Essential Utilities (WTRG) Q2 Earnings On Par With Estimates
Essential Utilities Inc. WTRG delivered second-quarter 2023 operating earnings per share (EPS) of 34 cents, on par with the Zacks Consensus Estimate. The bottom line surpassed the year-ago quarter’s earnings of 31 cents by 9.7%.
Earnings from rates and surcharges and regulated water segment customer growth were offset by decreased regulated natural gas segment volume and other items.
Total Revenues
Second-quarter operating revenues of $437 million lagged the Zacks Consensus Estimate of $468 million by 6.7%. Total revenues were down 2.7% year over year.
Essential Utilities Inc. Price, Consensus and EPS Surprise
Essential Utilities Inc. price-consensus-eps-surprise-chart | Essential Utilities Inc. Quote
Highlights of the Release
Essential Utilities continues to expand operations through acquisitions. On Jun 20, 2023, the company’s subsidiary, Aqua Ohio, acquired the Union Rome Sewer system in Lawrence County, OH, further expanding its operation.
Essential Utilities has signed four purchase agreements to acquire additional water and wastewater systems that will add 208,000 retail customers or equivalent dwelling units to its existing customer base for $336 million.
The company invested nearly $547.6 million in the first half of 2023 to improve its regulated water and natural gas infrastructure systems and to enhance customer service across its operations.
So far in 2023, the company’s regulated water segment has received rate awards or infrastructure surcharges worth $26.4 million and its regulated natural gas segment has received infrastructure surcharges worth $20.9 million.
Operation and maintenance expenses for the second quarter were $133.5 million, down 1.1% from the year-ago figure of $134.9 million.
Operating income was $155.3 million, up 12.7% year over year.
Interest expenses increased 25.4% to $69.2 million from $55.2 million in the year-ago quarter.
Financial Highlights
Current assets were $406.7 million as of Jun 30, 2023 compared with $658.2 million as of Dec 31, 2022.
Long-term debt was $6,484.5 million as of Jun 30, 2023, higher than $6,615.5 million as of Dec 31, 2022.
Guidance
Essential Utilities reaffirmed its 2023 earnings in the range of $1.85-$1.90 per share. The mid-point of the guidance range is a tad higher than the Zacks Consensus Estimate of $1.86 per share.
The company expects its customer base in the water segment to expand by 2-3% through acquisitions and organic customer growth.
Essential Utilities also plans to invest $1.1 billion in 2023 and $3.3 billion through 2025 to improve the water and natural gas systems and better serve customers using improved information technology.
The company expects a compound annual growth rate of 6 to 7% through 2025 and 8 to 10% through 2025 for its regulated water and regulated natural gas segments, respectively.
Zacks Rank
Currently, Essential Utilities carries a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Releases
American Water Works Company AWK posted second-quarter 2023 operating earnings per share of $1.44, which surpassed the Zacks Consensus Estimate of $1.27 by 13.4%.
The Long-term (three- to five-year) earnings growth of American Water Works is pegged at 8.18%. The Zacks Consensus Estimate for AWK’s 2023 earnings per share of $4.78 suggests year-over-year growth of nearly 6%.
California Water Service Group CWT recorded second-quarter 2023 adjusted earnings of 17 cents per share, which missed the Zacks Consensus Estimate of 91 cents by 81.3%.
The Zacks Consensus Estimate for CWT’s 2023 earnings per share of $1.85 suggests year-over-year growth of 4.5%.
Middlesex Water MSEX came out with quarterly earnings of 55 cents per share, in line with the Zacks Consensus Estimate.
The Zacks Consensus Estimate for MSEX’s 2023 earnings per share of $2.23 suggests a year-over-year decline of 6.7%.
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