NYSE LISTED WTRG First Quarter 2025 May 12, 2025 February 2024 Brian Dingerdissen Vice President Treasury, FP&A and Investor Relations 2 Forward Looking Statement This presentation contains in addition to historical information, forward looking statements based on assumptions made by management regarding future circumstances over which the company may have little or no control, that involve risks, uncertainties and other factors that may cause actual results to be materially different from any future result ...

Essential Utilities (WTRG) came out with quarterly earnings of $1.03 per share, beating the Zacks Consensus Estimate of $0.80 per share. This compares to earnings of $0.73 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 28.75%. A quarter ago, it was expected that this water utility would post earnings of $0.66 per share when it actually produced earnings of $0.67, delivering a surprise of 1.52%.Over the last four quarters, the ...

Wall Street expects a year-over-year increase in earnings on higher revenues when Essential Utilities (WTRG) reports results for the quarter ended March 2025. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on May 1 ...

Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? Essential Utilities (WTRG) , which belongs to the Zacks Utility - Water Supply industry, could be a great candidate to consider.This water utility has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. The average surprise for the last two quarters was 5.11%.For the most recent quarter, Essential Util ...

Group 1 - Water utilities are considered appealing due to their defensiveness and long dividend track records amidst broader market volatility [1] - Despite a flat-to-negative performance over the past six months, there are specific companies within the water utility sector that exhibit growth potential [1] - Joseph Jones, a professor with extensive market research experience, emphasizes the importance of portfolio construction from a dividend growth investor's perspective [1]

It has been about a month since the last earnings report for Essential Utilities (WTRG) . Shares have added about 2.9% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Essential Utilities due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.How Have Estimates Been Moving ...

Group 1 - Essential Utilities (NYSE: WTRG) is a regulated water and natural gas utility serving over 5 million customers across multiple states [1] - The company is currently navigating significant regulatory changes due to the U.S. Environmental Protection Agency (EPA) setting maximum contaminant levels [1] Group 2 - Aseity Research focuses on high-yield income investing combined with tech-driven growth, providing actionable insights on stocks, ETFs, CEFs, and options strategies [1]

Customer Base and Revenue - Essential Utilities serves approximately 5.5 million people across multiple states, with Aqua Pennsylvania accounting for about 55% of operating revenues in 2024[14]. - The company reported consolidated operating revenues of $2,086,113,000 for the year ended December 31, 2024, with the Regulated Water segment contributing 58.6% and the Regulated Natural Gas segment contributing 40.4%[17]. - In 2024, residential water customers represented approximately 67% of total water and wastewater revenues, while residential gas customers accounted for 24.2% of natural gas revenues[19]. - The utility customer growth rate was 0.6% in 2024, with an increase of 11,845 customers, primarily due to acquisitions and organic growth[23]. - The company completed the sale of its regulated natural gas utility assets in West Virginia for approximately $39,965,000, representing about 2% of its regulated natural gas customers[16]. Investments and Capital Expenditures - Essential Utilities plans to invest approximately $7.8 billion from 2025 through 2029 to improve water and natural gas systems and meet compliance requirements[29]. - The company estimates capital expenditures of approximately $104 million, representing less than 3% of expected total water and wastewater capital expenditures over the next five years (2025-2029) to address environmental compliance issues[69]. - The company anticipates an investment of at least $450 million in capital expenditures to install additional treatment facilities to comply with the final National Primary Drinking Water Regulation (NPDWR) by 2029[72]. - The company has approximately $39 million budgeted for capital improvements related to dam safety between 2025 and 2029[78]. - The company has budgeted for ongoing infrastructure improvements to comply with environmental regulations, including those related to PFAS and lead pipe replacements[69][81]. Environmental and Regulatory Compliance - The company is committed to integrating environmental, health, and safety requirements into all operational activities, adhering to applicable regulatory standards[67]. - The company is actively involved in legal actions against PFAS manufacturers to ensure accountability for contamination of public water supply systems[75]. - The company is subject to stringent regulations under the Safe Drinking Water Act and the Clean Water Act, ensuring compliance with national quality standards for drinking water and wastewater discharges[68]. - The fair market value legislation in Pennsylvania encourages consolidation in the water and wastewater industry, providing municipalities with options for exiting the business[53]. - The company has a program to evaluate changes in water sources to prevent lead leaching, focusing on identifying and removing lead service lines[170]. Operational Efficiency and Challenges - The company aims to pursue acquisitions of government-owned and regulated water and wastewater systems to expand its customer base and service areas[24]. - The company completed 12 acquisitions of water or wastewater utilities or similar assets over the three-year period ending December 31, 2024[28]. - The integration of acquisitions is complex and may require significant management resources, potentially affecting operational efficiency[189]. - The company faces risks related to capital expenditures, which may be limited if sufficient capital cannot be obtained, potentially affecting earnings growth and compliance with regulations[178]. - The company relies on third-party suppliers for essential goods and services, and disruptions could harm operations and financial results[147]. Financial Performance and Risks - The company's aggregate long-term and short-term debt balance was $7,745,638,000 as of December 31, 2024[176]. - The company faces risks from general economic downturns, which may lead to declines in asset market values and increased cash contributions to pension plans[113]. - Inflation and higher interest rates have negatively impacted the company's financial condition, with operating and capital costs rising significantly[114]. - Regulatory lag in rate adjustments may prevent the company from recovering increased costs due to inflation, affecting profitability[115]. - The company may experience a reduction in discretionary water and natural gas usage by residential customers, particularly during peak seasons[116]. Sustainability and Emissions - In 2024, the company achieved a 25% reduction in Scope 1 and 2 greenhouse gas emissions from its 2019 baseline, with a target of 60% reduction by 2035[90]. - The company replaced 268 miles of gas pipeline in 2024 and over 930 miles since 2021, contributing to its emissions reduction efforts[90]. - The company began procuring nearly 100% renewable electricity for its water and wastewater operations in 2022, enhancing its sustainability efforts[90]. - The company has established a significant board-level oversight for climate-change matters, with quarterly discussions among senior leaders[91]. - The company is subject to risks related to climate change, which could lead to increased operational costs and affect financial performance[161]. Cybersecurity and Operational Risks - Cybersecurity threats pose risks to the company's information technology systems, which are essential for operations and customer service[125]. - The company has implemented a cybersecurity controls framework to mitigate risks, but vulnerabilities remain[128]. - The company maintains a cross-functional committee led by the Chief Information Officer to oversee cybersecurity risks and strategies[194]. - The company’s cybersecurity program is aligned with the NIST Cybersecurity Framework, incorporating best practices to protect against unauthorized access[191]. - The company may face challenges in maintaining adequate insurance coverage for potential cybersecurity incidents and other operational risks[127]. Shareholder Returns and Dividends - The company has paid dividends consecutively for 80 years, highlighting its commitment to shareholder returns[177]. - The company’s net property, plant, and equipment totaled $13,143,476,000 as of December 31, 2024, with Pennsylvania accounting for 70.8% of this total[198]. - In 2024, dividends paid represented 58.2% of net income[203]. - The company has paid dividends consecutively for 80 years, with a 6.0% increase in the quarterly dividend authorized on July 31, 2024, raising the annualized dividend rate to $1.302 per share[203].

Financial Data and Key Metrics Changes - For the year 2024, the company reported GAAP earnings per share (EPS) of $2.17, an increase from $1.86 in 2023, which includes a gain on sale from Pittsburgh Energy projects [12][39] - Non-GAAP earnings per share for 2024 were approximately $1.97, aligning with the guidance range of $1.96 to $2.00 [12][49] - Operating revenues increased due to rate increases and surcharges, with a total increase of nearly $83 million, primarily from water and gas [41][37] Business Line Data and Key Metrics Changes - The water segment saw an increase in revenue of approximately $51 million, while the gas segment contributed about $32 million to the revenue increase [41] - Operating expenses grew by only 2% year-over-year, reflecting the company's focus on operational efficiency [13][44] - The company completed its capital plan of $1.3 billion, which included significant investments in water quality and gas safety [13][20] Market Data and Key Metrics Changes - The company experienced a decline in natural gas commodity prices year-over-year, positively impacting customer bills [38] - Weather normalization mechanisms were implemented to alleviate revenue volatility due to extreme weather conditions [38][18] - The company reported that it was the strongest performing water stock in 2024, although it expressed disappointment in its overall valuation [27][28] Company Strategy and Development Direction - The company plans to invest nearly $7.8 billion in capital over the next five years, focusing on infrastructure improvements and operational excellence [25][61] - A key theme for 2025 is the adoption of lean practices to enhance operational efficiency [29] - The company is exploring opportunities related to data centers, which could provide growth in its natural gas service territory [32][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the regulatory environment in Pennsylvania, highlighting successful rate cases and a constructive regulatory reputation [16][19] - The company anticipates continued growth in its water customer base at an average annual rate of 2% to 3% due to consolidation opportunities [64] - Management noted that the volatility of earnings associated with unusual weather should be dramatically reduced due to the weather normalization mechanism [60] Other Important Information - The company has a strong pipeline of acquisition opportunities, with six signed asset purchase agreements adding over 210,000 customer equivalents [57][58] - The company is actively engaged in PFAS mitigation efforts, with a capital spend of approximately $450 million planned over four years [20][102] - The company plans to raise approximately $315 million in equity through its multiyear ATM program to support growth initiatives [65] Q&A Session Summary Question: Update on M&A activity and Delcora acquisition - Management indicated that the Delcora acquisition is not expected to close this year and has been taken out of the five-year plan, but they remain committed to it [71][72] Question: Consumer advocate situation in Pennsylvania - Management noted that the acting consumer advocate has similar powers to a confirmed advocate, and they are closely monitoring the timeline for a permanent nomination [80][82] Question: PFAS investment strategy and potential earnings - Management confirmed that the $450 million PFAS investment is expected to be net of proceeds from lawsuits and grants, and they are optimistic about the potential for earnings from their patent-pending technology [102][111] Question: Data center opportunities - Management discussed the potential for various types of deals with data centers, including on-site generation and infrastructure projects that could enhance rate base [90][121]

NYSE LISTED WTRG Full Year 2024 Earnings Call February 27th, 2025 2 Forward Looking Statement This presentation contains in addition to historical information, forward looking statements based on assumptions made by management regarding future circumstances over which the company may have little or no control, that involve risks, uncertainties and other factors that may cause actual results to be materially different from any future results expressed or implied by such forward-looking statements. These fact ...