Essential Utilities (WTRG) Q4 2024 earnings summary

Executive summary

• GAAP EPS for 2024 was $2.17, including a $0.25 gain on asset sales; adjusted non-GAAP EPS was $1.97, in line with 5%-7% guidance and above consensus.

• Net income rose to $595.3 million from $498.2 million, driven by asset sales and regulatory outcomes.

• Over $1.3 billion invested in infrastructure, including PFAS mitigation at 13 sites and replacement of 370+ miles of pipe.

• Dividend increased by 6%, marking 80 consecutive years of payments and a 40% five-year growth.

• Closed and pending municipal acquisitions expected to add over 210,000 customers, with $344 million pending rate base.

Financial highlights

• 2024 operating revenues rose to $2,086.1 million from $2,053.8 million; net income increased to $595.3 million.

• GAAP EPS increased to $2.17 from $1.86; adjusted EPS was $1.97.

• Rate increases and surcharges contributed nearly $83 million in revenue, with $51 million from water and $32 million from gas.

• O&M expenses increased by 2% year-over-year to $587.3 million, reflecting disciplined cost control.

• Dividend per share for 2024 was $1.265, continuing a long-term upward trend.

Outlook and guidance

• 2025 EPS guidance is $2.07–$2.11; long-term EPS growth targeted at 5%-7% CAGR through 2027, based on $1.97 adjusted 2024 EPS.

• $1.4–$1.5 billion in infrastructure investment planned for 2025; $7.8 billion through 2029.

• Water rate base CAGR projected at 6%, gas rate base at 11% through 2029.

• Water customer base projected to grow 2%-3% annually via acquisitions and organic growth.

• $315 million in equity to be raised in 2025 via ATM program.