In This Article:
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GAAP Earnings Per Share: $0.97, including significant gains from the sale of energy projects.
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Capital Expenditure: $253 million invested through March 31; annual projection between $1.3 billion and $1.4 billion.
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Net Income Growth: 38.8% increase.
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Earnings Per Share Growth: 34.7% increase.
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Operating Revenues: Decrease due to lower natural gas commodity prices.
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O&M Expenses: Slight decline year-over-year.
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Regulatory Activity: Authorization to increase Water segment revenues by $13.7 million annually in multiple states.
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PFAS Mitigation Costs: Estimated at least $450 million.
Release Date: May 03, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Essential Utilities Inc (NYSE:WTRG) reported GAAP earnings of $0.97 per share, including significant gains from the sale of energy projects.
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The company has made substantial progress in its acquisition program, particularly with the C-motion, expecting a vote from the PUC soon.
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Essential Utilities Inc (NYSE:WTRG) continues its significant infrastructure investment program, with $253 million invested through March 31, and plans to invest between $1.3 billion and $1.4 billion for the year.
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The company is well-positioned to comply with new EPA limits on PFAS, having tested all water sources and implemented mitigation solutions ahead of many utilities.
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Essential Utilities Inc (NYSE:WTRG) has a strong focus on corporate governance, with recent board additions and leadership contracts reinforcing its commitment.
Negative Points
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The unusually warm start to the year has impacted the Gas utility, highlighting the need for weather normalization.
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Operating revenues were down due to the decline in natural gas commodity prices year-over-year.
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The company faces potential supply chain pressures, particularly in securing necessary materials for PFAS mitigation within the new EPA compliance timelines.
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Despite strong earnings, there are concerns about the impact of weather on natural gas sales, with weather-related sales net of purchase gas costs about $20 million below projections.
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Regulatory challenges and uncertainties persist, especially with ongoing rate cases and the need for settlements to avoid litigation.
Q & A Highlights
Q: Can you provide any updates on the gas rate case in Pennsylvania, especially in light of the ongoing water case? A: Christopher H. Franklin, Chairman, President & CEO of Essential Utilities, noted that the situations are quite different ("apples to oranges"). He expressed confidence in the strong case they have presented and mentioned that they are in a period conducive to settlement discussions, although they are prepared to see the case through to the end.