We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Essential Utilities (WTRG) Down 3.6% Since Last Earnings Report?
Read MoreHide Full Article
It has been about a month since the last earnings report for Essential Utilities (WTRG - Free Report) . Shares have lost about 3.6% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Essential Utilities due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Essential Utilities Q2 Earnings in Line With Estimates
Essential Utilities Inc. reported second-quarter 2022 operating earnings per share (EPS) of 31 cents, which is in line with the Zacks Consensus Estimate. The bottom line missed the year-ago quarter’s earnings of 32 cents per share by a penny.
Earnings were driven by increased volume in its regulated natural gas segment, along with customer growth, increased volume and regulated water rates in its regulated water segment, which were offset by increased expenses and other items.
Total Revenues
Second-quarter operating revenues of $448.7 million surpassed the Zacks Consensus Estimate of $413 million by 8.6%.
Total revenues improved nearly 13% year over year. The year-over-year improvement in total revenues was due to the recovery of purchased gas costs, customer growth and volume from the regulated water segment and volume increase from the regulated natural gas segment.
Highlights of the Release
Essential Utilities continues to expand operations through acquisitions. The potential water and wastewater municipal acquisitions, once completed, will add nearly 410,000 customers to the existing customer base.
Currently, Essential Utilities has seven signed purchase agreements to acquire additional water and wastewater systems that are expected to serve nearly 224,000 retail customers or equivalent dwelling units and add around $418 million in rate base in three of its existing states.
Year to date, Essential Utilities’ regulated water segment received rate awards or infrastructure surcharges in Illinois, North Carolina, Ohio and Pennsylvania of $77.8 million, and the regulated natural gas segment received a rate award of $5.5 million in Kentucky.
Operation and maintenance expenses for the second quarter were $311.1 million, up 16.2% from the year-ago figure of $267.7 million.
Operating income was $137.7 million, down 2.1% year over year.
Interest expenses increased 5.9% to $55.2 million from $52.1 million in the year-ago quarter.
Financial Highlights
Current assets were $413.3 million as of Jun 30, 2022, compared with $437.8 million as of Dec 31, 2021. Long-term debt was $6,087.7 million as of Jun 30, 2022, higher than $5,779.5 million as of Dec 31, 2021.
Essential Utilities invested $424.6 million in the first half of 2022 to replace and expand the water and wastewater utility infrastructure, as well as upgrade the natural gas utility infrastructure.
Guidance
Essential Utilities reiterated the 2022 earnings guidance at $1.75-$1.80 per share. The mid-point of the earnings guidance is on par with the Zacks Consensus Estimate of $1.78 per share. WTRG expects EPS growth of 5-7% between 2021 and 2024.
For 2022, Essential Utilities expects its customer base from the water segment to expand 2-3% due to acquisitions and organic customer growth.
Essential Utilities also plans to invest $1 billion in 2022 and $3 billion through 2024 to improve the water and natural gas systems, and better serve customers through the use of improved information technology.
How Have Estimates Been Moving Since Then?
Estimates revision followed a downward path over the past two months.
VGM Scores
Currently, Essential Utilities has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Essential Utilities has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Essential Utilities (WTRG) Down 3.6% Since Last Earnings Report?
It has been about a month since the last earnings report for Essential Utilities (WTRG - Free Report) . Shares have lost about 3.6% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Essential Utilities due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Essential Utilities Q2 Earnings in Line With Estimates
Essential Utilities Inc. reported second-quarter 2022 operating earnings per share (EPS) of 31 cents, which is in line with the Zacks Consensus Estimate. The bottom line missed the year-ago quarter’s earnings of 32 cents per share by a penny.
Earnings were driven by increased volume in its regulated natural gas segment, along with customer growth, increased volume and regulated water rates in its regulated water segment, which were offset by increased expenses and other items.
Total Revenues
Second-quarter operating revenues of $448.7 million surpassed the Zacks Consensus Estimate of $413 million by 8.6%.
Total revenues improved nearly 13% year over year. The year-over-year improvement in total revenues was due to the recovery of purchased gas costs, customer growth and volume from the regulated water segment and volume increase from the regulated natural gas segment.
Highlights of the Release
Essential Utilities continues to expand operations through acquisitions. The potential water and wastewater municipal acquisitions, once completed, will add nearly 410,000 customers to the existing customer base.
Currently, Essential Utilities has seven signed purchase agreements to acquire additional water and wastewater systems that are expected to serve nearly 224,000 retail customers or equivalent dwelling units and add around $418 million in rate base in three of its existing states.
Year to date, Essential Utilities’ regulated water segment received rate awards or infrastructure surcharges in Illinois, North Carolina, Ohio and Pennsylvania of $77.8 million, and the regulated natural gas segment received a rate award of $5.5 million in Kentucky.
Operation and maintenance expenses for the second quarter were $311.1 million, up 16.2% from the year-ago figure of $267.7 million.
Operating income was $137.7 million, down 2.1% year over year.
Interest expenses increased 5.9% to $55.2 million from $52.1 million in the year-ago quarter.
Financial Highlights
Current assets were $413.3 million as of Jun 30, 2022, compared with $437.8 million as of Dec 31, 2021. Long-term debt was $6,087.7 million as of Jun 30, 2022, higher than $5,779.5 million as of Dec 31, 2021.
Essential Utilities invested $424.6 million in the first half of 2022 to replace and expand the water and wastewater utility infrastructure, as well as upgrade the natural gas utility infrastructure.
Guidance
Essential Utilities reiterated the 2022 earnings guidance at $1.75-$1.80 per share. The mid-point of the earnings guidance is on par with the Zacks Consensus Estimate of $1.78 per share. WTRG expects EPS growth of 5-7% between 2021 and 2024.
For 2022, Essential Utilities expects its customer base from the water segment to expand 2-3% due to acquisitions and organic customer growth.
Essential Utilities also plans to invest $1 billion in 2022 and $3 billion through 2024 to improve the water and natural gas systems, and better serve customers through the use of improved information technology.
How Have Estimates Been Moving Since Then?
Estimates revision followed a downward path over the past two months.
VGM Scores
Currently, Essential Utilities has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Essential Utilities has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.