Core Viewpoint - The utility sector is poised for significant growth due to a surge in electricity demand driven by advancements in artificial intelligence, data centers, and electric vehicles, with a projected increase in demand of 55% over the next 20 years compared to just 9% from 2000 to 2020 [3][4]. Industry Trends - Electricity demand grew by 9% from 2000 to 2020, but is expected to grow by 55% over the next two decades [3]. - The demand for electricity from AI and data centers is projected to increase by 300% in the next decade, while electric vehicles are expected to drive a staggering 9,000% increase in electricity demand by 2050 [4]. - By the middle of the century, electricity is projected to account for 32% of final energy demand, up from 21% [4]. Investment Opportunities - Vanguard Utilities Index Fund ETF (VPU) offers diversified exposure to the utility sector with a yield of approximately 2.8% [6]. - NextEra Energy (NEE) has a strong growth platform with a 10% annualized dividend increase over the past decade and a yield of around 3.2% [7][8]. - The Southern Company (SO) has recently started two nuclear reactors, enhancing its clean energy supply and yielding 3.2% [9]. - Duke Energy (DUK) focuses on regulated utility customer bases, with a dividend yield of about 3.5% [10]. - Dominion Energy (D) has a higher yield of 4.7% but has faced challenges with a dividend cut [11]. - Black Hills Corporation (BKH) has achieved Dividend King status with a yield of 4.8% and a growing customer base [12]. - Constellation Energy (CEG) operates the largest nuclear power fleet in the U.S. but has a lower yield of 0.5% [13]. - Brookfield Renewable offers a diversified clean energy investment with yields of 5.8% for the partnership class and 4.5% for the corporate class [14][15]. - Portland General Electric (POR) has a yield of 5.1% and operates in a region with potential for data centers despite wildfire risks [17]. - Eversource Energy (ES) focuses on regulated utility assets with a yield of approximately 4.7% [18]. Long-term Outlook - The trends driving electricity demand are expected to unfold over decades, presenting opportunities for long-term investors to build wealth as the demand growth story develops [19].

Group 1 - Zacks Premium offers various tools for investors, including daily updates on Zacks Rank and Industry Rank, access to the Zacks 1 Rank List, Equity Research reports, and Premium stock screens to enhance investment confidence [1][2] - The Zacks Style Scores are designed to help investors select stocks with the highest potential to outperform the market within 30 days, rated from A to F based on value, growth, and momentum characteristics [2][3] Group 2 - The Value Score focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, and Price/Sales to highlight attractive investment opportunities [3] - The Growth Score assesses a company's financial health and future outlook by analyzing projected and historical earnings, sales, and cash flow to find stocks with sustainable growth potential [4] - The Momentum Score identifies optimal times to invest based on price trends and earnings estimate changes, emphasizing the importance of market trends [5] Group 3 - The VGM Score combines all three Style Scores, providing a comprehensive indicator that evaluates stocks based on value, growth, and momentum, assisting in narrowing down investment choices [6] - The Zacks Rank utilizes earnings estimate revisions to help investors build successful portfolios, with 1 (Strong Buy) stocks achieving an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [7][8] Group 4 - Eversource Energy, trading under the ticker symbol "ES," operates in the energy delivery sector, providing electricity and natural gas to customers in Connecticut, New Hampshire, and Massachusetts [12] - Eversource Energy holds a 3 (Hold) Zacks Rank with a VGM Score of B, indicating potential for growth, with a forecasted year-over-year earnings growth of 3.5% for the current fiscal year [13][14]

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Core Insights - Eversource Energy is making significant capital investments to enhance its transmission and distribution infrastructure, which will improve service reliability and support its renewable operations [1][2] Group 1: Capital Investments - The company plans to invest $24.2 billion from 2025 to 2029, with approximately $16.2 billion allocated for electric and natural gas distribution networks and $6.8 billion for electric transmission [3][8] - Specific investments include nearly $2 billion for replacing aging infrastructure, $1.5 billion for the cable underground program, $1 billion for substation development, and $0.5 billion for clean energy initiatives through 2028 [3][8] - Eversource is leading energy transition efforts in New England, with nearly $2 billion in transmission and distribution investments in Massachusetts aimed at achieving clean energy goals [4] Group 2: Operational Challenges - The company relies on third-party suppliers for certain business functions, which poses risks if these parties underperform, potentially impacting the company's reputation and operational results [5] - Eversource's operations are subject to various federal, state, and local regulations, including environmental laws related to greenhouse gas emissions and pollution, which could affect financial performance if regulations change [6] Group 3: Stock Performance - Over the past three months, Eversource's stock has increased by 10.1%, outperforming the industry average growth of 7.2% [7]

Group 1 - Eversource Energy (NYSE: ES) is projected to experience a 2% increase in electricity generation in 2025 and a 1% increase in 2026, indicating a positive outlook for the company [1] - The average electricity consumption is expected to increase, which may benefit Eversource Energy's operations and revenue [1] Group 2 - The analyst emphasizes a unique investment approach called "First Principles," which focuses on breaking down complex problems to uncover overlooked investment opportunities [1] - The analyst has a strong background in investment, private equity, and venture capital, with a proven track record of delivering strong returns [1] - Articles on Seeking Alpha highlight emerging technologies, sustainable investing, and the intersection of innovation and finance, reflecting a commitment to driving positive change [1]

Financial Performance - Eversource earned $550.8 million, or $1.50 per share, in Q1 2025, compared to $521.8 million, or $1.49 per share, in Q1 2024, reflecting a slight increase in earnings per share [185]. - The company reaffirmed its 2025 earnings guidance range of $4.67 to $4.82 per share and projected a long-term EPS growth rate of 5% to 7% through 2029, using 2024 non-GAAP EPS of $4.57 as the base year [185]. - Eversource reported operating revenues of $4,118.4 million for Q1 2025, an increase of $785.8 million (23.6%) compared to $3,332.6 million in Q1 2024 [243]. - Net income attributable to common shareholders for Q1 2025 was $550.8 million, a rise of $29.0 million (5.6%) compared to $521.8 million in Q1 2024 [243]. - Operating income increased to $926.4 million in Q1 2025, reflecting an increase of $80.4 million (9.5%) from $846.0 million in Q1 2024 [243]. Cash Flow and Debt Management - Cash flows from operating activities totaled $1.04 billion in Q1 2025, significantly higher than $291.3 million in Q1 2024 [185]. - Eversource issued $1.20 billion of new long-term debt in Q1 2025 and repaid $300 million of long-term debt [185]. - As of March 31, 2025, Eversource Parent's commercial paper borrowings outstanding were $1,381.6 million, down from $1,538.0 million as of December 31, 2024, with available borrowing capacity increasing to $618.4 million from $462.0 million [200]. - Eversource's cash and cash equivalents increased to $111.4 million as of March 31, 2025, compared to $26.7 million as of December 31, 2024 [197]. Investments and Capital Expenditures - Eversource's total investments in property, plant, and equipment were $1.01 billion in Q1 2025, down from $1.15 billion in Q1 2024 [185]. - Eversource's total capital expenditures in Q1 2025 were $1.04 billion, slightly down from $1.09 billion in Q1 2024, with investments primarily focused on infrastructure improvements [213]. - The Greater Cambridge Energy Program, with a total project cost of approximately $1.84 billion, aims to enhance the resiliency of the transmission system and is expected to be completed by 2031 [215]. Segment Performance - The regulated companies segment reported net income of $609.8 million, or $1.66 per share, in Q1 2025, up from $540.8 million, or $1.53 per share, in Q1 2024 [187]. - The electric distribution segment's earnings increased by $20.3 million in Q1 2025, primarily due to higher revenues from base distribution rate increases [188]. - The natural gas distribution segment's earnings rose by $27.8 million in Q1 2025, driven by higher revenues from base distribution rate increases effective November 1, 2024 [190]. Regulatory and Compliance - Eversource has recorded a reserve of $39.1 million for the second complaint period as of March 31, 2025, reflecting the difference between billed rates and the established base ROE of 10.57% [222]. - 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 [233]. - The company continues to monitor regulatory developments, particularly regarding performance-based regulation (PBR) in Connecticut, with final decisions expected in 2025 [237]. - Eversource cannot predict the ultimate outcome of pending matters before FERC, which could materially impact its financial condition and results of operations [235]. Revenue and Sales Volumes - Total sales volumes for electric distribution increased by 3.5% to 12,972 GWh, while firm natural gas sales volumes increased by 11.0% to 68,286 MMcf [244]. - Electric distribution revenues increased by $35.5 million primarily due to a temporary base distribution rate increase at PSNH effective August 1, 2024 [255]. - Natural gas distribution revenues increased by $55.7 million due to base distribution rate increases effective November 1, 2024 at EGMA and NSTAR Gas [255]. - Electric transmission revenues increased by $40.0 million for the three-month period due to a higher transmission rate base from continued investment in infrastructure [259]. Operating Expenses - Total operating expenses for Q1 2025 were $3,192.0 million, up $705.4 million (28.4%) from $2,486.6 million in Q1 2024 [243]. - Eversource's operating expenses included $1,340.3 million for purchased power, natural gas, and transmission, which increased by $104.3 million (8.5%) from the previous year [243]. - Operations and maintenance expenses increased by $24.5 million for the three-month period, driven by higher uncollectible expenses [265]. - Interest expense decreased to $50.0 million from $54.8 million, primarily due to lower long-term debt costs [272]. Dividend and Shareholder Returns - In Q1 2025, Eversource paid cash dividends totaling $270.2 million, compared to $244.8 million in Q1 2024, reflecting a year-over-year increase in shareholder returns [208].

Core Insights - Eversource Energy (ES) reported first-quarter 2025 adjusted earnings of $1.50 per share, matching the Zacks Consensus Estimate, with a slight increase of 0.7% from the previous year's $1.49 [1] - Total revenues reached $4.12 billion, exceeding the Zacks Consensus Estimate of $3.65 billion by 12.7%, and reflecting a year-over-year increase of 23.7% from $3.33 billion [1] Financial Performance - Total operating expenses were $3.19 billion, up 28.1% year over year, driven by higher costs in purchased power, natural gas, transmission, operations, maintenance, and depreciation [2] - Operating income was reported at $926.4 million, an increase of 9.5% year over year [2] - Interest expenses rose to $300.8 million, marking a 20% increase compared to the prior year [2] Segment Performance - Electric Transmission segment earnings totaled $199.4 million, up 12.8% year over year, attributed to increased investment in the transmission system [3] - Electric Distribution segment earnings were $188.4 million, up 12.1% year over year, due to higher revenues from base distribution rate increases in New Hampshire and Massachusetts [3] - Natural Gas Distribution reported earnings of $218.4 million, an increase from $190.6 million in the previous year [4] - Water Distribution earnings decreased to $3.6 million from $5.4 million in the year-ago quarter [4] - The Eversource Parent & Other Companies segment reported a loss of $59 million, wider than the previous year's loss of $19 million, primarily due to higher interest expenses [5] Guidance and Future Outlook - Eversource Energy expects 2025 earnings in the range of $4.67-$4.82 per share, with the Zacks Consensus Estimate at $4.73 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] - Planned capital investments are projected to be nearly $24.2 billion for the period 2025-2029 [6] Zacks Rank - Eversource Energy currently holds a Zacks Rank 3 (Hold) [7]

Financial Data and Key Metrics Changes - The company reported GAAP and recurring earnings of $1.5 per share for the first quarter, compared to $1.49 per share in the previous year, indicating a slight increase in earnings [18] - Higher utility earnings were largely offset by a decrease in parent and other earnings, with the natural gas segment showing improved results due to higher revenues from infrastructure investments [19][20] Business Line Data and Key Metrics Changes - Electric transmission earnings increased by $0.04 per share due to increased revenues from system investments, while electric distribution earnings rose by $0.03 per share from grid modernization and rate increases in New Hampshire and Massachusetts [19] - The natural gas segment's earnings improved by $0.06 per share, primarily due to higher revenues from infrastructure investments and base distribution rate increases [19] Market Data and Key Metrics Changes - The company is projecting an 8% growth in rate base over the next five years, with a strategic shift towards higher distribution spending in Massachusetts to meet electrification goals [8][9] - The company is examining opportunities related to ISO New England's new RFP for transmission operators to address future load growth [9] Company Strategy and Development Direction - The company aims to leverage its strengths in transmission and distribution investment opportunities, reaffirming its 2025 EPS guidance and long-term EPS growth rate of 5% to 7% through 2029 [6][17] - The company is focused on customer innovation and affordability, investing in advanced technologies to enhance reliability and efficiency [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to continue driving value for customers and shareholders, emphasizing a commitment to financial strength and sustainability [16][17] - The company is actively working with regulators and communities to address affordability and transparency in energy bills, particularly in response to high gas bills [12][13] Other Important Information - The company is divesting Aquarion Water, which is expected to close by the end of the year, and anticipates improvements in its FFO to debt ratio as a result [14][27] - The company has a five-year capital plan of $24.2 billion, reflecting a 10% increase over the last plan, with significant investments in transmission and distribution infrastructure [23][24] Q&A Session Summary Question: Tariff exposure related to offshore projects - Management confirmed that all necessary equipment has been procured for the offshore project, with no anticipated challenges related to tariffs [33][34] Question: Regulatory approval timeline for Aquarion divestment - Management expects the transaction to close in 2025, with a straightforward regulatory approval process anticipated [40][41] Question: Impact of securitization on equity needs - Management indicated that if securitization occurs, it would revisit its equity needs, but did not assume it in the current financing strategy [48][49] Question: Updates on AMI process - Management is seeking clarity on the recovery of expenditures related to the AMI program and is committed to spending as directed by Connecticut [51] Question: Thoughts on PURA composition and timing - Management is eager for a stable regulatory environment but could not predict the timing of filling the remaining seats on PURA [56][57] Question: FFO to debt improvement expectations - Management expects significant improvement in FFO to debt metrics, driven by enhanced cash flows from operations [60][61] Question: Upcoming Millstone recontracting rates - Management noted that it is too early to determine the impact of the Millstone contract, which is up in 2029 [72][73] Question: GSEP rule changes impact - Management stated that the recent GSEP decision would not have a major impact on their operations and they are supportive of exploring non-pipe alternatives [81][82] Question: Completion percentage of the Revolution project - Management did not provide a specific percentage of project completion but confirmed that construction is progressing well [83] Question: Regulatory under recoveries and future expectations - Management highlighted the RAM docket as significant for recovery, with timely adjustments expected in Massachusetts and New Hampshire [89][90]

Financial Data and Key Metrics Changes - The company reported GAAP and recurring earnings of $1.5 per share for the first quarter, compared to $1.49 per share in the previous year, indicating a slight increase in earnings [16] - Higher utility earnings were largely offset by a decrease in parent and other earnings, with electric transmission earnings increasing by $0.04 per share due to increased revenues from system investments [17] - The natural gas segment saw improved results of $0.06 per share, primarily due to higher revenues from infrastructure investments [17] Business Line Data and Key Metrics Changes - Electric distribution earnings increased by $0.03 per share, benefiting from grid modernization and rate mechanisms in New Hampshire and Massachusetts [17] - Water earnings remained comparable year over year, as the first quarter is typically a low usage period [18] - Parent losses increased by $0.12 per share in 2025, primarily due to higher interest expenses and the absence of capitalized interest from the offshore wind investment [18] Market Data and Key Metrics Changes - The company is projecting an 8% rate base growth over the next five years, with a strategic shift towards higher distribution spending in Massachusetts to meet electrification goals [6] - The company is examining numerous opportunities related to the ISO New England's new RFP for transmission operators to address future load growth [7] Company Strategy and Development Direction - The company aims to leverage its strengths in transmission and distribution investment opportunities, reaffirming its 2025 EPS guidance and long-term EPS growth rate of 5% to 7% through 2029 [5] - The company is focused on customer innovation and affordability, investing in advanced technologies to enhance reliability and efficiency [8] - The divestment of Aquarion Water is a key strategic initiative expected to close by the end of the year, which will improve the company's FFO to debt ratio [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to drive value for customers and shareholders, emphasizing a commitment to sustained growth and strategic vision [14] - The management highlighted ongoing efforts to address affordability and stabilize rates in response to high gas bills due to increased demand [10] - The company is optimistic about its future growth opportunities, particularly in transmission and distribution, as well as customer-focused investments [28] Other Important Information - The company is actively working with state leaders to develop long-term solutions for rate stability and transparency [11] - The company has made significant progress in its AMI project, with 40% of the communication network deployment completed [9] - The company expects to see a 6% reduction in average residential customer rates in Connecticut due to the implementation of an annual rate adjustment mechanism [20] Q&A Session Summary Question: Tariff exposure related to offshore projects - Management confirmed that all necessary equipment has been procured and does not anticipate significant challenges related to tariffs for the Revolution project [32][34] Question: Regulatory approval timeline for Aquarion - Management expects the transaction to close in 2025, with no anticipated issues in the regulatory approval process [39][41] Question: Impact of securitization on equity needs - Management indicated that if securitization occurs, they would revisit their equity needs [46] Question: Update on AMI process - Management is seeking clarity on the recovery of expenditures related to the AMI process [47] Question: PURA composition and timing for certainty - Management expressed eagerness for a stable regulatory climate but could not predict the timing for filling the PURA seats [52] Question: FFO to debt improvement expectations - Management expects significant improvement in FFO to debt metrics due to enhanced cash flows from operations [60] Question: Millstone recontracting rates - Management noted that it is too early to determine the impact of the Millstone contract, which is up in 2029 [68] Question: GSEP rule changes impact - Management stated that the GSEP filing's impact is manageable and they continue to support safe and reliable gas services [76] Question: Completion percentage of the Revolution project - Management did not provide a specific percentage but confirmed that construction is progressing well [78]

EVERSOURCE ENERGY Q1 2025 EARNINGS REPORT May 2, 2025 EVERSOURCE ENERGY Q1 2025 EARNINGS REPORT EVERSOURCE ENERGY Q1 2025 EARNINGS REPORT Safe Harbor Statement All per-share amounts in this presentation are reported on a diluted basis. The only common equity securities that are publicly traded are common shares of Eversource Energy. The first quarters 2025 and 2024 earnings discussion includes a financial measure, EPS by business, that is not recognized under generally accepted accounting principles (non-GA ...