Eversource Energy ((ES)) has held its Q4 earnings call. Read on for the main highlights of the call.
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The latest earnings call of Eversource Energy showcased a strong financial performance with remarkable growth in earnings, successful asset sales, and an increase in dividends. However, the positive outlook was tempered by challenges including regulatory uncertainties, potential equity dilution, and a negative outlook from Moody’s. The company’s strategic initiatives and growth are balanced by these challenges, reflecting a cautiously optimistic sentiment.
Strong Earnings Growth
Eversource Energy reported a significant increase in earnings per share, which rose by 5.3% year-over-year, surpassing the midpoint of the revised guidance. The non-GAAP earnings for 2024 stood at $4.57 per share, compared to $4.34 per share in 2023, indicating robust financial health and effective business strategies.
Successful Sale of Aquarion
In a strategic move, Eversource signed an agreement to sell Aquarion, a valuable asset, for approximately $2.4 billion. The transaction includes $1.6 billion in cash and $800 million of net debt to be extinguished at closing, which will strengthen the company’s financial position.
Increased Dividend
Eversource announced an increase in its first-quarter 2025 dividend by 5.2% on an annualized basis, reflecting confidence in its future earnings potential and commitment to returning value to shareholders.
Recognition for Corporate Responsibility
Eversource was honored by Newsweek as one of America’s most responsible companies for the sixth consecutive year and featured on Time’s annual list of the world’s best companies, underscoring its commitment to corporate responsibility and sustainability.
Major Infrastructure Investments
Eversource has planned substantial infrastructure investments totaling $24.2 billion in regulated electric and natural gas businesses from 2025 through 2029. This marks a 10% increase from the previous five-year plan, aiming to address aging infrastructure and meet growing load demands.
Equity Issuance and Dilution
The company issued $1 billion of equity in 2024, which is anticipated to cause some dilution and impact 2025 earnings. This strategic move is part of Eversource’s broader financial strategy but poses a potential challenge to shareholder value.
Pending Regulatory Approvals
The sale of Aquarion and certain rate cases are pending regulatory approval, which could impact Eversource’s future financial performance. These approvals are crucial for the completion of key transactions and initiatives.
Negative Outlook from Moody’s
Moody’s has placed Eversource on a negative outlook with an FFO to debt ratio target above the downgrade threshold of 13%, indicating ongoing financial scrutiny and potential challenges in maintaining credit ratings.
Forward-Looking Guidance
Eversource Energy’s forward-looking guidance highlights several key metrics and achievements. The company projects an earnings per share guidance for 2025 in the range of $4.67 to $4.82 and outlines a five-year long-term earnings growth rate of 5% to 7%, supported by strategic investments in transmission and operational efficiency improvements. The new capital investment plan projects nearly $24.2 billion in investments from 2025 to 2029, aimed at driving an 8% growth in rate base.
In conclusion, Eversource Energy’s earnings call reflects a strong financial performance with notable achievements in earnings growth and strategic asset sales. The company is poised for future growth with ambitious infrastructure investments and increased dividends. However, challenges such as regulatory uncertainties and a negative outlook from Moody’s present potential hurdles. Overall, Eversource’s strategic initiatives and commitment to corporate responsibility position it well for future success.
