Eversource(US:ES)2022-07-29 19:58Financial Data and Key Metrics Changes - Eversource Energy reported GAAP earnings of $0.84 per share for Q2 2022, an increase from $0.77 in Q2 2021, and $2.13 per share for the first half of 2022 compared to $1.83 in the same period of 2021 [25][27] - Excluding acquisition-related costs, earnings were $0.86 per share in Q2 2022 versus $0.79 in Q2 2021 [26] - The company narrowed its non-GAAP earnings guidance for the full year to $4.04 to $4.14 per share from a previous range of $4.00 to $4.17 [33] Business Segment Performance - The electric transmission segment earned $0.44 per share in Q2 2022, up from $0.40 in Q2 2021, driven by higher investment levels [28] - The electric distribution segment reported earnings of $0.37 per share in Q2 2022, compared to $0.35 in Q2 2021, attributed to higher revenues and lower pension costs [29] - The natural gas distribution segment saw earnings rise to $2.00 per share in Q2 2022 from $0.01 in Q2 2021, mainly due to increased revenues [30] - The water distribution segment maintained earnings at $0.03 per share, consistent with Q2 2021 [31] Market Data and Key Metrics Changes - The demand for offshore wind generation is increasing, with Rhode Island enacting legislation for an additional 600 to 1,000 megawatts of offshore wind [19] - New York issued a much larger offshore wind RFP for approximately 4,600 megawatts, indicating strong market interest [20] Company Strategy and Industry Competition - Eversource is focused on offshore wind investments and has initiated a strategic review for its 50% interest in a joint venture, expecting a robust sales process [15][16] - The company reaffirmed its $18 billion five-year regulated capital program, including $3.9 billion projected for this year [37] - Eversource is not interested in expanding its natural gas footprint but sees opportunities in the fragmented water business [59] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the positive impact of the Inflation Reduction Act on renewable energy projects, particularly offshore wind [62] - The company anticipates clarity on its offshore wind sale process by the end of 2022, with expectations for a successful outcome [63] Other Important Information - Eversource has fully transitioned its gas business systems to its platform, with positive feedback from customers and employees [34][36] - The company is actively working on regulatory reviews and expects decisions on rate cases by the end of 2022 [46] Q&A Session Summary Question: Can you provide an update on the offshore wind sale process? - Management reported 12 additional interested parties and noted a healthy atmosphere for wind investments, indicating no concerns about construction risk [57] Question: How does the company view inorganic growth opportunities outside New England? - The focus remains on wind investments, with interest in acquiring municipal water systems due to their fragmented nature [59] Question: What is the expected impact of the Inflation Reduction Act on Eversource? - Management is optimistic about the Act's provisions for renewable energy tax credits, which could enhance project value [62] Question: How does the company plan to use proceeds from the offshore wind sale? - Proceeds will primarily be used for debt paydown and to fund regulated investments needed for infrastructure upgrades [64][74] Question: What is the outlook for the Massachusetts climate legislation? - Management expects favorable action from the Governor, indicating a positive outlook for the legislation [95]