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Essential Utilities (WTRG) Q1 Earnings Miss Estimates, Sales Up

Essential Utilities Inc. WTRG reported first-quarter 2023 operating earnings per share (EPS) of 72 cents, which lagged the Zacks Consensus Estimate of 74 cents by 2.7%. The bottom line also missed the year-ago quarter’s earnings of 76 cents by 5.3%.

Earnings gained from rates and surcharges and regulated water segment customer growth, which were offset by decreased regulated natural gas segment volume and other items.

Total Revenues

First-quarter operating revenues of $726 million surpassed the Zacks Consensus Estimate of $712 million by 2%. Total revenues improved 3.9% year over year.

Essential Utilities Inc. Price, Consensus and EPS Surprise

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

Essential Utilities continues to expand operations through acquisitions. On Mar 31, 2023, the company’s subsidiary, Aqua Pennsylvania, acquired the North Heidelberg Sewer Company and added nearly 270 wastewater customers.

Essential Utilities has signed eight purchase agreements to acquire nine additional water and wastewater systems that are expected to serve 219,000 retail customers or equivalent dwelling units for $380 million.

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The company invested nearly $243.7 million in the first quarter of 2023 to improve its regulated water and natural gas infrastructure systems and to enhance customer service across its operations.

In 2023 so far, the company’s regulated water segment has received rate awards or infrastructure surcharges in Illinois, Indiana, Ohio and Virginia of $3.6 million.

Operation and maintenance expenses for the first quarter were $137.9 million, down 3.3% from the year-ago figure of $142.6 million.

Operating income was $225.5 million, down 0.9% year over year.

Interest expenses increased 35.4% to $72.7 million from $53.6 million in the year-ago quarter.

Financial Highlights

Current assets were $509.8 million as of Mar 31, 2023, compared with $658.2 million as of Dec 31, 2022.

Long-term debt was $6,484.5 million as of Mar 31, 2023, higher than $6,371.1 million as of Dec 31, 2022.

Guidance

Essential Utilities reaffirmed its 2023 earnings in the range of $1.85-$1.90 per share. The mid-point of the guidance range is a tad higher than the Zacks Consensus Estimate of $1.86 per share.

The company expects its customer base in the water segment to expand 2-3% on acquisitions and organic customer growth.

Essential Utilities also plans to invest $1.1 billion in 2023 and $3.3 billion through 2025 to improve the water and natural gas systems and better serve customers using improved information technology.

The company expects a compound annual growth rate of 6 to 7% through 2025 and 8 to 10% through 2025 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.

Other Releases

American Water Works Company AWK posted first-quarter 2023 operating earnings per share (EPS) of 91 cents, which lagged the Zacks Consensus Estimate of 92 cents by 1.09%.

Long-term (three- to five-year) earnings growth of American Water Works is pegged at 8.2%. The Zacks Consensus Estimate for AWK’s 2023 earnings per share of $4.77 suggests year-over-year growth of 5.8%.

California Water Service Group CWT recorded a first-quarter 2023 adjusted loss of 40 cents per share, which missed the Zacks Consensus Estimate of earnings of 8 cents by 600%.

The Zacks Consensus Estimate for CWT’s 2023 earnings per share of $1.87 suggests year-over-year growth of 5.7%.

Primo Water Corporation PRMW came out with quarterly earnings of 9 cents per share, missing the Zacks Consensus Estimate of 11 cents per share.

The Zacks Consensus Estimate for PRMW’s 2023 earnings per share of 84 cents suggests year-over-year growth of 25.4%.

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California Water Service Group (CWT) : Free Stock Analysis Report

Primo Water Corporation (PRMW) : Free Stock Analysis Report

Essential Utilities Inc. (WTRG) : Free Stock Analysis Report

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