Core Insights - Essential Utilities Inc. (WTRG) reported fourth-quarter 2024 operating earnings per share (EPS) of 67 cents, exceeding the Zacks Consensus Estimate of 66 cents by 1.5% and showing a 34% increase from the previous year's EPS of 50 cents [1][2] Financial Performance - Total operating revenues reached $604 million, surpassing the Zacks Consensus Estimate of $534 million by 13.2%, with a year-over-year increase of 2.6% [3] - Operating income was $226.6 million, reflecting a 30.3% year-over-year growth, while operating and maintenance expenses rose by 4.2% to $163.5 million [4] - Interest expenses increased by 8.8% to $79.3 million compared to $72.9 million in the prior-year quarter [4] Strategic Initiatives - The company has expanded its operations through strategic acquisitions, adding nearly 129,000 wastewater customers since 2015, and signed seven purchase agreements to acquire additional wastewater systems, expected to add 213,000 retail customers [5] - In 2024, the regulated water segment received rate awards to increase annual revenues by $53.9 million across several states, while the regulated natural gas segment received rate awards to boost revenues by $93.9 million in Kentucky and Pennsylvania [6] Financial Position - As of December 31, 2024, current assets were $485.9 million, down from $492 million a year earlier, and long-term debt increased to $7.36 billion from $6.82 billion [7] - The company invested $1.3 billion in 2024 to enhance its regulated water and natural gas infrastructure [7] Future Outlook - Essential Utilities reaffirmed its 2025 EPS guidance of $2.05-$2.11, with the Zacks Consensus Estimate for EPS at $2.13, indicating potential growth [8] - The company plans to invest $1.4-$1.5 billion in infrastructure in 2025 and a total of $7.88 billion from 2025 to 2029 to improve water and natural gas systems [9]

Financial Performance - Essential Utilities reported a 17% increase in earnings per share to $2.17 for the full year 2024, compared to $1.86 in 2023[1] - The company achieved revenues of $2,086.1 million for 2024, a 1.6% increase from $2,053.8 million in 2023[3] - Operating revenues for Q4 2024 reached $604,383 thousand, a 26% increase from $479,419 thousand in Q4 2023[32] - Net income for Q4 2024 was $184,755 thousand, up 36% from $135,448 thousand in Q4 2023[32] - Basic and diluted net income per common share for Q4 2024 was $0.67, compared to $0.50 in Q4 2023, representing a 34% increase[32] - The company reported an adjusted income of $540,898 thousand for the year ended December 31, 2024[40] Revenue Segments - The regulated water segment generated revenues of $1,221.9 million, reflecting a 5.9% increase compared to $1,153.3 million in 2023[5] - The regulated natural gas segment reported revenues of $843.0 million, down from $863.8 million in 2023, primarily due to lower purchased gas costs[6] Investments and Infrastructure - Essential invested approximately $1.3 billion in infrastructure improvements in 2024, including mitigation of PFAS contamination at 13 sites[15] - The company expects to invest $1.4 to $1.5 billion in infrastructure in 2025 and approximately $7.8 billion from 2025 to 2029[16] - The company has signed purchase agreements for additional water and wastewater systems expected to serve over 210,000 equivalent customers, totaling over $344.0 million[19] Growth Projections - Essential's multi-year earnings guidance indicates a compounded annual growth rate of 5-7% in earnings per share through 2027[3] - The average annual long-term growth rate for the water utility customer base is projected to be between 2-3% for acquisitions and organic growth[32] Equity and Debt - Total equity increased to $6,198,809 thousand in 2024 from $5,896,183 thousand in 2023, reflecting a growth of approximately 5%[42] - Long-term debt, net of debt issuance costs, rose to $7,368,381 thousand in 2024 from $6,826,085 thousand in 2023[42] - The company plans to raise approximately $315 million in equity through the At-The-Market equity program in 2025[32] Environmental Goals - The company aims to reduce Scope 1 and 2 greenhouse gas emissions by 60% by 2035 from its 2019 baseline[22] - The company aims to reduce Scope 1 and Scope 2 greenhouse gas emissions by 60% by 2035 from the 2019 baseline[32] Other Notable Events - The company experienced a gain of $91,236 thousand from the sale of non-utility local microgrid and distributed energy projects in Q1 2024[37] - Essential's board declared a quarterly cash dividend of $0.3255 per share, payable on June 2, 2025[9]

Core Insights - Essential Utilities (WTRG) reported quarterly earnings of $0.67 per share, exceeding the Zacks Consensus Estimate of $0.66 per share, and up from $0.50 per share a year ago, representing an earnings surprise of 1.52% [1] - The company posted revenues of $604.38 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 13.19%, compared to $479.42 million in the same quarter last year [2] - Essential Utilities shares have increased approximately 4.7% since the beginning of the year, outperforming the S&P 500's gain of 1.3% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.80 on revenues of $699.82 million, and for the current fiscal year, it is $2.13 on revenues of $2.26 billion [7] - The estimate revisions trend for Essential Utilities is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Utility - Water Supply industry is currently in the top 32% of over 250 Zacks industries, suggesting that stocks in the top 50% outperform those in the bottom 50% by more than 2 to 1 [8] - Another company in the same industry, Global Water Resources, Inc. (GWRS), is expected to report quarterly earnings of $0.06 per share, reflecting a year-over-year decline of 14.3% [9]

Core Viewpoint - Essential Utilities (WTRG) has experienced significant selling pressure, resulting in an 8.7% decline over the past four weeks, but analysts anticipate better earnings than previously expected, indicating potential for recovery [1]. Group 1: Stock Performance and Technical Indicators - WTRG is currently in oversold territory with a Relative Strength Index (RSI) reading of 20.88, suggesting that the heavy selling may be exhausting itself, which could lead to a price rebound [5]. - The RSI is a momentum oscillator that helps identify whether a stock is oversold, typically when the reading falls below 30 [2][3]. Group 2: Earnings Estimates and Analyst Sentiment - Over the last 30 days, the consensus EPS estimate for WTRG has increased by 0.2%, indicating a positive trend in earnings estimate revisions, which often correlates with price appreciation [6]. - WTRG holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a turnaround [7].

Core Insights - The article discusses Essential Utilities, Inc. (NYSE: WTRG) and its recent quarterly results, emphasizing progress on regulatory approvals in Pennsylvania and ongoing investments in infrastructure improvements in both water and natural gas segments [1] Regulatory Approvals - Essential Utilities has made significant progress in obtaining key regulatory approvals in Pennsylvania, which is crucial for its operational expansion and compliance [1] Infrastructure Investments - The company continues to sustain its investment in infrastructure improvements across its water and natural gas segments, indicating a commitment to enhancing service quality and operational efficiency [1]

Company Overview - The Company serves approximately 5.5 million people across nine states under the Aqua and Peoples brands[112]. Financial Performance - Consolidated operating revenues increased by $24,000 or 5.8% for the three months ended September 30, 2024, compared to the same period in 2023[132]. - Net income for the three months ended September 30, 2024, was $69,402, a decrease from $80,076 in the same period of 2023[132]. - Consolidated operating revenues decreased by $92,675 or 5.9% for the nine months ended September 30, 2024, compared to the same period in 2023[139]. - For the first nine months of 2024, revenues increased by $45,287 or 5.2%, mainly due to higher water and wastewater rates and a larger customer base[157]. Cash Flow and Debt - In the first nine months of 2024, cash flow from operations was $622,510, a decrease from $804,569 in the same period of 2023[122]. - The Company issued $1,394,411 in long-term debt during the first nine months of 2024 to finance capital expenditures and repay existing indebtedness[123]. - As of September 30, 2024, the Company had $8,436 in cash and cash equivalents, an increase from $4,612 at December 31, 2023[127]. - As of September 30, 2024, the company had $824,226 available for borrowing from its $1,000,000 unsecured revolving credit facility[128]. Capital Expenditures - Capital expenditures for the first nine months of 2024 totaled $932,498, primarily for improvements to water, wastewater, and natural gas infrastructure[123]. - The Company estimates a capital expenditure of at least $450,000 to comply with new EPA water quality standards by 2029[115]. - Approximately 6% of the Company's regulated water service systems contain lead or galvanized service lines requiring replacement, with a budget of $210,000 for this over the next five years[117]. Asset Sales and Gains - The Company sold its regulated natural gas utility assets in West Virginia for a final purchase price of $41,178, representing about 2% of its regulated natural gas customers[113]. - The Company recognized a gain of $91,236 from the sale of three non-utility local microgrid and distributed energy projects, completed in January 2024[113]. - Gain on sale of assets was $92,067 for the nine months ended September 30, 2024, compared to $184 in the same period of 2023[145]. - Gain on sale of assets was $91,581 for the nine months ended September 30, 2024, compared to $0 for the same period in 2023[179]. Expenses - Operations and maintenance expense decreased by $2,650 or 1.8% for the three months ended September 30, 2024, primarily due to the sale of regulated natural gas utility assets[133]. - Purchased gas increased by $2,505 or 15.1% for the three months ended September 30, 2024, due to higher average gas costs and usage[134]. - Operations and maintenance expense increased by $7,903 or 2.9% in the first nine months of 2024, primarily due to increased production costs and employee-related costs[158]. - Operations and maintenance expense decreased by $3,642 or 2.5% due to the sale of regulated natural gas utility assets and non-utility projects[175]. - Employee-related costs increased by $3,777, materials and supplies by $2,121, and customer assistance surcharge costs by $692[175]. Depreciation and Amortization - Depreciation and amortization expense increased by $6,566 or 7.6% due to continued capital expenditures and acquisitions[135]. - Depreciation and amortization increased by $3,182 or 5.8% in Q3 2024, attributed to ongoing capital investments and acquisitions of new utility systems[153]. - Depreciation and amortization for the first nine months of 2024 increased by $11,303 or 7.0%, driven by capital investments and acquisitions[159]. - Depreciation and amortization increased by $5,904 or 6.3% due to continued capital investment in pipe replacement[178]. Interest Expense - Interest expense, net of interest income, increased by $7,804 or 11.5% for the three months ended September 30, 2024[136]. - Interest expense, net of interest income, rose by $4,227 or 13.7% in Q3 2024 due to higher debt borrowings for the Regulated Water segment[153]. - Interest expense, net of interest income, increased by $13,231 or 14.5% in the first nine months of 2024, primarily due to higher debt borrowings[160]. Tax Rate - The effective income tax rate for the Regulated Water segment was 14.7% in Q3 2024, up from 13.9% in Q3 2023, reflecting changes in jurisdictional earnings mix[155]. - The effective income tax rate for the first nine months of 2024 was 17.1%, compared to 14.6% in the same period of 2023, due to changes in jurisdictional earnings mix and tax deductions[162]. - The effective income tax rate was a benefit of 27.9% in the first nine months of 2024, down from a benefit of 137.3% in the same period in 2023[180]. Management and Governance - The Chief Accounting Officer announced retirement effective August 2025, with a successor already appointed[186]. - No changes in internal control over financial reporting occurred during the quarter ended September 30, 2024[183]. Other - AFUDC increased by $1,489 due to the increase in the average balance of utility plant construction work in progress[178]. - The company recognized a decrease in legal expenses of $2,735 and bad debt expense of $1,207[175].

Financial Data and Key Metrics Changes - The company reported earnings per share (EPS) of $0.25 for Q3 2024, a decrease from $0.30 in Q3 2023, primarily due to one-time tax benefits in the previous year [23][29] - Revenues for Q3 2024 were $435.3 million, an increase of approximately 6% compared to $411.3 million in Q3 2023, driven by rate increases, surcharges, and customer growth [21][22] - Operations and maintenance (O&M) expenses decreased compared to Q3 2023, mainly due to reduced bad debt expenses and divestitures [22][26] Business Line Data and Key Metrics Changes - The regulated water segment saw revenues increase by nearly 8% in Q3 2024 compared to the same period in 2023, attributed to higher water volume due to warm and dry weather [25] - The natural gas segment experienced a minor revenue decline due to lower gas sales from warmer-than-normal weather [21][24] Market Data and Key Metrics Changes - The Pennsylvania Public Utility Commission (PUC) approved a rate case for Peoples Natural Gas, resulting in an annualized revenue increase of $93 million [9][31] - A settlement agreement for Aqua Pennsylvania is expected to yield an annualized revenue increase of $73 million, pending approval [11][35] Company Strategy and Development Direction - The company reinstated its multiyear EPS guidance at a growth rate of 5% to 7% through 2027, excluding any contributions from the DELCORA transaction [7][43] - Plans to invest approximately $7.8 billion in infrastructure improvements through 2029, focusing on water, wastewater, and natural gas systems [13][44] - The company aims to maintain affordable rates for customers while achieving growth through acquisitions and organic customer growth [47][48] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving EPS growth despite challenges such as elevated inflation and higher interest rates [16] - The company is optimistic about future growth opportunities, particularly in Texas and North Carolina, where significant population growth is expected [42][47] Other Important Information - The company is actively pursuing acquisitions, with signed agreements projected to add over 213,000 customers across three states [38] - Regulatory activities include pending rate cases and infrastructure surcharges in multiple states, with a total revenue request of $149.2 million [36] Q&A Session Summary Question: Equity financing expectations and timing - Management clarified that they plan to raise approximately $350 million in equity between 2024 and 2025, with flexibility in timing based on market conditions [51][52] Question: Clarification on EPS growth starting point - The starting point for the 5% to 7% EPS growth CAGR is expected to be close to the 2024 guidance midpoint, which is still being finalized [64] Question: PFAS-related costs and recovery mechanisms - Management indicated that they expect to recover PFAS-related costs through various regulatory mechanisms, including deferred accounting treatment [80][81] Question: Timeline for the Peoples Gas appeal - The appeal process is expected to take about a year, with management confident in the strength of the PUC's decision [82][85] Question: Water rate increase implementation - The $73 million water and wastewater base rate increase from the settlement will be implemented all at once in February 2025 [87]

Core Viewpoint - Essential Utilities, Inc. is conducting its Q3 2024 earnings call to provide updates on long-term guidance and financial performance [3]. Group 1: Company Overview - The earnings call is hosted by Brian Dingerdissen, VP of Investor Relations and Treasurer, and features key executives including Christopher Franklin, President and CEO, and Daniel Schuller, CFO [1][5]. - The company emphasizes the availability of slides and a webcast for further details on their financial performance [3]. Group 2: Financial Reporting - The call will include discussions on forward-looking statements that may involve risks and uncertainties affecting actual results [4]. - Reference will be made to non-GAAP financial measures, with reconciliations to GAAP measures available on the company's investor relations website [4].

Core Insights - Essential Utilities Inc. (WTRG) reported third-quarter 2024 operating earnings per share (EPS) of 25 cents, exceeding the Zacks Consensus Estimate of 23 cents by 8.7%, but down 16.7% from 30 cents in the same quarter last year [1][2] Financial Performance - Total operating revenues reached $435 million, surpassing the Zacks Consensus Estimate of $420 million by 3.8%, and reflecting a year-over-year increase of 5.8% [2] - Operating income was $155.1 million, marking a 12.9% increase year over year, while interest expenses rose by 11.9% to $76.9 million from $68.6 million in the prior-year quarter [3] - Current assets were reported at $373.9 million as of September 30, 2024, down from $492 million as of December 31, 2023, and long-term debt increased to $7.23 billion from $6.82 billion during the same period [5] Operational Highlights - Operation and maintenance expenses decreased by 1.8% to $144.4 million compared to $147 million in the previous year, attributed to lower bad debt expenses and reduced costs from the sale of West Virginia gas utility and energy plant assets [2] - The company signed seven purchase agreements to acquire additional wastewater systems, which will add 213,000 retail customers [3] Regulatory and Investment Activities - The regulated water segment received rate awards or infrastructure surcharges totaling $51 million across several states, while the regulated natural gas segment received $21.8 million in infrastructure surcharges [4] - Essential Utilities invested $932.5 million in the first nine months of 2024 to enhance its regulated water and natural gas infrastructure [6] Future Guidance - The company reaffirmed its 2024 EPS guidance range of $1.96-$2, with the Zacks Consensus Estimate at $1.99, and expects 2025 EPS to be between $2.05 and $2.11 [7] - Plans to invest $1.4-$1.5 billion in infrastructure in 2025 and $8 billion from 2025 to 2029 to improve systems and customer service [8] - Long-term earnings per share are projected to grow at a compounded annual growth rate of 5% to 7% through 2027 [8] Market Position - Essential Utilities currently holds a Zacks Rank 2 (Buy), indicating a favorable outlook in the market [9]

Exhibit 99.1 Essential Utilities Reports Financial Results for Q3 2024 Earnings per share of $0.25 for Q3 2024 Company reinstates multi-year earnings guidance of 5-7% PUC approval of Peoples Natural Gas rate case Settlement reached for Aqua Pennsylvania rate case BRYN MAWR, PA (November 4, 2024) – Essential Utilities Inc. (NYSE: WTRG) today reported results for the third quarter ended September 30, 2024. Essential's net income was $69.4 million or $0.25 per share for the third quarter of 2024. Essential als ...