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Essential (WTRG) Q4 Earnings Match Estimates, Revenues Lag
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Essential Utilities Inc. (WTRG - Free Report) reported fourth-quarter 2020 earnings per share of 46 cents, on par with the Zacks Consensus Estimate. The reported earnings were 35.3% higher than 34 cents per share recorded in the year-ago quarter.
GAAP earnings per share for the reported quarter were 40 cents compared with 28 cents in the year-ago period.
Total Revenues
Fourth-quarter revenues of $474 million were up 109.7% year over year. The year-over-year improvement in total revenues was due to contribution from its acquired natural gas assets, increased volume, growth and rate, along with surcharge increases in the regulated water segment. However, total revenues for the reported quarter missed the Zacks Consensus Estimate by 12.4%.
Essential Utilities Inc. Price, Consensus and EPS Surprise
The company continues to expand operations through strategic acquisitions. In 2020, Essential invested nearly $62.9 million to acquire six water and wastewater systems. These acquisitions added approximately 12,000 new customers. Backed by organic growth, total water and wastewater customer base expanded 2% year over year, with 20,500 new customer connections.
In 2020, the regulated water segment received rate awards in different jurisdictions that led to an increase in annualized revenues of the company by $21 million. The regulated natural gas segment received rate awards in the said period that further boosted annualized revenues by $1 million. Year to date, its regulated water segment received rate awards in New Jersey, North Carolina, Ohio and Pennsylvania of $8.5 million. The company currently has rate proceedings pending in Virginia and Indiana worth $1.8 million.
Operation and maintenance expenses increased 84.3% year over year to $157.2 million. This was attributed to an increase in Peoples transaction-related costs, and the regulated natural gas segment’s operation as well as maintenance expenses.
Operating income for the reported quarter was $132.9 million, up 55.8% year over year.
Interest expenses increased 56.5% to $51.8 million from $33.1 million in the year-ago quarter.
Financial Highlights
Current assets were $380.2 million as of Dec 31, 2020 compared with $2,015.1 million in the corresponding period of 2019. Long-term debt was $5,507.8 million as of Dec 31, 2020, higher than $2,943.3 million in the comparable period of 2019.
Essential invested $900 million in 2020 to improve regulated water and natural gas infrastructure systems.
Guidance
The company issued its 2021 earnings guidance in the range of $1.64-$1.69 per share. The mid-point of the earnings guidance is on par with the corresponding Zacks Consensus Estimate of $1.67 per share.
It expects the customer base from the water segment to expand 2-3% from acquisitions and organic customer growth.
The company plans to invest $550 million in the regulated water segment and $450 million in the regulated gas segment in 2021. This capital expenditure is part of its total investment plan of $3 billion through 2023.
Other Releases
American States Water Company (AWR - Free Report) reported fourth-quarter 2020 operating earnings of 54 cents per share, which surpassed the Zacks Consensus Estimate of 49 cents by 10.2%.
SJW Group (SJW - Free Report) reported fourth-quarter 2020 operating earnings of 46 cents per share, which surpassed the Zacks Consensus Estimate of 34 cents by 35.3%.
American Water Works (AWK - Free Report) reported fourth-quarter 2020 earnings per share of 80 cents, on par with the Zacks Consensus Estimate.
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Essential (WTRG) Q4 Earnings Match Estimates, Revenues Lag
Essential Utilities Inc. (WTRG - Free Report) reported fourth-quarter 2020 earnings per share of 46 cents, on par with the Zacks Consensus Estimate. The reported earnings were 35.3% higher than 34 cents per share recorded in the year-ago quarter.
GAAP earnings per share for the reported quarter were 40 cents compared with 28 cents in the year-ago period.
Total Revenues
Fourth-quarter revenues of $474 million were up 109.7% year over year. The year-over-year improvement in total revenues was due to contribution from its acquired natural gas assets, increased volume, growth and rate, along with surcharge increases in the regulated water segment. However, total revenues for the reported quarter missed the Zacks Consensus Estimate by 12.4%.
Essential Utilities Inc. Price, Consensus and EPS Surprise
Essential Utilities Inc. price-consensus-eps-surprise-chart | Essential Utilities Inc. Quote
Highlights of the Release
The company continues to expand operations through strategic acquisitions. In 2020, Essential invested nearly $62.9 million to acquire six water and wastewater systems. These acquisitions added approximately 12,000 new customers. Backed by organic growth, total water and wastewater customer base expanded 2% year over year, with 20,500 new customer connections.
In 2020, the regulated water segment received rate awards in different jurisdictions that led to an increase in annualized revenues of the company by $21 million. The regulated natural gas segment received rate awards in the said period that further boosted annualized revenues by $1 million. Year to date, its regulated water segment received rate awards in New Jersey, North Carolina, Ohio and Pennsylvania of $8.5 million. The company currently has rate proceedings pending in Virginia and Indiana worth $1.8 million.
Operation and maintenance expenses increased 84.3% year over year to $157.2 million. This was attributed to an increase in Peoples transaction-related costs, and the regulated natural gas segment’s operation as well as maintenance expenses.
Operating income for the reported quarter was $132.9 million, up 55.8% year over year.
Interest expenses increased 56.5% to $51.8 million from $33.1 million in the year-ago quarter.
Financial Highlights
Current assets were $380.2 million as of Dec 31, 2020 compared with $2,015.1 million in the corresponding period of 2019. Long-term debt was $5,507.8 million as of Dec 31, 2020, higher than $2,943.3 million in the comparable period of 2019.
Essential invested $900 million in 2020 to improve regulated water and natural gas infrastructure systems.
Guidance
The company issued its 2021 earnings guidance in the range of $1.64-$1.69 per share. The mid-point of the earnings guidance is on par with the corresponding Zacks Consensus Estimate of $1.67 per share.
It expects the customer base from the water segment to expand 2-3% from acquisitions and organic customer growth.
The company plans to invest $550 million in the regulated water segment and $450 million in the regulated gas segment in 2021. This capital expenditure is part of its total investment plan of $3 billion through 2023.
Other Releases
American States Water Company (AWR - Free Report) reported fourth-quarter 2020 operating earnings of 54 cents per share, which surpassed the Zacks Consensus Estimate of 49 cents by 10.2%.
SJW Group (SJW - Free Report) reported fourth-quarter 2020 operating earnings of 46 cents per share, which surpassed the Zacks Consensus Estimate of 34 cents by 35.3%.
American Water Works (AWK - Free Report) reported fourth-quarter 2020 earnings per share of 80 cents, on par with the Zacks Consensus Estimate.
Zacks Rank
Currently, Essential carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Click here for the 4 trades >>