Essential Utilities Q3 revenue rises on regulatory recoveries, higher gas costs
Overview
U.S. water and gas utility's Q3 adjusted EPS beat analyst expectations
Q3 revenue rose 6.6% yr/yr, driven by regulatory recoveries and purchased gas costs
Company continues progress on proposed merger with American Water
Outlook
Essential Utilities expects to invest $1.7 bln in infrastructure in 2026
Company anticipates closing merger with American Water in Q1 2027
Operations and maintenance expenses for the full year expected to be in line with historic norms
Result Drivers
REGULATORY RECOVERIES - Co said regulatory recoveries were a main driver of revenue growth in both water and natural gas segments
PURCHASED GAS COSTS - Higher purchased gas costs contributed to increased revenues in natural gas segment
INSURANCE RECOVERIES - Lower operations and maintenance expenses were partly due to insurance recoveries recognized in the quarter
Company press release:
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q3 Revenue | Beat | $508.26 mln | $450.44 mln (2 Analysts) |
Q3 Adjusted EPS | Beat | $0.38 | $0.35 (3 Analysts) |
Q3 Net Income | $103.84 mln | ||
Q3 Operating income | $192.70 mln | ||
Q3 Pretax Profit | $110.47 mln |
Analyst Coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 3 "strong buy" or "buy", 3 "hold" and 1 "sell" or "strong sell"
The average consensus recommendation for the water & related utilities peer group is "buy."
Wall Street's median 12-month price target for Essential Utilities Inc is $39.00, about 11.4% below its November 3 closing price of $44.04
The stock recently traded at 19 times the next 12-month earnings vs. a P/E of 17 three months ago
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)