Essential Utilities (WTRG) Q3 Earnings Surpass Estimates
Essential Utilities Inc. WTRG delivered third-quarter 2023 operating earnings per share (“EPS”) of 30 cents, which surpassed the Zacks Consensus Estimate by a penny. The bottom line beat the year-ago quarter’s earnings of 26 cents by 15.4%.
Earnings during the quarter benefited from higher revenues from regulatory recoveries and lower expenses were marginally offset by decreased volume from the regulated water segment.
Total Revenues
Third-quarter operating revenues of $411.3 million lagged the Zacks Consensus Estimate of $462 million by 10.9%. Total revenues were down 5.4% 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 invested nearly $874.5 million in the first nine months of 2023 to improve its regulated water and natural gas infrastructure systems and to enhance customer service across its operations.
Essential Utilities continues to expand operations through acquisitions. Year-to-date 2023, the company has acquired seven systems that have collectively added more than $44.5 million in rate base and more than 11,000 new customers or equivalent dwelling units to the company’s portfolio.
Essential Utilities signed five purchase agreements to acquire additional water and wastewater systems that will add 211,000 retail customers or equivalent dwelling units to its existing customer base for $354 million.
Year-to-date 2023, the company’s regulated water segment has received rate awards or infrastructure surcharges worth $42.4 million and its regulated natural gas segment has received infrastructure surcharges worth $21.3 million.
Operation and maintenance expenses for the third quarter were $147.1 million, down 2.8% from the year-ago figure of $151.4 million.
Operating income was $137.4 million, up 9.1% year over year.
Interest expenses increased 13.4% to $68.6 million from $60.5 million in the year-ago quarter.
Financial Highlights
Current assets were $409.4 million as of Sep 30, 2023 compared with $658.2 million as of Dec 31, 2022.
Long-term debt was $6,456.1 million as of Sep 30, 2023, lower 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.
WTRG expects a compound annual growth rate of 6-7% through 2025 and 8-10% through 2025 for its regulated water and regulated natural gas segments, respectively.
Zacks Rank
Currently, Essential Utilities carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Releases
American Water Works Company AWK posted third-quarter 2023 operating earnings per share of $1.66, which surpassed the Zacks Consensus Estimate of $1.55 by 7.1%.
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 $4.81 suggests an increase of 0.4% in the past 60 days.
California Water Service Group CWT recorded third-quarter 2023 adjusted earnings of 60 cents per share, which surpassed the Zacks Consensus Estimate of 54 cents by 11.1%.
The Zacks Consensus Estimate for CWT’s 2023 earnings per share of $1.91 suggests an increase of 3.3% in the past 90 days.
American States Water Company AWR came out with quarterly earnings of 85 cents per share, which surpassed the Zacks Consensus Estimate of 82 cents by 3.7%.
The Zacks Consensus Estimate for AWR’s 2023 earnings per share of $2.96 suggests an increase of 0.3% in the past 90 days. The long-term (three- to five-year) earnings growth of AWR is pegged at 6.3%.
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