Essential Utilities (WTRG) Q4 Earnings Beat, Revenues Lag
Essential Utilities Inc. WTRG delivered fourth-quarter 2023 operating earnings per share (EPS) of 50 cents, which surpassed the Zacks Consensus Estimate by a penny. The bottom line beat the year-ago quarter’s earnings of 44 cents by 13.6%.
WTRG reported earnings of $1.86 per share for 2023 compared with $1.77 per share in 2022, which reflects a year-over-year increase of 5%.
Total Revenues
Fourth-quarter operating revenues of $479.4 million lagged the Zacks Consensus Estimate of $667 million by 28.1%. Total revenues were down 32% year over year.
WTRG reported total revenues of nearly $2 billion for 2023 compared with $2.3 billion in 2022, which reflects a year-over-year decrease of 10.5%.
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 $1.2 billion in 2023 to improve its regulated water and natural gas infrastructure systems and enhance customer service across its operations.
Essential Utilities continues to expand operations through acquisitions. In 2023, the company acquired seven systems that collectively added more than $44.5 million to the rate base and more than 11,000 new customers or equivalent dwelling units to the company’s portfolio.
Essential Utilities signed six purchase agreements to acquire additional wastewater systems that will add 215,000 retail customers or equivalent dwelling units.
In 2023, the company’s regulated water segment received rate awards or infrastructure surcharges worth $47.2 million. WTRG’s regulated natural gas segment received infrastructure surcharges worth $21.3 million.
Operation and maintenance expenses for the fourth quarter were $157 million, down 15% from the year-ago figure of $184.7 million.
Operating income was $173.9 million, up 2.3% year over year.
Interest expenses increased 6.1% to $72.9 million from $68.7 million in the year-ago quarter.
Financial Highlights
Current assets were $492 million as of Dec 31, 2023 compared with $658.1 million as of Dec 31, 2022.
Long-term debt was $6.8 billion as of Dec 31, 2023, higher than $6.3 billion as of Dec 31, 2022.
Guidance
Essential Utilities expects its 2024 EPS guidance in the range of $1.96-$2. The Zacks Consensus Estimate for earnings is pegged at $2.05 per share, higher than the midpoint and the company’s guided range.
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 $7.2 billion through 2024-2028 to improve the water and natural gas systems and better serve customers using improved information technology.
WTRG expects a compound annual growth rate of 8% and 10% through 2028 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 fourth-quarter 2023 operating EPS of 88 cents, which surpassed the Zacks Consensus Estimate of 84 cents by 4.7%.
The long-term (three to five years) earnings growth rate of American Water Works is pegged at 7.76%. The Zacks Consensus Estimate for AWK’s 2024 earnings stands at $5.20 per share, calling for a year-over-year improvement of 6.12%.
American States Water Company AWR came out with quarterly earnings of 55 cents per share, which surpassed the Zacks Consensus Estimate of 53 cents by 3.7%.
The long-term earnings growth rate of AWR is pegged at 6.3%. The Zacks Consensus Estimate for AWR’s 2024 earnings is pegged at $2.96 per share, implying a year-over-year improvement of 3.86%.
Upcoming Release
California Water Service Group CWT to report fourth-quarter 2023 results on Feb 29 before market close. The Zacks Consensus Estimate for earnings is pegged at $1.5 per share, indicating a year-over-year increase of 328.57%.
The Zacks Consensus Estimate for CWT’s 2024 earnings is pegged at $2.25 per share, implying a year-over-year improvement of 17.97%.
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American Water Works Company, Inc. (AWK) : Free Stock Analysis Report
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Essential Utilities Inc. (WTRG) : Free Stock Analysis Report
