Essential Utilities Q3 Earnings Surpass Estimates, Revenues Rise Y/Y

Essential Utilities Inc. WTRG reported third-quarter 2025 operating earnings per share (EPS) of 33 cents, which beat the Zacks Consensus Estimate of 27 cents by 22.2%.

EPS improved 32% from the year-ago quarter’s figure. The year-over-year rise was driven by increases in rates across both business segments, partially offset by an increase in depreciation and amortization expense, interest expense, and operations and maintenance expense.

Revenues of WTRG

Operating revenues of $476.97 million missed the Zacks Consensus Estimate by 0.06%.

Total revenues were up 9.6% year over year. The revenue growth was primarily driven by increased rates.

WTRG’s Segment Details

Essential Utilities’ regulated water segment generated $364.1 million in revenues, up 8.8% from $334.5 million in the third-quarter of 2024. The primary drivers of this growth were higher water and wastewater rates.

WTRG’s regulated natural gas segment reported quarterly revenues of $108.5 million, marking a 12.1% increase from $96.7 million in the third-quarter of 2024. This growth was primarily driven by increased rates.

Highlights of WTRG’s Q3 Release

Operation and maintenance expenses amounted to $153.1 million, up 6.0% from the year-ago figure of $144.4 million, primarily due to increased employee-related costs, bad debt expense, production costs for water and wastewater operations, and other costs, partially offset by decreased legal expense, outside services, and other expenses in the natural gas segment due to capitalization.

Operating income totaled $169.8 million, up 9.5% year over year.

Interest expenses increased 7.0% to $82.3 million from $76.8 million in the prior-year quarter.

Year to date, the company has completed system acquisitions serving approximately 10,300 customers for a total investment of approximately $58 million.

As of Nov. 4, 2025, the new water and gas rates approval received by the company is expected to increase annual revenues by $96.5 million and $2.9 million, respectively.

On Aug. 27, 2025, the company announced an agreement with International Electric Power III, LLC (IEP), to become an investor in a 1,400-acre data center facility in Greene County, PA.

On Oct. 27, 2025, the company announced that it had entered into a definitive agreement to merge, in an all-stock, tax-free transaction, with American Water Works Company, Inc., to create a leading regulated U.S. water and wastewater utility with a pro forma market capitalization of approximately $40 billion and a combined enterprise value of nearly $63 billion, based on closing stock prices as of Oct. 24, 2025. The transaction is expected to be closed by the end of the first quarter of 2027.

WTRG’s Financial Highlights

Current assets amounted to $433.6 million as of Sept. 30, 2025, compared with $485.9 million as of Dec. 31, 2024.

Long-term debt was $7.69 billion as of Sept. 30, 2025, up from $7.37 billion as of Dec. 31, 2024.

Essential Utilities invested $983 million in the first nine months of the year to improve its regulated water and natural gas infrastructure systems and enhance customer service across its operations.

Guidance of WTRG

Essential Utilities reaffirmed its 2025 EPS guidance in the range of $2.07-$2.11. The Zacks Consensus Estimate for EPS is pegged at $2.10, exceeding the midpoint of the projected range. 

WTRG has predicted long-term annual earnings growth of 5-7% through 2027 from a 2024 base.

Management anticipates its customer base in the water segment to expand 2-3% through acquisitions and organic customer growth.

Company plans infrastructure investments of $1.4-$1.5 billion in 2025.

From 2025 through 2029, the company plans to invest approximately $7.8 billion to improve water and natural gas systems and better serve customers through improved information technology.

WTRG’s Zacks Rank

Essential Utilities currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Releases

American Water Work AWK posted third-quarter 2025 operating EPS of $1.94, which beat the Zacks Consensus Estimate of $1.90 by 2.1%.

AWK’s total quarterly revenues of $1.45 billion surpassed the Zacks Consensus Estimate of $1.32 billion by 19.6%. The top line also increased 9.8% from the year-ago figure of $1.32 billion.

California Water Service Group CWT posted third-quarter 2025 operating EPS of $1.03, which missed the Zacks Consensus Estimate of $1.20 by 14.2%.

CWT’s operating revenues totaled $311.2 million, which topped the Zacks Consensus Estimate of $307 million by 1.4%. The top line also climbed 3.9% from $299.6 million recorded in the prior-year quarter.

An Upcoming Release

Consolidated Water CWCO is set to release third-quarter 2025 results on Nov. 10. The Zacks Consensus Estimate for EPS indicates a year-over-year decline of 22.6%.

The Zacks Consensus Estimate for third-quarter sales indicates a year-over-year decrease of 1.8%. It delivered an average earnings surprise of 40.1% in the last four quarters. 

 

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This article originally published on Zacks Investment Research (zacks.com).

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