Essential Utilities — May 12, 2025 release
Fiscal 2025 first-quarter results · 8-K Item 2.02 · Exhibit 99.1 · 0001552781-25-000176
Showing in the filing
Long-term earnings per share growth rate
“compounded annual growth rate of 5 to 7% from the adjusted 2024 earnings per share of $1.97 (Non-GAAP)”
Period
The long term
Measure
GAAP-tied
Source
Prose
All guidance in this release · 16
Diluted earnings per share for FY2025
“$2.07 to $2.11”
Quarterly cash dividend for FY2025
“$0.3255 per share”
Quarterly cash dividend
“$0.3255 per share of common stock”
Long-term earnings per share growth rate for the long term
“compounded annual growth rate of 5 to 7% from the adjusted 2024 earnings per share of $1.97 (Non-GAAP)”
Long-term earnings per share compounded annu… for the long term
“5 to 7%”
Regulated infrastructure investments for FY2025
“$1.4 to $1.5 billion”
Regulated infrastructure investments for FY2029
“approximately $7.8 billion”
Regulated water segment rate base compounded… for FY2029
“approximately 6%”
Regulated natural gas segment rate base comp… for FY2029
“approximately 11%”
Combined regulated utility rate base compoun… for FY2029
“over 8%”
Regulated water customer base (equivalent dw… for the long term
“between 2 and 3%”
Regulated natural gas customer base for FY2025
“stable”
Equity raise via ATM program for FY2027
“expects to raise equity via its ATM program”
Equity raised via ATM program for FY2025
“approximately $315 million”
Reduction of Scope 1 and Scope 2 greenhouse … for FY2035
“60%”
Multiyear plan for finished water PFAS compl… for the long term
“does not exceed the federal maximum contaminant level of the six EPA-regulated PFAS chemicals”
Exhibit 99.1 · full document
Exhibit 99.1
Essential
Utilities Reports Strong First Quarter 2025 Results,
2025 Guidance
and Long-Term Targets Affirmed
· Earnings
per share of $1.03 for Q1 2025 vs. $0.97 for Q1 2024
· 2025
earnings per share guidance range of $2.07 to $2.11 affirmed
· Long-term
targets also affirmed
· Invested
$270.5 million in the first three months of the year; on track to invest $1.4 to $1.5
Billion in infrastructure in 2025
· Closed
on acquisition of utility assets from the Village of Midvale, OH
BRYN MAWR, Pa. (May 12, 2025)
– Essential Utilities Inc. (NYSE: WTRG) today reported results for the first quarter ended March 31, 2025. Essential’s
net income of $283.8 million or $1.03 per share for the first quarter of 2025 compared favorably to $265.8 million or $0.97 per
share reported for the first quarter of 2024.
“We’re
off to a great start to the year,” said Essential Utilities Chairman and Chief Executive Officer Christopher Franklin. “Our
investments in infrastructure have set the stage for achieving our expected growth in 2025 and beyond. We are excited to also
announce that, for the third consecutive year, we have been named to USA Today’s annual list of Climate Leaders. We are
proud that our commitment to protecting and providing essential resources for life continues to be recognized”.
First Quarter 2025 Operating
Results
Essential reported net income
of $283.8 million and earnings per share of $1.03 for the first quarter of 2025, compared to net income of $265.8 million and
earnings per share of $0.97 for the same period in 2024. Comparing this quarter’s earnings to those of first quarter of
2024, increased revenues from regulatory recoveries, higher regulated natural gas segment volumes, and lower expenses, and a higher
tax benefit were partially offset by a prior year gain on the sale of the combined-heat-and-power business valued at 24 cents
per share.
Revenues for the quarter were $783.6
million compared to $612.1 million in the first quarter of 2024, an increase of 28%. Additional revenues from regulatory recoveries,
purchased gas costs, and higher regulated natural gas segment volumes were the primary revenue drivers. Operations and maintenance
expenses increased to $137.8 million for the first quarter 2025, compared to $136.9 million in the first quarter of 2024, primarily
due to an increase in customer assistance surcharge costs in our regulated natural gas segment, which has an equivalent offsetting
amount in revenues, and increases in employee-related costs and production expenses, offset by decreases in bad debt expense,
outside services, and other costs.
Essential’s regulated
water segment reported revenues for the quarter of $300.8 million, an increase of 7.5% compared to $279.9 million in the first
quarter of 2024. Rates and surcharges were the largest contributor to the increase in revenues for the period. Operations and
maintenance expenses for Essential’s regulated water segment decreased to $89.4 million for the first quarter of 2025 compared
to $90.7 million in the first quarter of 2024, driven partially by a decrease in bad debt expense, offset by increased production
costs for water and wastewater operations, and increased employee related costs.
Essential’s regulated
natural gas segment reported revenues for the quarter of $470.8 million, compared to $324.3 million in the first quarter of 2024,
driven primarily by an increase in purchased gas costs and the impact of higher volumes delivered due to colder weather conditions
during the first quarter of 2025 as compared to 2024. Operations and maintenance expenses for Essential’s regulated natural
gas segment increased to $55.7 million for the first quarter of 2025 compared to $45.9 million in the first quarter of 2024 primarily
due to an increase in customer assistance surcharge costs which has an equivalent offsetting amount in revenues; and increases
in labor and employee benefits and increase in legal expenses, offset by a decrease in materials and supplies
Dividend
As previously announced on February
19, 2025, Essential’s board of directors declared a quarterly cash dividend of $0.3255 per share of common stock. This dividend
will be payable on June 2, 2025, to shareholders of record on May 13, 2025. The company has paid a consecutive quarterly cash
dividend for more than 80 years.
Financing
As of March 31, 2025, Essential’s weighted average cost of fixed-rate
long-term debt was 4.02%, and the company had $728 million available on its credit lines.
On August 13, 2024,
Essential established an at-the-market equity sales program (“ATM”), under which it may issue and sell shares of common
stock up to an aggregate offering price of $1.0 billion. During the three months ended March 31, 2025, we issued 1,627,009 shares
of common stock for net proceeds of approximately $63 million. In April 2025, we issued 3,664,762 common shares for net proceeds
of approximately $145 million.
On March 19, 2025, the
Company established a commercial paper program that allows it to issue, through private placement, short-term unsecured commercial
paper notes in an aggregate principal amount not to exceed $1.0 billion. This program, which is backstopped by the Company’s
revolving credit facility, will allow the company to reduce short-term borrowing costs associated with investing in needed infrastructure
investments.
Rate Activity
As of May 9, 2025, the company’s
regulated water segment received rate awards or infrastructure surcharges in Pennsylvania, North Carolina and Ohio, of $89.6 million,
and its regulated natural gas segment received rate awards or infrastructure surcharges in Kentucky of $0.5 million. The company
currently has a base rate case pending in Kentucky for its regulated natural gas segment for an estimated $10.9 million in incremental
annual revenues. In addition, the company has a base rate case pending in North Carolina for its regulated water and wastewater
segment for an estimated $45 million in incremental annual revenues.
Capital Expenditures
Essential invested approximately
$271 million in the first three months of 2025 to improve its regulated water and natural gas infrastructure systems and to enhance
customer service across its operations. The company continues to be a leader in the country at replacing miles of aged underground
utility pipe and is committed to maintaining elevated levels of infrastructure investment. The company is on track to invest between
$1.4 and $1.5 billion in needed infrastructure investments in 2025. From 2025 through 2029, the company plans to invest approximately
$7.8 billion to improve water and natural gas systems and better serve customers through improved information technology. Essential’s
investments during this five-year period include addressing PFAS with at least $450 million in capital projects, replacing and
expanding its water and wastewater utility infrastructure, and replacing and upgrading its natural gas utility infrastructure,
with the latter leading to significant reductions in methane emissions that occur in aged gas pipes. The company is a leader in
remediating PFAS and will comply with the final EPA rule. The capital investments made to rehabilitate and expand the infrastructure
of the communities’ Essential serves are critical to its mission of safely and reliably delivering Earth’s most essential
resources.
Water Utility Growth by Acquisition
Essential’s continued growth
by acquisition allows the company to provide safe and reliable water and wastewater service to a larger customer base than it
could from organic customer growth alone. Since 2015, Essential collectively has acquired over $518 million in rate base
and added more than 129,000 new customers or equivalent dwelling units to the company’s footprint.
In April 2025, the Company
acquired the Village of Midvale’s water system in Ohio, which serves approximately 1,000 customers for approximately $3
million. In January 2025, the Company acquired Greenville Sanitary Authority’s wastewater utility assets, which serve approximately
2,300 customers in Greenville, Pennsylvania for $18 million.
The company has five signed purchase
agreements for additional wastewater systems in Pennsylvania and Texas that are pending closing and are expected to serve over
210,000 customers or equivalent dwelling units and total approximately $340 million in purchase price. The company’s $276.5
million agreement to acquire the Delaware County Regional Water Quality Control Authority (DELCORA), a Pennsylvania sewer authority
that serves approximately 198,000 equivalent dwelling units in the Philadelphia suburbs, is included among these signed purchase
agreements.
The pipeline of potential water and
wastewater municipal acquisitions the company is actively pursuing represents approximately 400,000 total customers.
Multi-Year Financial and Growth
Guidance
The company reaffirms its previously
initiated long-term earnings guidance. The company’s latest expectations are the following:
· 2025
diluted earnings per share guidance range of $2.07 to $2.11.
· Grow
long-term earnings per share at a compounded annual growth rate of 5 to 7% from the adjusted
2024 earnings per share of $1.97 (Non-GAAP) for the three-year period through 2027.
· In
2025, regulated infrastructure investments will be $1.4 to $1.5 billion.
· Through
2029, we plan to make regulated infrastructure investments of approximately $7.8 billion.
· Through
2029, the regulated water segment rate base will grow at a compounded annual growth rate
of approximately 6%; this only includes acquisitions scheduled to close in 2025 and excludes
DELCORA.
· Through
2029, the regulated natural gas segment rate base will grow at a compounded annual growth
rate of approximately 11%.
· Through
2029, the combined regulated utility rate base will grow at a compounded annual growth
rate of over 8%.
· The
regulated water customer base (or equivalent dwelling units) of the business will grow
at an average annual growth rate of between 2 and 3% from acquisitions and organic customer
growth over the long term.
· The
regulated natural gas customer base of the business will be stable for 2025.
· Through
2027, the company expects to raise equity via its ATM program. In 2025, the company expects
to raise a total of approximately $315 million in equity. To date in 2025, the company
has issued approximately $210 million of equity using its ATM.
· Reduction
of Scope 1 and Scope 2 greenhouse gas emissions by 60% by 2035 from the company’s
2019 baseline.
· Multiyear
plan to ensure that finished water does not exceed the federal maximum contaminant level
of the six EPA-regulated PFAS chemicals.
Essential reaffirms its commitment
to substantially reduce Scope 1 and 2 greenhouse gas emissions by 2035. The company plans to achieve these reductions through
extensive gas pipeline replacement, the purchase of renewable energy, accelerated methane leak detection and repair, and various
other planned initiatives. Essential continues to be an industry leader regarding water quality with its commitment to test and
treat for six regulated PFAS chemicals across all states served by its regulated water segment. The company reaffirms its commitment
to providing finished water that will meet the EPA timelines and standards
Guidance Assumptions
Essential Utilities does not
guarantee future results of any kind. Guidance is subject to risks and uncertainties, including, without limitation, those factors
outlined in the “Forward Looking Statements” of this release and the “Risk Factors” section of the company’s
annual and quarterly reports filed with the Securities and Exchange Commission. The earnings per share, infrastructure investment,
and rate base guidance include the signed municipal water and wastewater acquisitions for which the company has entered into signed
purchase agreements as of the date the guidance was announced but do not include DELCORA or other potential municipal acquisitions
from the company’s list of acquisition opportunities that currently represents over 400,000 customer equivalents. While
the company remains confident in its ability to close DELCORA, for guidance purposes, DELCORA has been removed from all guidance
metrics. The company’s guidance includes the expectation that the company will continue to issue equity and debt on an as-needed
basis to support acquisitions and capital investment plans
First Quarter 2025 Earnings Call
Information
Date: May 12, 2025
Time: 11 a.m. EDT (please dial in
by 10:45 a.m.)
Webcast and slide presentation link: https://www.essential.co/events-and-presentations/events-calendar
The call and presentation will be webcast
live so interested parties may listen over the internet by logging on to Essential.co and following the link for Investors .
The conference call will be archived in the Investor Relations section of the company’s website for 90 days following the call.
Additionally, the call will be recorded and made available for replay at 2 p.m. on May 12, 2025, for 10 business days following the call.
To access the audio replay in the U.S., dial 800.770.2030 (pass code 9261648 ). International callers can find their dial in number here
(pass code 9261648 ).
About Essential
Essential
Utilities, Inc. (NYSE: WTRG) delivers safe, clean, reliable services that improve quality of life for individuals, families, and
entire communities. With a focus on water, wastewater and natural gas, Essential is committed to sustainable growth, operational
excellence, a superior customer experience, and premier employer status. We are advocates for the communities we serve and are
dedicated stewards of natural lands, protecting more than 7,600 acres of forests and other habitats throughout our footprint.
Operating as the Aqua and Peoples brands,
Essential serves approximately 5.5 million people across nine states. Essential is one of
the most significant publicly traded water, wastewater service and natural gas providers in the U.S . Learn more at www.essential.co .
Forward-Looking Statements
This release
contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which generally
include words such as “believes,” “expects,” “intends,” “anticipates,” “estimates,”
and similar expressions. The Company can give no assurance that any actual or future results or events discussed in these statements
will be achieved. Any forward-looking statements represent its views only as of today and should not be relied upon as representing
its views as of any subsequent date. Readers are cautioned that such forward-looking statements are subject to a variety of risks
and uncertainties that could cause the company’s actual results to differ materially from the statements contained in this
release. Such forward-looking statements include, among others: the company’s belief that it will comply with the finalized
EPA PFAS rules, the guidance range of net income per diluted common share; the anticipated amount of infrastructure investment
in 2025 through 2029; the rate base growth of company through 2029; that the Company is on track to invest $1.4 to $1.5 billion
in infrastructure in 2025; the reduction of Scope 1 and Scope 2 greenhouse gas emissions by 60% by 2035 from the company’s
2019 baseline; the rate base growth from its organic capital investment program through 2029; the Company’s anticipated
use of its commercial paper program; the Company’s water utility customer base growth at an average annual long term growth
rate of between 2-3% for acquisitions and organic customer growth; that the Company has a multiyear plan to ensure that finished
water does not exceed the federal maximum contaminant level for the six EPA regulated PFAS chemicals; and, the regulated natural
gas customer base of the business will be stable in 2025. There are important factors that could cause actual results to differ
materially from those expressed or implied by such forward-looking statements including: changes in the EPAs regulations; changes
in the United States’ governmental policies, including those from the Executive Branch; disruptions in the global economy;
potential disruptions in the supply chain for raw and finished materials; the continuation of the company’s growth-through-acquisition
program; general economic business conditions; the company’s ability to raise additional equity, including on an as needed
basis; housing and customer growth trends; unfavorable weather conditions; the success of certain cost-containment initiatives;
changes in regulations or regulatory treatment; the company’s ability to successfully close municipally owned systems presently
under agreement and successfully complete other acquisitions and dispositions; and other factors discussed in our Annual Report
on Form 10-K and our Quarterly Reports on Form 10-Q, which are filed with the Securities and Exchange Commission. For more information
regarding risks and uncertainties associated with Essential’s business, please refer to Essential’s annual, quarterly, and other
SEC filings. Essential is not under any obligation - and expressly disclaims any such obligation - to update or alter its forward-looking
statements whether as a result of new information, future events, or otherwise.
# # #
WTRGF
Essential
Utilities, Inc. and Subsidiaries Selected Operating Data (In thousands, except per share amounts) (Unaudited)
Quarter Ended March
31,
2025
2024
Operating revenues
$ 783,626
$ 612,069
Operations and maintenance expense
$ 137,824
$ 136,900
Net income
$ 283,789
$ 265,772
Basic net income per common share
$ 1.03
$ 0.97
Diluted net income per common share
$ 1.03
$ 0.97
Basic average common shares outstanding
275,194
273,377
Diluted average common shares outstanding
275,687
273,738
Essential
Utilities, Inc. and Subsidiaries Consolidated Statement of Operations (In thousands, except per share amounts) (Unaudited)
Quarter Ended March
31,
2025
2024
Operating revenues
$ 783,626
$ 612,069
Cost & expenses:
Operations and maintenance
137,824
136,900
Purchased gas
184,641
129,675
Depreciation
96,764
88,716
Amortization
2,613
1,088
Taxes other than income taxes
22,879
25,024
Total
444,721
381,403
Operating income
338,905
230,666
Other expense (income):
Interest expense
82,065
73,273
Interest income
(229 )
(989 )
Allowance for funds used during construction
(5,832 )
(4,681 )
Loss (gain) on sale of other assets
(237 )
(91,625 )
Other, net
(56 )
(442 )
Income before income taxes
263,194
255,130
Income tax benefit
(20,595 )
(10,642 )
Net income
$ 283,789
$ 265,772
Net income per common share:
Basic
$ 1.03
$ 0.97
Diluted
$ 1.03
$ 0.97
Average common shares outstanding:
Basic
275,194
273,377
Diluted
275,687
273,738
Essential Utilities, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands of dollars)
(Unaudited)
March 31,
December 31,
2025
2024
Net property, plant and equipment
$ 13,320,374
$ 13,143,476
Current assets
494,481
485,911
Regulatory assets and other assets
4,512,306
4,397,167
$ 18,327,161
$ 18,026,554
Total equity
$ 6,460,091
$ 6,198,809
Long-term debt, excluding current portion, net of debt issuance costs
7,524,985
7,368,381
Current portion of long-term debt and loans payable
231,812
329,349
Other current liabilities
524,796
645,319
Deferred credits and other liabilities
3,585,477
3,484,696
$ 18,327,161
$ 18,026,554
Media Contact :
David Kralle
Vice President of Public Affairs
Media Hotline: 1.877.325.3477
Media@Essential.co
Investor Contact:
Brian Dingerdissen
Vice President, Treasurer, FP&A
and IR
O: 610.645.1191
BJDingerdissen@Essential.co
the item shown at left
other guidance in this release
Text is the filed exhibit, verbatim.