On July 31, 2024, Eversource Energy (ES, Financial) released its 8-K filing detailing its financial performance for the second quarter of 2024. Eversource Energy, a diversified holding company providing rate-regulated electric, gas, and water distribution services to over 4 million customers in the Northeast U.S., reported GAAP earnings of $335.3 million, or $0.95 per share, for Q2 2024. This compares to $15.4 million, or $0.04 per share, for the same period in 2023.
Performance and Challenges
Despite the significant year-over-year increase in earnings, Eversource Energy's Q2 2024 earnings per share (EPS) of $0.95 fell short of the analyst estimate of $1.05. However, the company met revenue expectations, reporting $3,047.47 million against the estimated $3,047.47 million.
The company's performance was impacted by several factors, including higher non-tracked operations and maintenance expenses, increased storm restoration costs, and higher interest, depreciation, and property tax expenses. These challenges underscore the importance of efficient cost management and operational resilience in the utilities sector.
Financial Achievements
Eversource Energy's financial achievements in Q2 2024 include a notable improvement in its electric transmission segment, which earned $189.0 million compared to $161.0 million in Q2 2023. This increase was driven by higher investment levels in the electric transmission system and the impact of the annual rate reconciliation filing.
The natural gas distribution segment also showed significant growth, with earnings of $27.1 million in Q2 2024, up from $11.7 million in Q2 2023. This improvement was primarily due to higher revenues associated with investments in natural gas infrastructure and a base distribution rate increase at NSTAR Gas.
Income Statement Highlights
Key details from the income statement reveal the following segment earnings for Q2 2024:
| Segment | Q2 2024 Earnings (in millions) | Q2 2023 Earnings (in millions) | Change (in millions) | Q2 2024 EPS | Q2 2023 EPS |
|---|---|---|---|---|---|
| Electric Transmission | $189.0 | $161.0 | $28.0 | $0.54 | $0.46 |
| Electric Distribution | $149.7 | $165.5 | $(15.8) | $0.42 | $0.47 |
| Natural Gas Distribution | $27.1 | $11.7 | $15.4 | $0.08 | $0.03 |
| Water Distribution | $8.0 | $9.3 | $(1.3) | $0.02 | $0.03 |
| Parent and Other Companies | $(38.5) | $5.1 | $(43.6) | $(0.11) | $0.01 |
| Reported Earnings | $335.3 | $15.4 | $319.9 | $0.95 | $0.04 |
Analysis and Commentary
Eversource Energy's reaffirmation of its 2024 non-GAAP earnings projection of between $4.50 and $4.67 per share, along with its long-term EPS growth rate of 5 to 7 percent from a 2023 base of $4.34 per share, indicates a positive outlook despite the current challenges.
“Eversource once again delivered solid financial results for the second quarter and top-tier service reliability and storm response for customers, while positioning our company well for the future of clean energy,” said Joe Nolan, Eversource Energy Chairman, President and Chief Executive Officer.
The company's strategic initiatives, such as the commissioning of the first-in-the-nation networked geothermal pilot project and the Cape Cod Solution transmission project, highlight its commitment to advancing clean energy and modernizing the electric sector.
Conclusion
While Eversource Energy (ES, Financial) faced some operational challenges in Q2 2024, its strong performance in key segments and strategic focus on clean energy and infrastructure investments position it well for future growth. Investors and stakeholders will be closely monitoring the company's ability to manage costs and execute its strategic initiatives in the coming quarters.
Explore the complete 8-K earnings release (here) from Eversource Energy for further details.
