Essential Utilities Q4 EPS Beats by 30.6%, Revenues Rise 15.7% to $699.1M
Essential Utilities reported Q4 EPS of $0.47, beating estimates by 30.6% despite a 29.8% year-over-year decline, driven by rate hikes and higher gas volumes. Operating revenues surged 15.7% to $699.1 million, with water segment revenues up 8% and natural gas up 23%, while O&M expenses rose 22.5%.
1. Fourth-Quarter Financial Results
Essential Utilities reported Q4 2025 EPS of $0.47, beating the consensus estimate by 30.6% but down 29.8% from $0.67 a year ago. Operating revenues rose 15.7% to $699.1 million, surpassing estimates by 18.7% on higher rates and volume.
2. Segment Revenue Drivers
Regulated water segment revenue increased 8% to $329.4 million, driven by higher water and wastewater rates. Regulated natural gas revenue climbed 23% to $361.3 million, supported by stronger customer demand and increased gas volumes.
3. Expense and Investment Trends
Operation and maintenance expenses grew 22.5% to $200.2 million due to higher purchased gas costs and expanded operations. Interest expense rose 7.1% to $84.9 million, while the company invested $1.4 billion in infrastructure during 2025.
4. Merger and Future Rate Approvals
Shareholders approved the merger with American Water Works, expected to close by Q1 2027. New rate approvals in 2025 added $92.6 million in water revenues and $8.9 million in gas, with early 2026 rates set to contribute an additional $4.6 million and $7.6 million respectively.