Strengthened Outcomes Announced by Essential Utilities in Q2 of 2025
Essential Utilities Inc., a leading provider of water and natural gas services, has announced an upward revision of its projected GAAP earnings per share (EPS) for 2025. The new projection places the EPS above the previously announced guidance range of $2.07 to $2.11.
Strong Second Quarter Results
The upward revision is largely due to the company's impressive second quarter 2025 results. The Q2 GAAP EPS came in at $0.38, beating analyst estimates, and revenue significantly exceeded expectations. The regulated water segment revenues increased by 9.9%, while the regulated natural gas segment revenues saw a robust growth of 38.3%.
Factors Contributing to the Revision
Several factors have contributed to this positive development. First, the company's strong operational performance across both the water and natural gas segments played a significant role. Increased rates in both segments also boosted revenues.
Second, Essential Utilities Inc. has been executing on infrastructure spending and continued acquisitive expansion. The company invested $613 million in the first half of 2025, with plans to invest over $1.4 billion in infrastructure for the year.
Third, the company outperformed analyst expectations and prior forecasts. Despite some increases in depreciation, amortization, interest expenses, and operational costs, overall income growth was strong enough to drive the EPS above the initial guidance range.
Future Prospects
Looking ahead, Essential Utilities Inc. plans to make regulated infrastructure investments of approximately $7.8 billion through 2029. The regulated natural gas segment rate base is expected to grow at a compounded annual growth rate of approximately 11%, while the regulated water segment rate base will grow at a compounded annual growth rate of approximately 6%.
The regulated water customer base (or equivalent dwelling units) is expected to grow at an average annual growth rate of between 2 and 3% from acquisitions and organic customer growth over the long term. The regulated natural gas customer base is expected to remain stable for 2025.
Essential Utilities Inc. has also reaffirmed its commitment to substantially reduce Scope 1 and 2 greenhouse gas emissions by 60% by 2035 from the company's 2019 baseline. The company is also implementing a multiyear plan to ensure that finished water does not exceed the federal maximum contaminant level of the six EPA-regulated PFAS chemicals.
In addition, the company closed on the acquisition of the City of Beaver Falls Wastewater System and increased its quarterly dividend by 5.25%. As of June 30, 2025, Essential had $802 million available on its credit lines.
In summary, Essential Utilities Inc.'s better-than-expected revenue growth and effective management of infrastructure investments and acquisitions have contributed to raising the full-year 2025 GAAP EPS outlook above the original $2.07 to $2.11 range. The company's commitment to sustainability, customer growth, and infrastructure investment bode well for its future prospects.
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- The updated EPS projection for Essential Utilities Inc. in 2025 is due to impressive second quarter 2025 results, heralding a surplus over analyst estimates and a revenue boom exceeding expectations.
- Infrastructure spending and acquisitive expansion, as well as strong operational performance in both the water and natural gas segments, have significantly contributed to the positive development.
- The company's future plans include investing approximately $7.8 billion in regulated infrastructure by 2029, with the regulated natural gas segment rate base projected to grow at an annual rate of 11%, while the regulated water segment rate base is expected to increase at a rate of 6%.
- Essential Utilities Inc. has demonstrated a commitment to sustainability by aiming to significantly reduce its Scope 1 and 2 greenhouse gas emissions and implementing a multiyear plan to ensure safe levels of PFAS chemicals in finished water.
- To bolster its financial growth, the company has recently closed on the acquisition of the City of Beaver Falls Wastewater System and increased its quarterly dividend, while maintaining $802 million available on its credit lines.
