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Essential Utilities Inc. (WTRG) Reports Full-Year 2023 Financial Results

  • Earnings Per Share (EPS): Increased to $1.86 in 2023 from $1.77 in 2022.

  • Infrastructure Investments: Record $1.19 billion in 2023, with plans for $7.2 billion from 2024 through 2028.

  • Acquisitions: Added over $44 million in rate base and 11,000 customers through seven system acquisitions.

  • 2024 Guidance: EPS guidance range initiated at $1.96 to $2.00.

  • Dividend: Continued tradition of quarterly cash dividends, marking over 79 years of consecutive payouts.

On February 22, 2024, Essential Utilities Inc (NYSE:WTRG) released its 8-K filing, announcing its financial results for the full year ended December 31, 2023. The company, a Pennsylvania-based holding company for U.S. water, wastewater, and natural gas distribution utilities, reported an increase in net income to $498.2 million, or $1.86 per share, up from $465.2 million, or $1.77 per share in 2022. Essential Utilities serves 3 million people in eight states through its water business, with a significant presence in suburban Philadelphia, and over 700,000 gas distribution customers in Pennsylvania and Kentucky.

Essential Utilities Inc. (WTRG) Reports Full-Year 2023 Financial Results
Essential Utilities Inc. (WTRG) Reports Full-Year 2023 Financial Results

Financial Performance and Challenges

Essential Utilities reported a decrease in revenues to $2.05 billion in 2023 from $2.29 billion in the previous year, mainly due to lower purchased gas costs and decreased volume from the regulated natural gas segment, influenced by warmer weather. However, the company's focus on regulatory recoveries and cost management led to a decrease in operations and maintenance expenses to $575.5 million from $613.6 million in 2022. These efforts, along with customer growth in the regulated water segment, contributed to the overall increase in net income.

Financial Achievements and Industry Significance

The company's financial achievements, particularly the record infrastructure investments and successful acquisitions, underscore its commitment to long-term growth and service reliability in the utilities sector. These investments are crucial for maintaining and upgrading essential infrastructure, ensuring compliance with environmental standards, and providing high-quality services to an expanding customer base.

Key Financial Metrics

Essential Utilities' regulated water segment reported a revenue increase of 6.5% to $1.15 billion, while the regulated natural gas segment saw revenues decrease to $863.8 million from $1.14 billion in 2022. The company's balance sheet remains solid with net property, plant, and equipment valued at $12.1 billion and total equity at $5.9 billion. The decrease in long-term debt and current liabilities reflects prudent financial management.

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"Despite the winter weather that was significantly warmer than normal in 2023, we successfully delivered earnings per share that met our 2023 guidance expectations," said Essential Utilities Chairman and Chief Executive Officer Christopher Franklin. "Also, for the third consecutive year, Essential has been named to Newsweeks list of Americas Most Responsible Companies. We are honored to be recognized for our commitments to operational excellence, environmental stewardship, and sustainable business practices and are excited to continue in our role as an industry leader throughout 2024."

Analysis of Company's Performance

Essential Utilities' performance in 2023 reflects a balanced approach to managing external challenges such as weather impacts and market conditions. The company's strategic investments and acquisitions have positioned it for continued growth and stability. The initiation of the 2024 EPS guidance range and the capital investment guidance signal confidence in the company's future prospects and its ability to deliver value to shareholders and customers alike.

For more detailed information on Essential Utilities Inc's financial performance and future outlook, investors and interested parties are encouraged to review the full 8-K filing.

Explore the complete 8-K earnings release (here) from Essential Utilities Inc for further details.

This article first appeared on GuruFocus.