Essential Utilities Q4 Earnings Beat Estimates, Revenues Rise Y/Y

Essential Utilities Inc. WTRG reported fourth-quarter 2025 operating earnings per share (EPS) of 47 cents, which beat the Zacks Consensus Estimate of 36 cents by 30.56%. The bottom line decreased 29.85% from 67 cents in the year-ago quarter.

WTRG’s fourth-quarter earnings are positively impacted by the increase in rate and natural gas volume, reflecting stronger customer demand. These benefits are more than offset by growth in taxes, along with increased operations and maintenance expenses.

Revenues of WTRG

Operating revenues of $699.1 million surpassed the Zacks Consensus Estimate of $589 million by 18.69%. The top line rose 15.67% from the prior-year quarter’s $604.4 million.

WTRG reported total revenues of $2.47 billion in 2025, marking an 18.62% rise from $2.09 billion in 2024.

WTRG’s Segment Details

Essential Utilities’ regulated water segment generated $329.4 million in revenues, up 8% from $305 million in the fourth-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 $361.3 million, marking a 23% increase from $293.7 million in the fourth quarter of 2024.

Highlights of WTRG’s Q4 Release

Operation and maintenance expenses amounted to $200.2 million, up 22.45% from the year-ago figure of $163.5 million due to increases in purchased gas costs, rates across both the water and gas businesses, and gas volume.

Operating income totaled $227 million, up 0.17% year over year.     

Interest expenses increased 7.11% to $84.9 million from $79.3 million in the prior-year quarter. 

The company continues to expand its operations through acquisitions and organic initiatives. During 2025, the company added 12,700 customers through organic growth, and three acquisitions of water and wastewater systems that were completed in the same period. Since 2015, through closed acquisition, the company added nearly 135,000 wastewater customers.

The new water and natural gas rates approval received by the company in 2025 increased annual revenues by $92.6 million and $8.9 million, respectively.

The new water and gas rate approvals received by the company in the first two months of 2026 are expected to increase annual revenues by $4.6 million and $7.6 million, respectively.

WTRG’s Financial Highlights

Current assets amounted to $610.4 million as of Dec. 31, 2025, compared with $485.9 million as of Dec. 31, 2024.

Long-term debt was $8.11 billion as of Dec. 31, 2025, up from $7.37 billion as of Dec. 31, 2024.

The company invested $1.4 billion in 2025 to improve its regulated water and natural gas infrastructure systems, and enhance operations and customer service.

Latest Update on the Merger With American Water Works

Essential Utilities is moving forward with its previously announced merger deal with American Water Works by securing the necessary regulatory consents and approvals. During 2025, the company submitted applications for regulatory clearance in the applicable states.

On Feb.10, 2026, shareholders of both companies voted in favor of the proposed merger. The merger is expected to close by the end of the first quarter of 2027.

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 Works AWK posted fourth-quarter 2025 operating EPS of $1.24 per share, which missed the Zacks Consensus Estimate of $1.28 by 3.13%.

AWK’s long-term (three to five years) earnings growth rate is 7.04%. The company missed the Zacks Consensus Estimate in two of the trailing four quarters and surpassed it in the other two quarters, delivering an average negative surprise of 0.18%. 

American States Water Company AWR reported fourth-quarter 2025 operating EPS of 74 cents, up 32.1% from the year-ago quarter’s 56 cents.

AWR’s long-term earnings growth rate is 5.65%. Operating revenues totaled $164.3 million, up 14.8% from the year-ago quarter’s $143.1 million.

California Water Service Group CWT posted fourth-quarter 2025 operating EPS of 19 cents, which missed the Zacks Consensus Estimate of 36 cents by 47.22%.

CWT’s long-term earnings growth rate is 8.78%. It delivered an average earnings surprise of 7.62% in the last four quarters. 

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

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