Essential Utilities Beats Q3 Earnings Estimates, Plans to Invest $8B

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]