The company is experiencing robust load growth driven by electrification of transportation and heating, decarbonization initiatives, and economic expansion across manufacturing and commercial sectors [10] Company Strategy and Development Direction - The company is focused on executing key strategic initiatives to drive sustainable growth and strengthen its balance sheet [4] - There is a strong emphasis on infrastructure investments, with nearly $5 billion planned for the year, and a five-year capital plan of $24.2 billion [9][21] - The company is pursuing numerous transmission projects to accommodate increasing electric demand and improve regional reliability [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the regulatory environment in Connecticut, highlighting opportunities for collaboration with the new PURA commissioners [5][6] - The company aims to deliver reliable, sustainable energy while maintaining affordability for customers through cost-effective investments and efficient operations [15] - Management reaffirmed a longer-term EPS growth rate of 5%-7% off the 2024 non-GAAP EPS base, driven by disciplined execution of the strategic plan [25] Other Important Information - The company has installed over 40,000 AMI meters in Massachusetts and completed the communication network deployment in the western portion of its service territory [10] - The company is expanding energy efficiency programs to provide incentives for residential and low-income customers [14] Q&A Session Summary Question: Update on Yankee Gas and alternative resolution - Management indicated that the decision from PURA was better than the draft decision, which is encouraging [26][27] Question: NSTAR Gas PBR proposal denial - The company filed a motion for reconsideration and intends to file a rate case due to the denial of the $160 million recovery proposal [28][29][30] Question: Regulatory environment and credit agency views - Credit agencies are in a wait-and-see mode regarding regulatory outcomes, focusing on collaborative efforts with the new commission [32] Question: Land acquisition strategy - The company is acquiring land for its regulated business to support energy injection and interconnections, not for data centers [34][35] Question: Revolution Wind project completion - The project is progressing well, with Ørsted reporting 85% completion, and the company expects to improve the project schedule [39] Question: Storm cost securitization timing - The company anticipates a decision on storm cost securitization in the second or third quarter of 2026 [40][41] Question: Tax rate expectations - The adjusted tax rate is expected to be in the low 20% range for this year, moving towards a more sustainable level in 2026 [46][47]