Essential Utilities Q1 2025 Earnings Report [Financial Highlights](index=1&type=section&id=Financial%20Highlights) The company reported strong Q1 2025 results with increased net income and EPS while affirming full-year guidance Q1 2025 vs Q1 2024 Key Financials | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income | $283.8 million | $265.8 million | | Diluted EPS | $1.03 | $0.97 | | Revenues | $783.6 million | $612.1 million | - The company affirmed its **2025 earnings per share guidance range of $2.07 to $2.11** and its long-term targets[7](index=7&type=chunk) - Invested **$270.5 million in infrastructure** in the first three months of the year, on track for a total of **$1.4 to $1.5 billion in 2025**[7](index=7&type=chunk) - The company was named to **USA Today's annual list of Climate Leaders** for the third consecutive year[4](index=4&type=chunk) [Operating Results](index=1&type=section&id=Operating%20Results) Revenues grew significantly due to regulatory recoveries and higher gas volumes, boosting overall earnings - Q1 2025 revenue increased **28% to $783.6 million** from $612.1 million in Q1 2024, primarily due to regulatory recoveries, purchased gas costs, and higher regulated natural gas volumes[6](index=6&type=chunk) - Operations and maintenance expenses rose slightly to **$137.8 million** from $136.9 million in Q1 2024[6](index=6&type=chunk) - The current quarter's earnings were favorably compared to Q1 2024, even after accounting for a prior year gain on sale of a business valued at **24 cents per share**[5](index=5&type=chunk) [Regulated Water Segment](index=2&type=section&id=Regulated%20Water%20Segment) The water segment's revenue grew due to approved rates and surcharges while O&M expenses slightly decreased Water Segment Performance (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues | $300.8 million | $279.9 million | | O&M Expenses | $89.4 million | $90.7 million | - The primary driver for the **7.5% increase in revenue** was from rates and surcharges[8](index=8&type=chunk) [Regulated Natural Gas Segment](index=2&type=section&id=Regulated%20Natural%20Gas%20Segment) The natural gas segment's revenue surged from higher purchased gas costs and colder weather-driven volumes Natural Gas Segment Performance (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues | $470.8 million | $324.3 million | | O&M Expenses | $55.7 million | $45.9 million | - Revenue growth was driven by an increase in purchased gas costs and higher volumes delivered due to colder weather conditions[9](index=9&type=chunk) [Capital Management and Financing](index=2&type=section&id=Capital%20Management%20and%20Financing) The company maintained its dividend, managed debt costs, and utilized equity and commercial paper programs for financing - The board declared a quarterly cash dividend of **$0.3255 per share**, continuing a streak of **over 80 years** of consecutive quarterly dividends[10](index=10&type=chunk) - As of March 31, 2025, the weighted average cost of fixed-rate long-term debt was **4.02%**, and the company had **$728 million available** on its credit lines[11](index=11&type=chunk) - Through its at-the-market (ATM) equity program, the company issued shares for net proceeds of approximately **$63 million in Q1 2025** and an additional **$145 million in April 2025**[12](index=12&type=chunk) - A new commercial paper program was established in March 2025, allowing for up to **$1.0 billion** in short-term unsecured notes to reduce borrowing costs for infrastructure investments[13](index=13&type=chunk) [Growth and Investment Strategy](index=2&type=section&id=Growth%20and%20Investment%20Strategy) Growth is driven by substantial infrastructure investments, rate case activity, and a robust acquisition pipeline [Rate Activity](index=2&type=section&id=Rate%20Activity) The company secured significant rate awards in 2025 and has multiple base rate cases pending Recent Rate Awards (as of May 9, 2025) | Segment | States | Amount | | :--- | :--- | :--- | | Regulated Water | PA, NC, OH | $89.6 million | | Regulated Natural Gas | KY | $0.5 million | Pending Base Rate Cases | Segment | State | Requested Revenue | | :--- | :--- | :--- | | Regulated Natural Gas | Kentucky | ~$10.9 million | | Regulated Water | North Carolina | ~$45 million | [Capital Expenditures (CapEx)](index=3&type=section&id=Capital%20Expenditures%20%28CapEx%29) The company is on track for its 2025 CapEx target and has a multi-year plan focusing on infrastructure and PFAS remediation - Invested **approximately $271 million** in the first three months of 2025[15](index=15&type=chunk) - On track to invest between **$1.4 and $1.5 billion in 2025**[15](index=15&type=chunk) - Plans to invest **approximately $7.8 billion from 2025 through 2029**, with **at least $450 million** dedicated to addressing PFAS[15](index=15&type=chunk) [Growth by Acquisition](index=3&type=section&id=Growth%20by%20Acquisition) Acquisitions continue to be a key growth driver with recent closings and a large pipeline of potential new customers - Recently acquired the Village of Midvale's water system in Ohio (**~1,000 customers**) and Greenville Sanitary Authority's wastewater assets in Pennsylvania (**~2,300 customers**)[17](index=17&type=chunk) - Has five signed purchase agreements pending for systems in Pennsylvania and Texas, expected to serve **over 210,000 customers**, including the large DELCORA system[18](index=18&type=chunk) - The active pipeline of potential municipal acquisitions represents **approximately 400,000 total customers**[19](index=19&type=chunk) [2025 Guidance and Long-Term Outlook](index=4&type=section&id=2025%20Guidance%20and%20Long-Term%20Outlook) The company reaffirmed its 2025 EPS guidance and long-term growth targets, excluding the potential DELCORA acquisition 2025 Full-Year Guidance | Metric | Guidance | | :--- | :--- | | Diluted EPS | $2.07 to $2.11 | | Regulated Infrastructure Investments | $1.4 to $1.5 billion | Long-Term Growth Targets (through 2029) | Metric | Target | | :--- | :--- | | EPS CAGR (through 2027) | 5% to 7% | | Total Regulated Investments | ~$7.8 billion | | Water Segment Rate Base CAGR | ~6% | | Natural Gas Segment Rate Base CAGR | ~11% | | Combined Utility Rate Base CAGR | >8% | - The company plans to reduce Scope 1 and Scope 2 greenhouse gas emissions by **60% by 2035** from its 2019 baseline[22](index=22&type=chunk) - Guidance assumptions exclude the DELCORA acquisition, though the company remains confident in its ability to close the deal[21](index=21&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) This section presents the unaudited Q1 2025 operating data, statement of operations, and balance sheets [Selected Operating Data](index=6&type=section&id=Selected%20Operating%20Data) A high-level summary shows year-over-year increases in Q1 revenues, net income, and earnings per share Selected Operating Data (Unaudited, In thousands, except per share) | | Quarter Ended March 31, 2025 | Quarter Ended March 31, 2024 | | :--- | :--- | :--- | | Operating revenues | $783,626 | $612,069 | | Operations and maintenance expense | $137,824 | $136,900 | | Net income | $283,789 | $265,772 | | Diluted net income per common share | $1.03 | $0.97 | [Consolidated Statement of Operations](index=7&type=section&id=Consolidated%20Statement%20of%20Operations) The detailed income statement shows operating revenues of $783.6 million and net income of $283.8 million for Q1 2025 Consolidated Statement of Operations (Unaudited, In thousands) | | Quarter Ended March 31, 2025 | Quarter Ended March 31, 2024 | | :--- | :--- | :--- | | **Operating revenues** | **$783,626** | **$612,069** | | Operating income | $338,905 | $230,666 | | Income before income taxes | $263,194 | $255,130 | | **Net income** | **$283,789** | **$265,772** | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to $18.33 billion and total equity increased to $6.46 billion as of March 31, 2025 Condensed Consolidated Balance Sheets (Unaudited, In thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$18,327,161** | **$18,026,554** | | Net property, plant and equipment | $13,320,374 | $13,143,476 | | **Total Liabilities** | **$11,867,070** | **$11,827,745** | | Long-term debt, net | $7,524,985 | $7,368,381 | | **Total Equity** | **$6,460,091** | **$6,198,809** |

Financial Performance & Guidance - Q1 2025 EPS reached $103[9], with 2025 EPS guidance set at $207-$211[9] - Infrastructure investments for 2025 are projected to be $14 billion - $15 billion[9] - The company issued approximately $210 million of equity via ATM[9] - Q1 2025 operating revenues increased by 280% to $7836 million, compared to $6121 million in Q1 2024[30] - Net income for Q1 2025 increased by 68% to $2838 million, compared to $2658 million in Q1 2024[30] - Net income per share for Q1 2025 increased by 62% to $103, compared to $097 in Q1 2024[30] Growth & Investment - Infrastructure investments of approximately $78 billion are planned for 2025-2029[14] - The company is targeting approximately 11% rate base CAGR for Peoples[16] - The company expects to raise approximately $315 million in equity in 2025[48] Regulatory & Acquisitions - Completed regulatory recoveries in the water segment are expected to increase annualized revenue by $896 million[43] - Pending regulatory recoveries in the water segment are requesting an annualized revenue increase of $472 million[43] - Gas segment surcharges in KY with annualized revenue increase of $05 million[43]

分组1 - Essential Utilities reported quarterly earnings of $1.03 per share, exceeding the Zacks Consensus Estimate of $0.80 per share, and up from $0.73 per share a year ago, representing an earnings surprise of 28.75% [1] - The company posted revenues of $783.63 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 13.34%, compared to year-ago revenues of $612.07 million [2] - Essential Utilities shares have increased approximately 12.2% since the beginning of the year, while the S&P 500 has declined by 3.8% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $0.32 on revenues of $468.99 million, and for the current fiscal year, it is $2.10 on revenues of $2.3 billion [7] - The Utility - Water Supply industry is currently ranked in the top 35% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] 分组3 - The estimate revisions trend for Essential Utilities is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, suggesting expected underperformance in the near future [6]

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 ...

Core Viewpoint - Essential Utilities (WTRG) has consistently beaten earnings estimates and is well-positioned for future earnings growth, particularly with its upcoming quarterly report expected on May 12, 2025 [1][8]. Earnings Performance - In the most recent quarter, Essential Utilities reported earnings of $0.67 per share, surpassing the expected $0.66 per share, resulting in a surprise of 1.52% [2]. - For the previous quarter, the company reported $0.25 per share against an expectation of $0.23 per share, achieving a surprise of 8.70% [2]. Earnings Estimates and Predictions - Estimates for Essential Utilities have been trending higher, influenced by its history of earnings surprises [5]. - The company currently has a positive Earnings ESP (Expected Surprise Prediction) of +0.63%, indicating increased analyst optimism regarding its near-term earnings potential [8]. - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [6]. Earnings ESP Explanation - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [7]. - A negative Earnings ESP can reduce predictive power but does not necessarily indicate an earnings miss [9]. Importance of Earnings ESP - Companies that beat consensus EPS estimates may not always see their stock prices rise, while some may maintain their value even after missing estimates [10]. - Utilizing the Earnings ESP Filter can help identify the best stocks to buy or sell prior to earnings reports [10].

Core Viewpoint - The utility sector is viewed as a safe investment during economic turbulence, providing essential services that consumers prioritize even in difficult times [1][7][8]. Group 1: Definition and Characteristics of Utility Stocks - Utility stocks are companies primarily involved in distributing essential services such as electricity, gas, and water [5][6]. - The Global Industry Classification Standard (GICS) categorizes the utility sector to include electric, gas, and water utilities, as well as independent power producers and energy traders [6]. - Utility companies exhibit low economic sensitivity, generating stable revenues and profits, and are known for their substantial dividends [8][9]. Group 2: Investment Appeal - Investors are drawn to utility stocks due to their "stickiness" in revenues, similar to healthcare and consumer staples, making them defensive stocks [7][8]. - Utilities are often among the best-yielding market sectors, providing safety and potential upside during market downturns [9]. - The sector's stability allows for gradual rate increases, although growth is typically capped at low single-digit rates [11]. Group 3: Recent Trends and Opportunities - The rise of artificial intelligence (AI) is expected to significantly increase power usage over the next decade, presenting a unique growth opportunity for utility companies [12][13]. - This trend may enable utilities to enhance their business results in a way that has not been seen before [13]. Group 4: Criteria for Selecting Utility Stocks - A quality screen for selecting utility stocks includes companies within the S&P Composite 1500, with a long-term estimated earnings-per-share growth rate of at least 5% [15]. - Stocks should have a dividend yield of at least 2.5%, with a history of growing dividends by at least 5% over the past year [16][17]. - Companies should have at least five covering analysts and a consensus Buy rating of 2.5 or less on S&P Global Market Intelligence's ratings scale [18][19]. Group 5: Recommended Utility Stocks - Recommended utility stocks include: - IDACORP (IDA): 2.9% yield, 5.5% estimated annual dividend growth, 8.3% long-term EPS growth, consensus rating 1.75 [19]. - NiSource (NI): 2.8% yield, 6.8% estimated annual dividend growth, 8.0% long-term EPS growth, consensus rating 1.53 [19]. - DTE Energy (DTE): 3.1% yield, 6.9% estimated annual dividend growth, 8.0% long-term EPS growth, consensus rating 2.05 [19]. - New Jersey Resources (NJR): 3.6% yield, 5.4% estimated annual dividend growth, 7.6% long-term EPS growth, consensus rating 2.22 [19]. - CMS Energy (CMS): 2.9% yield, 5.8% estimated annual dividend growth, 7.3% long-term EPS growth, consensus rating 2.21 [19]. - Sempra (SRE): 3.7% yield, 5.6% estimated annual dividend growth, 7.0% long-term EPS growth, consensus rating 2.11 [19]. - Ameren (AEE): 2.6% yield, 6.3% estimated annual dividend growth, 6.9% long-term EPS growth, consensus rating 2.24 [19]. - Public Service Enterprise Group (PEG): 3.1% yield, 5.7% estimated annual dividend growth, 6.6% long-term EPS growth, consensus rating 2.35 [19]. - Essential Utilities (WTRG): 3.2% yield, 6.6% estimated annual dividend growth, 6.5% long-term EPS growth, consensus rating 1.46 [19]. - FirstEnergy (FE): 4.1% yield, 5.6% estimated annual dividend growth, 5.7% long-term EPS growth, consensus rating 2.39 [20].

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].