Chesapeake Utilities Corp (CPK) Reports Q3 2023 Earnings, Adjusted EPS Rises by 28%
Chesapeake Utilities Corp (NYSE:CPK) reported Q3 2023 earnings per share (EPS) of $0.53, slightly down from $0.54 in Q3 2022.
Adjusted EPS for Q3 2023, excluding transaction-related expenses, rose by 28% to $0.69 compared to $0.54 in Q3 2022.
Year-to-date EPS was $3.47 compared to $3.58 per share in the prior year.
The company is on track to acquire Florida City Gas (FCG) for approximately $923 million, expected to close in Q4 2023.
Chesapeake Utilities Corp (NYSE:CPK) announced its financial results for the third quarter and nine months ended September 30, 2023, on November 2, 2023. The company's adjusted net income for Q3 2023, excluding transaction-related expenses for the announced acquisition of FCG, was $12.2 million, compared to $9.7 million reported in Q3 2022. Adjusted EPS in the quarter was $0.69 per share, compared to $0.54 per share reported in the same prior-year period.
Financial Performance
Adjusted gross margin growth of $7.6 million during the third quarter was driven by continued pipeline expansion projects, natural gas organic growth, regulatory initiatives, and increased propane margins and fees. However, historically warmer temperatures significantly impacted customer consumption during the first half of 2023, lowering both EPS and Adjusted EPS by approximately $0.41 per share.
For the first nine months of 2023, adjusted net income was $64.8 million compared to $63.6 million for the same period in 2022. Adjusted EPS for the nine months ended September 30, 2023, was $3.63 compared to $3.58 per share reported in the prior-year period.
Acquisition of Florida City Gas
In September 2023, Chesapeake Utilities Corp (NYSE:CPK) entered into a definitive stock purchase agreement with NextEra Energy, Inc. to acquire FCG for approximately $923 million in cash. The transaction is expected to close by the end of the fourth quarter of 2023, contingent on customary closing conditions and certain regulatory approvals.
Capital Investment and Earnings Guidance
Prior to the announcement of the FCG acquisition, the company's capital expenditures guidance ranged from $900 million to $1.1 billion for the five years ended 2025 and its EPS guidance range was $6.15 to $6.35 per share for 2025. Given the magnitude of the FCG acquisition, the company announced new capital expenditure guidance for the five-year period ended 2028 that will range from $1.5 billion to $1.8 billion. The company also reaffirmed its current EPS guidance range for 2025 of $6.15 to $6.35 per share and extended its EPS guidance to a range of $7.75 to $8.00 per share for 2028.
Future Outlook
Despite challenges with rising interest rates and significantly warmer temperatures, Chesapeake Utilities Corp (NYSE:CPK) has delivered strong performance on a year-to-date basis. The company remains committed to executing on its growth strategy, achieving another record year of performance, and driving increased shareholder value.
Explore the complete 8-K earnings release (here) from Chesapeake Utilities Corp for further details.
This article first appeared on GuruFocus.
