H2O America Q2 adjusted EPS beats estimates
HTO•Result drivers
- Rate increases - Revenue growth was primarily driven by rate increases, especially in California and Connecticut.
- Higher operating expenses - Operating expenses rose due to increased water production costs, higher depreciation from utility plant additions, and greater general and administrative expenses, including merger and acquisition costs.
- Higher share count - Adjusted EPS declined slightly as higher net income was more than offset by a larger share count from equity issuances.
Outlook and capital plan
- H2O America reaffirms 2026 standalone adjusted diluted EPS guidance of $3.08-$3.18.
- The company maintains its long-term adjusted diluted EPS CAGR target of 6-8%, anchored off 2025 EPS.
- Company plans $483 million in capital investment for 2026, and $2.7 billion over the 2026-30 period.
Q2 revenue and adjusted EPS
- U.S. water utility's Q2 revenue rose 6% year-over-year, driven by rate increases.
- Adjusted EPS for Q2 beat analyst expectations, despite a slight year-over-year decline.
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