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Essential Utilities (WTRG) Q1 Earnings and Sales Lag Estimates
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Essential Utilities Inc. (WTRG - Free Report) delivered first-quarter 2024 operating earnings per share (EPS) of 73 cents, which lagged the Zacks Consensus Estimate of 76 cents by 3.9%. The bottom line beat the year-ago quarter’s earnings of 72 cents by a penny.
GAAP EPS was 92 cents compared with 72 cents in the year-earlier quarter. The difference between GAAP and operating earnings was due to one-time gain of $91.2 million for the sale of the three energy projects.
Total Revenues
Operating revenues of $612.1 million lagged the Zacks Consensus Estimate of $747 million by 28.1%. Total revenues were down 15.8% year over year.
Essential Utilities Inc. Price, Consensus and EPS Surprise
Operation and maintenance expenses were $136.9 million, down 0.7% from the year-ago figure of $137.9 million.
Operating income was $230.9 million, up 2.4% year over year. Interest expenses increased 0.8% to $73.3 million from $72.7 million in the prior-year quarter.
Essential Utilities signed six purchase agreements to acquire additional wastewater systems that will add 215,000 retail customers or equivalent dwelling units.
As of May 1, 2024, the company’s regulated water segment received rate awards or infrastructure surcharges in Illinois, North Carolina, Ohio and Pennsylvania of $13.7 million. Its regulated natural gas segment received infrastructure surcharges in Kentucky and Pennsylvania of $1.0 million.
Financial Highlights
Current assets were $419.5 million as of Mar 31, 2024, compared with $492 million as of Dec 31, 2023.
Long-term debt was $6.85 billion as of Mar 31, 2024, higher than $6.82 billion as of Dec 31, 2023.
Guidance
Essential Utilities now expects to exceed its 2024 EPS guidance in the range of $1.96-$2, taking into consideration the gain on sale of energy plant assets in the first quarter. The Zacks Consensus Estimate for EPS is pegged at $2, higher than the midpoint of the company’s guided range.
Management anticipates its customer base in the water segment to expand by 2-3% through acquisitions and organic customer growth.
The company is on track to invest $1.3-$1.4 billion in its infrastructure in 2024. 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 projects 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 #4 (Sell).
American States Water Co. (AWR - Free Report) is set to report first-quarter 2024 earnings on May 7, after market close. The Zacks Consensus Estimate for American States Water’s EPS is pinned at 59 cents, suggesting growth of 9.3% from the year-ago quarter.
Global Water Resources Inc. (GWRS - Free Report) is scheduled to report first-quarter 2024 earnings on May 9. The Zacks Consensus Estimate for Global Water Resources’ EPS is pegged at 4 cents, indicating a rise of 33.3% from the prior-year levels.
Primo Water Corporation (PRMW - Free Report) is slated to report first-quarter 2024 earnings on May 9. The Zacks Consensus Estimate for Primo Water’s EPS is pegged at 14 cents, implying a jump of 55.6% from the year-earlier actuals.
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Essential Utilities (WTRG) Q1 Earnings and Sales Lag Estimates
Essential Utilities Inc. (WTRG - Free Report) delivered first-quarter 2024 operating earnings per share (EPS) of 73 cents, which lagged the Zacks Consensus Estimate of 76 cents by 3.9%. The bottom line beat the year-ago quarter’s earnings of 72 cents by a penny.
GAAP EPS was 92 cents compared with 72 cents in the year-earlier quarter. The difference between GAAP and operating earnings was due to one-time gain of $91.2 million for the sale of the three energy projects.
Total Revenues
Operating revenues of $612.1 million lagged the Zacks Consensus Estimate of $747 million by 28.1%. Total revenues were down 15.8% 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
Operation and maintenance expenses were $136.9 million, down 0.7% from the year-ago figure of $137.9 million.
Operating income was $230.9 million, up 2.4% year over year. Interest expenses increased 0.8% to $73.3 million from $72.7 million in the prior-year quarter.
Essential Utilities signed six purchase agreements to acquire additional wastewater systems that will add 215,000 retail customers or equivalent dwelling units.
As of May 1, 2024, the company’s regulated water segment received rate awards or infrastructure surcharges in Illinois, North Carolina, Ohio and Pennsylvania of $13.7 million. Its regulated natural gas segment received infrastructure surcharges in Kentucky and Pennsylvania of $1.0 million.
Financial Highlights
Current assets were $419.5 million as of Mar 31, 2024, compared with $492 million as of Dec 31, 2023.
Long-term debt was $6.85 billion as of Mar 31, 2024, higher than $6.82 billion as of Dec 31, 2023.
Guidance
Essential Utilities now expects to exceed its 2024 EPS guidance in the range of $1.96-$2, taking into consideration the gain on sale of energy plant assets in the first quarter. The Zacks Consensus Estimate for EPS is pegged at $2, higher than the midpoint of the company’s guided range.
Management anticipates its customer base in the water segment to expand by 2-3% through acquisitions and organic customer growth.
The company is on track to invest $1.3-$1.4 billion in its infrastructure in 2024. 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 projects 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 #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
American States Water Co. (AWR - Free Report) is set to report first-quarter 2024 earnings on May 7, after market close. The Zacks Consensus Estimate for American States Water’s EPS is pinned at 59 cents, suggesting growth of 9.3% from the year-ago quarter.
Global Water Resources Inc. (GWRS - Free Report) is scheduled to report first-quarter 2024 earnings on May 9. The Zacks Consensus Estimate for Global Water Resources’ EPS is pegged at 4 cents, indicating a rise of 33.3% from the prior-year levels.
Primo Water Corporation (PRMW - Free Report) is slated to report first-quarter 2024 earnings on May 9. The Zacks Consensus Estimate for Primo Water’s EPS is pegged at 14 cents, implying a jump of 55.6% from the year-earlier actuals.