Essential Utilities (WTRG) Q3 2024 earnings summary

Executive summary

• Q3 2024 net income was $69.4 million ($0.25 per share), down from $80.1 million ($0.30 per share) in Q3 2023, with year-to-date net income up 13% to $410.6 million ($1.50 per share) due to a gain on energy plant sales.

• Q3 2024 revenues rose 6% year-over-year to $435.3 million, driven by regulatory recoveries, water volume growth, and customer additions, offset by lower natural gas volumes.

• Multi-year EPS guidance reinstated, targeting 5–7% CAGR through 2027, with 2024 EPS guidance at $1.96–$2.00 and 2025 EPS at $2.07–$2.11.

• Major regulatory milestones include PUC approval of Peoples Natural Gas rate case, Aqua Pennsylvania settlement, and weather normalization mechanism in Pennsylvania.

• Demonstrated operational resilience with rapid recovery from Hurricane Helene in North Carolina, restoring most systems within five days.

Financial highlights

• Q3 2024 operating revenues: $435.3 million (up 5.8% year-over-year); nine-month revenues: $1,481.7 million (down from $1,574.4 million in 2023) due to lower gas revenues.

• Q3 2024 net income: $69.4 million (down from $80.1 million); nine-month net income: $410.6 million (up from $362.8 million, aided by asset sale gain).

• Q3 2024 diluted EPS: $0.25 (down from $0.30); nine months: $1.50 (up from $1.37 year-over-year).

• Q3 2024 operating income: $155.1 million (up from $137.4 million in Q3 2023).

• Q3 2024 O&M expenses: $144.4 million (down from $147.0 million); nine-month O&M: $423.8 million (up 1% year-over-year).

Outlook and guidance

• 2024 EPS guidance reaffirmed at $1.96–$2.00; 2025 EPS expected at $2.07–$2.11; long-term EPS growth targeted at 5–7% CAGR through 2027.

• Infrastructure investment planned at $7.8–$8.0 billion through 2029, with $1.3–$1.4 billion in 2024 and $1.4–$1.5 billion in 2025.

• Water segment rate base projected to grow at 6% CAGR, gas at 11% CAGR, and combined at over 8% CAGR through 2029.

• Water customer base expected to grow 2–3% annually; gas customer base to remain stable.

• At least $450 million for PFAS and $210 million for lead line replacements planned over five years.