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Essential (WTRG) Q2 Earnings and Revenues Surpass Estimates

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Essential Utilities Inc. (WTRG - Free Report) reported second-quarter 2021 earnings per share of 32 cents, which surpassed the Zacks Consensus Estimate of 29 cents by 10.3%.

The reported earnings figure was 10.3% higher than 29 cents per share recorded in the year-ago quarter.

Total Revenues

Second-quarter revenues of $397 million were up 3.3% year over year. The year-over-year improvement in total revenues was due to increased volume, growth and rate along with surcharge increases in the regulated water segment.

Revenues for the reported quarter surpassed the Zacks Consensus Estimate of $395 million marginally by 0.5%.

Essential Utilities Inc. Price, Consensus and EPS Surprise


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 acquisitions. The pipeline of potential water and wastewater municipal acquisitions, which Essential is actively pursuing, represents nearly 390,000 total customers or equivalent dwelling units.

To date in 2021, the regulated water segment received rate awards in different jurisdictions, which led to an increase in annualized revenues of the company by $16.7 million. Essential’s regulated natural gas segment has received rate awards or infrastructure surcharges in Pennsylvania and Kentucky, estimated to increase annualized revenues by $1.3 million. The company currently has proceedings pending for the water and gas segment, which is estimated to add $17.8 million to annual revenues, if approved.

Operation and maintenance expenses decreased 0.9% year over year to $127.5 million.

Operating income for the reported quarter was $129.4 million, up 5.1% year over year.

Interest expenses increased 0.8% to $52.1 million from $51.7 million in the year-ago quarter.

Financial Highlights

Current assets were $304.7 million as of Jun 30, 2021, compared with $380.2 million as of Dec 31, 2020. Long-term debt was $5,648.2 million as of Jun 30, 2021, higher than $5,507.8 million as of Dec 31, 2020.

Essential invested $404.6 million in the first half of 2021 to improve regulated water and natural gas infrastructure systems. The company remains on track to invest nearly $1 billion in 2021 to replace and expand its water and wastewater utility infrastructure as well as replace and upgrade its natural gas utility infrastructure.


The company reaffirmed its 2021 earnings guidance at $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. Essential expects earnings per share growth (CAGR) of 5-7% for 2020 through 2023.

It expects the customer base from the water segment to expand 2-3% on the back of 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.

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.

Other Releases

American Water Works Company (AWK - Free Report) posted second-quarter 2021 earnings of $1.14 per share, beating the Zacks Consensus Estimate of $1.08 by 5.6%.

American States Water Company (AWR - Free Report) reported second-quarter 2021 operating earnings of 72 cents per share, which surpassed the Zacks Consensus Estimate of 70 cents by 2.9%.

California Water Service (CWT - Free Report) recorded second-quarter 2021 earnings of 75 cents per share, outperforming the Zacks Consensus Estimate of 37 cents by 102.7%.

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