Essential Utilities Third-Quarter Profit Rises To $103.8 Million, But Nine-Month Earnings Fall
The water and gas utility still expects its American Water merger to close in the first quarter of 2027, with three settlements awaiting approval.
Essential Utilities, which provides water, wastewater and natural gas service under the Aqua and Peoples brands, said third-quarter net income rose to $103.8 million, from $92.1 million a year earlier. Net income for the first nine months of 2026 fell to $434.0 million, from $483.7 million, according to results released Tuesday and furnished in an 8-K filed Wednesday.
Quarter up, nine months down
Earnings were $0.36 per share in the third quarter, against $0.33 a year earlier. Adjusted earnings, which exclude costs tied to the pending American Water merger, were $0.38 per share.
Revenue for the quarter was $508.3 million, up 6.6% from $477.0 million. The company said regulatory recoveries and purchased gas costs were the main drivers. Water segment revenue rose 4.5% to $380.6 million, and natural gas revenue climbed to $122.6 million from $108.5 million.
For the nine months, net income was $1.53 per share, compared with $1.73 a year earlier. Those results carry $22.5 million of merger-related expenses; adjusted diluted earnings were $1.58 per share. Nine-month revenue rose 7.1% to $1,900.9 million.
Merger approvals still pending
Regulators in Kentucky, Ohio and Virginia have approved the merger with American Water. Settlement agreements have been reached with regulators in Pennsylvania, North Carolina and Texas, and each still needs approval from the applicable public utility commission.
The company continues to expect the deal to close in the first quarter of 2027. Chairman and CEO Christopher Franklin said the combined organization can bring "meaningful benefits" to the communities it serves and to shareholders.
The company will hold its earnings call at 11 a.m. EDT on Wednesday.
Pipes, rate cases and small acquisitions
Essential invested about $1.1 billion in infrastructure in the first nine months and is on track to invest $1.7 billion in 2026. Its Pennsylvania natural gas base rate case seeks a $163.2 million revenue increase to fund replacement of aging gas mains.
Rate awards and surcharges so far this year add $53.6 million in annual water revenue and $16.9 million in gas revenue. Pending water and wastewater cases would add an estimated $78.5 million.
Signed acquisition agreements total about $290 million in purchase price, including a $276.5 million deal for the Delaware County Regional Water Quality Control Authority, a sewer authority serving about 198,000 equivalent dwelling units near Philadelphia.
The board declared a quarterly dividend of $0.3606 per share, payable December 1 to holders of record on November 10. At September 30, the company had $759 million available on its credit lines.
The Pennsylvania, North Carolina and Texas commission approvals are the remaining steps the company cites toward a first-quarter 2027 close.
Sources
- 8-K Filing — Essential Utilities, Inc. (WTRG) — SEC EDGAR
- Exhibit e26437_ex99-1.htm — Essential Utilities, Inc. 8-K exhibit — SEC EDGAR
- Essential Utilities (WTRG) Beats Q3 Earnings and Revenue Estimates — Yahoo Finance
- Essential Utilities: Q3 Earnings Snapshot | wfaa.com — Associated Press
- Essential Utilities Reports Solid Q3 2026 Results – Company Announcement - FT.com — Financial Times
- American Water expects merger close by end of Q1 2027 and sets 2027 stand-alone EPS at $6.53-$6.63 (NYSE:AWK) | Seeking Alpha — seekingalpha.com
- Essential Utilities (WTRG) Stock Gets Fair Value Trim As Merger Exchange Ratio Shapes Analyst Views — Yahoo Finance
