Chesapeake Utilities (CPK) Q2 2024 earnings summary

Executive summary

• Adjusted EPS for Q2 2024 was $0.86, with adjusted net income of $19.3M, up 19% year-over-year, driven by the Florida City Gas (FCG) acquisition and organic growth; YTD adjusted EPS was $2.96.

• Net income for Q2 2024 was $18.3M, up 13% year-over-year; six-month net income was $64.4M, up 23%.

• Customer growth in Delmarva and Florida averaged 3.7–3.9% year-over-year, supporting robust operational performance.

• Integration of FCG is progressing, with operational synergies, technology upgrades, and SAP implementation underway.

• Results are in line with management expectations, with prudent expense management and strong contributions from legacy operations.

Financial highlights

• Q2 2024 operating revenues were $166.3M, up 23% year-over-year; YTD revenues reached $412.0M, up 16%.

• Adjusted gross margin for Q2 2024 was $126.6M, up 27% year-over-year; YTD adjusted gross margin was $291.2M, up 27%.

• Q2 2024 operating income rose 44% to $40.8M; YTD operating income was $120.4M, up 44.6%.

• Interest charges increased to $16.8M in Q2 2024, mainly due to FCG acquisition-related debt and higher share count.

• Weighted average diluted shares outstanding increased to 22.3M from 17.9M due to the FCG acquisition.

Outlook and guidance

• 2024 adjusted EPS guidance reaffirmed at $5.33–$5.45; 2025 at $6.15–$6.35; 2028 at $7.75–$8.00, reflecting a 10-year CAGR of approximately 8.5%.

• 2024 capital expenditure guidance is $300M–$360M, with $160M invested in H1 2024; five-year CapEx guidance is $1.5B–$1.8B.

• Pathway to guidance includes continued legacy business growth, full-year FCG contribution, and additional margin and cost synergies.