Essential Utilities Inc.
WTRG
reported fourth-quarter 2021 operating earnings per share (EPS) of 44 cents, which surpassed the Zacks Consensus Estimate of 43 cents by 2.3%. However, the bottom line narrowed 4.3% from the year-ago quarter’s earnings of 46 cents per share.
Essential reported operating EPS of $1.67 in 2021, up 31.5% from $1.27 in 2020. Total earnings also surpassed the Zacks Consensus Estimate of $1.66 per share by 0.6%.
Total Revenues
The fourth quarter’s operating revenues of $535.7 million were up 8.7% from $493 million in the prior-year quarter. The year-over-year improvement in total revenues was due to the recovery of purchased gas costs, customer growth and new rate increases in the regulated water segment.
Operating revenues for the fourth quarter surpassed the Zacks Consensus Estimate of $497 million by 7.8%.
Essential reported total revenues of $1,878.1 million in 2021, up 28.4% from $1,462.7 million in 2020. Total revenues also surpassed the Zacks Consensus Estimate of $1,840 million by 2.1%.
Essential Utilities Inc. Price, Consensus and EPS Surprise
Essential Utilities Inc. price-consensus-eps-surprise-chart
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Essential Utilities Inc. Quote
Highlights of the Release
Essential continues to expand operations through acquisitions. The pipeline of potential water and wastewater municipal acquisitions, once completed, will add nearly 415,000 customers to the existing customer base.
In 2021, the regulated water segment received rate awards in different jurisdictions, which led to an increase in annualized revenues by $28.8 million. WTRG’s regulated natural gas segment received rate awards or infrastructure surcharges in Pennsylvania and Kentucky, which is estimated to increase annualized revenues by $1.3 million. Year-to-date 2022, Essential already received approval for $13.4 million new rates from the utility commission. Essential currently has proceedings pending for the water segment, which, on approval, is estimated to add $106.4 million to annual revenues.
Operation and maintenance expenses for the fourth quarter were $158.6 million, up 0.9% from the year-ago quarter figure of $157.2 million.
Operating income for the reported quarter was $139.6 million, up 5.1% year over year.
Interest expenses increased 2% to $52.8 million from $51.8 million in the year-ago quarter.
Financial Highlights
Current assets were $437.8 million as of Dec 31, 2021 compared with $380.2 million on Dec 31, 2020. Long-term debt was $5,779.5 million as of Dec 31, 2021, higher than $5,507.8 million on Dec 31, 2020.
Essential invested more than $1 billion in 2021 to replace and expand the water and wastewater utility infrastructure as well as upgrade the natural gas utility infrastructure.
Guidance
Essential initiated the 2022 earnings guidance in the range of $1.75-$1.80 per share. The midpoint of the earnings guidance is on par with the corresponding Zacks Consensus Estimate of $1.78 per share. WTRG expects EPS growth of 5-7% from 2021 through 2024.
For 2022, Essential reiterated the customer base from the water segment to expand 2-3% due to acquisitions and organic customer growth.
Essential also plans to invest nearly $1 billion in 2022 and $3 billion through 2024 to improve the water and natural gas systems and to better serve customers through the usage of improved information technology.
Zacks Rank
Currently, Essential carries a Zacks Rank #4 (Sell).
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Upcoming Releases
Algonquin Power & Utilities
AQN
is slated to report fourth-quarter 2021 earnings on Mar 3 after market close. The Zacks Consensus Estimate for the fourth quarter’s EPS is pegged at 21 cents.
Algonquin Power & Utilities’ long-term (three to five years) earnings growth is currently pegged at 8.7%. The Zacks Consensus Estimate for AQN’s 2022 earnings implies year-over-year growth of 4.5%.
Global Water Resources Inc.
GWRS
is slated to report fourth-quarter 2021 earnings on Mar 10 before market open. The Zacks Consensus Estimate for the fourth quarter’s EPS is pegged at 1 cent.
Global Water Resources’ long-term earnings growth is currently pegged at 15%. The Zacks Consensus Estimate for GWRS’ 2022 earnings implies year-over-year growth of 6.7%.
Consolidated Water Company Ltd.
CWCO
is slated to report fourth-quarter 2021 earnings on Mar 30 before market open. The Zacks Consensus Estimate for the fourth quarter’s EPS is pegged at 7 cents.
Consolidated Water’s long-term earnings growth is currently pegged at 8%. The Zacks Consensus Estimate for CWCO’s 2022 earnings implies year-over-year growth of 76.5%.
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