Essential Utilities Inc. (WTRG) Stock: Reports Strong Q125 Results and Strong 2025 Outlook

TLDR

Q1 2025 EPS of $1.03 beat estimates; revenue grew 28% year-over-year to $783.6 million. 2025 EPS guidance of $2.07-$2.11 affirmed along with long-term growth targets. Stock currently at $39.34, down 3.48% after earnings call despite year-to-date gain of 9.82%. Over $270 million invested in infrastructure in Q1; $1.4-$1.5 billion planned for 2025. Company continues expanding via acquisitions and leads in PFAS remediation efforts.

Essential Utilities Inc. (NYSE: WTRG) shares were trading at $39.34, down 3.48%, as of late morning on May 8, 2025, following the release of its first-quarter results.

Essential Utilities Inc

For the quarter ended March 31, 2025, Essential reported earnings of $1.03 per share, surpassing the Zacks consensus estimate of $0.80 and marking a 41% improvement over the year-ago quarter’s $0.73. Revenue surged 28% year-over-year to $783.6 million, also beating expectations.

Essential Utilities, $WTRG, Q1-25. Results:

📊 EPS: $1.03 🟢
💰 Revenue: $783.6M 🟢
🔎 Strong start to 2025 with 28% revenue growth, infrastructure investment of $271M, and reaffirmed full-year and long-term targets. pic.twitter.com/T4Z8S166Y3

— EarningsTime (@Earnings_Time) May 12, 2025

The company’s solid performance was driven by increased revenues from regulatory recoveries, higher natural gas volumes, and lower expenses. These positives were partly offset by the absence of a prior-year gain from a business sale. CEO Christopher Franklin credited the strong start to infrastructure investments and reaffirmed confidence in 2025 targets.

2025 Guidance and Long-Term Targets Reaffirmed

Essential reaffirmed its full-year 2025 EPS guidance of $2.07 to $2.11 and its long-term plan to grow EPS at a compound rate of 5% to 7% through 2027. Management also confirmed its $1.4 to $1.5 billion capital investment target for 2025 and expects regulated rate base growth above 8% annually through 2029.

Dividends remain a cornerstone, with the company declaring a quarterly cash dividend of $0.3255 per share, payable June 2, 2025. Essential has now paid consecutive quarterly dividends for over 80 years.

Operational Highlights and Acquisition Growth

The regulated water segment delivered revenue of $300.8 million, up 7.5% from last year, while natural gas revenue jumped to $470.8 million due to colder weather and higher gas costs. Operating expenses rose slightly to $137.8 million, mainly from higher customer assistance and employee-related costs, but were offset by lower bad debt expenses.

Essential continues to grow via acquisitions. It recently closed deals in Ohio and Pennsylvania, adding roughly 3,300 customers. Five more agreements are pending, including a $276.5 million deal for DELCORA, which will expand its base by nearly 200,000 customers. The company’s acquisition pipeline covers an estimated 400,000 potential new customers.

Infrastructure and Sustainability Initiatives

In Q1, Essential invested $271 million in upgrading its water and gas infrastructure, part of its plan to spend up to $1.5 billion this year. Over the next five years, the company targets $7.8 billion in total investments, including at least $450 million to address PFAS contamination under new EPA rules.

Essential reaffirmed its climate commitment, aiming for a 60% reduction in Scope 1 and 2 greenhouse gas emissions by 2035. Key strategies include pipeline replacements, renewable energy purchases, and enhanced methane leak detection.

 

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