CPK

Image source: The Motley Fool. Friday, Aug. 7, 2026 at 8:30 a.m. ET Chair of the Board, President and Chief Executive Officer - Jeffry Householder Executive Vice President, General Counsel, Corporate Secretary and Chief Policy and Risk Officer - James Moriarty Senior Vice President and Chief Financial Officer - Jeffrey Sylvester Head of Investor Relations - Lucia Dempsey Operator: Welcome to Chesapeake Utilities Corporation's Second Quarter 2026 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Lucia Dempsey, Head of Investor Relations. Please go ahead. Lucia Dempsey: Thank you, and good morning, everyone. Today's presentation can be accessed on our website under the Investors page and Events and Presentations subsection. After our prepared remarks, we will open up the call for questions. On Slide 2, we show our typical disclaimers, while I remind you that matters discussed on this conference call may include forward-looking statements that involve risks and uncertainties. Forward-looking statements and projections could differ materially from our actual results. The safe harbor for forward-looking statements section of our 2025 annual report on Form 10-K and in our second quarter Form 10-Q provide further information on the factors that could cause such statements to differ from our actual results. Additionally, the company evaluates its performance based on certain non-GAAP measures, including adjusted gross margin, adjusted net income and adjusted earnings per share, and the information presented today includes the appropriate disclosures in accordance with the SEC's Regulation G. A reconciliation of these non-GAAP measures to the related GAAP measures have been provided in the appendix of this presentation in our earnings release and our second quarter Form 10-Q. Here at Chesapeake Utilities, safety is our first priority. We start all meetings with a safety moment, and we'll do so here as highlighted on Slide 3. Given the impact that wildfires have caused across the country lately, today's safety moment focuses on wildfire smoke. Wildfire smoke contains fine particles and harmful gases that can irritate the eyes and lungs, worsen asthma or heart conditions and reduce air quality even far from the fire itself. When smoke levels are elevated, limit time outdoors, keep windows and doors closed and use air conditioning or air purifiers as available. I'll now introduce our presenters today. Jeffry Householder, Chair of the Board, President and Chief Executive Officer, will provide an update on this quarter's key accomplishments and our capital growth program. James Moriarty, Executive Vice President, General Counsel, Corporate Secretary and Chief Policy and Risk Officer, will discuss the Florida City Gas rate case and stakeholder engagement. And then Jeffrey Sylvester, Senior Vice President and Chief Financial Officer, will discuss our financial results in more detail. With that, it's my pleasure to turn the call over to Jeff Householder. Jeffrey Householder: Thank you, Lucia, and good morning, everybody. I'll start with Slide 5. Our growth trajectory has continued through the second quarter as we reported a 5% increase in adjusted net income, driving an 8% increase in adjusted earnings per share through the first six months of this year. In the second quarter, we generated an incremental $10 million of margin related to growth in our transmission, infrastructure and distribution systems. We also invested $140 million of capital in the second quarter, bringing our total year-to-date investment to $262 million while continuing to advance our regulatory filings. Moving to Slide 6. We continued to report another quarter of solid commercial customer growth and above-average residential customer growth, 3% in Delmarva, 2.1% for Florida Public Utilities and 1.8% for Florida City Gas. Increasing demand for natural gas remains core to our long-term growth strategy. We are fortunate to continue seeing above-average growth in our attractive service areas. In our Delmarva region, Spotlight Delaware states that Delaware has consistently ranked top 10 in percentage population growth during recent U.S. Census Bureau Studies. We continue to see strong demand for natural gas and new apartment complexes and housing developments as well as for large commercial and industrial customers. Complementing this, the latest study from the Florida Office of Economic and Demographic Research projects annual state population growth to average nearly 300,000 net new residents. That's like adding a city nearly the size of Orlando every year. This growth will continue to drive increased natural gas demand for years to come. Slide 7 highlights the Florida Energy Pathway Project, or FEP, which we just announced last month. This project is designed to address significant transmission capacity constraints and substantial natural gas demand increases in South Florida. FEP is a 97-mile intrastate natural gas transmission infrastructure project that will run from Palm Beach County to Miami-Dade County in Florida. This is the largest single project in our company's history, representing total investment of approximately $1.2 billion. Our subsidiary, Peninsula Pipeline Company, or PPC, will construct and operate the line and will fund and own at least 51%. We've been working with potential partners that may fund and own up to 49% of the project, and we expect to share more details soon. FEP is expected to be in service in 2030 and is anchored by multiple investment-grade shippers who've committed to nearly 250,000 dekatherms per day of capacity. We are also accepting binding commitments with additional shippers. This project is a valuable long-term regulated growth opportunity for the company. It also aligns strategically with our natural gas transportation construction expertise, above-average growth expectations and increased presence in South Florida following the FCG acquisition. Now let's shift to Slide 8, which summarizes our 2026 capital program. Given our strong start to the year and increased expectations for additional capital expenditures in the second half of the year, we're increasing our full year 2026 capital guidance by $100 million, resulting in an updated range of $550 million to $600 million. This is driven primarily by initial spending for FEP as well as increases in regulated distribution and infrastructure investments. Slide 9 shows additional detail on our transmission projects that are supporting natural gas demand in our service areas. We forecast these projects to contribute approximately $33 million of gross margin in 2026 and an additional $51 million in 2027. The largest project on this table yet to come online is the Worcester Resiliency Upgrade, or WRU, our LNG storage facility. Slide 10 summarizes the latest updates on this project. Site and facility construction remain on schedule, and I'm pleased with our progress overall. WRU is a substantial complex project that will deliver significant peak day service capabilities and serve natural gas expansion at the southern end of our system. We look forward to bringing full project online early next year. I'll now shift to Slide 11 to address our longer-term capital program. As we've discussed before, there are a number of expansion opportunities under development that may provide significant growth potential as we serve increasing demand across our service areas. Our Delmarva regional enhancement project continues to move forward with permitting underway and construction expected to start next year. We're also making progress with the Accomack County Exploration project as we continue to assess opportunities to serve customers on Virginia's Eastern Shore. We continue to engage with partners in the community at the Cape and Port of Canaveral to explore potential opportunities for LNG transportation and storage. Given the growth in our capital program since 2024, we now expect to exceed capital investment of $1.4 billion through the end of this year, which is nearly at the bottom end of our initial five-year capital range. As a result, we are updating that range to share that we now expect to exceed $2.2 billion of capital investment from 2024 through 2028. In addition, we recognize that the progress we're making on our investment opportunities, particularly with the announcement of FEP, will necessitate a more fulsome update of our long-term performance expectations. Therefore, we now expect to provide the following guidance on our full year 2026 earnings call this coming February, 2027 through 2031 capital expenditure guidance and 2027 through 2031 earnings growth rate. We believe these disclosures will reflect and support our industry-leading long-term growth opportunities that will drive stakeholder value for years to come. With that, I'll turn it to Jim. James Moriarty: Thank you, Jeff, and good to be with all of you today. I'll start with Slide 12. Earlier this year, we filed a rate case for our Florida City Gas business, requesting a base rate adjustment of approximately $47 million and an ROE of 11.25%. This request updates our returns and includes cost recovery for a number of key areas, including technology, insurance, depreciation and property taxes. We were pleased to have our request for $16 million of annualized interim rate adjustment approved by the Florida Commission in late July. This will generate over $6 million of increased revenue in 2026. We are thrilled that our FCG teammates and customers are part of the Chesapeake family and value the exciting opportunity to serve this growing region. We will continue to work closely with the Florida PSC staff and the Office of Public Counsel to achieve a constructive outcome. I'll now turn to Slide 13 to provide an update on our stakeholder engagement. In April, we launched Spring Impact Days, a company-wide volunteer initiative that brought employees together to continue to support the communities we serve. With more than 30 volunteer events across our service areas, Impact Days brought out our purpose-led mission to life. From environmental cleanups to serving at food banks and supporting animal shelters, walks, and bills, these days were all about connection, compassion and community. Impact Days are set to become a tradition and cornerstone of our company's commitment to stakeholder engagement. Through the six months of the year, over 500 team members have participated in a volunteer event, and the company has contributed nearly $1 million in charitable donations, community partnerships and sponsorships. Stakeholder engagement remains central to who we are and to our success. We are powered by people and guided by a commitment to inclusive progress so that no one is left behind. With that, I am very pleased to turn the call to Jeff Sylvester, who will discuss our financial results in more detail. Jeffrey S. Sylvester: Thanks, Jim, and good morning, everyone. Slide 14 provides an overview of our business transformation. We are building a stronger foundation for growth with our ERP implementation serving as a critical enabler of that strategy. We are making a substantial progress on our ERP project. Last month, we successfully transitioned into the realized build phase, and we remain on track for our planned 2027 go-live. I'm proud of what the team has accomplished to reach this important milestone. This investment will strengthen enterprise capabilities, improve data analytics and provide a scalable platform to support future growth and create long-term value for our shareholders. Now shifting to Slide 15 to discuss our financial results for the quarter. We continue to demonstrate strong performance and growth across all metrics. Adjusted gross margin was approximately $150 million, up 5% and adjusted net income was approximately $25 million, also up 5% from the second quarter of 2025. Adjusted earnings per share were $1.05 this quarter, representing a 1% increase over the second quarter of 2025 and is reflective of the shares we've issued throughout the last year as we return to our target capital structure. Slide 16 provides additional detail on the key drivers of our second quarter performance. Ongoing and recently completed natural gas transmission expansion projects contributed $0.15 of adjusted earnings per share this quarter. Margin from our infrastructure program investments accounted for an additional $0.10 per share. Continued demand for natural gas distribution drove $0.06 of incremental adjusted EPS, and we benefited from an additional $0.06 of improved propane and Aspire performance in the quarter as well. These gains were partially offset by a few factors, including $0.04 related to consumption, quarterly timing differences and other items and $0.04 from decreased CNG, RNG and LNG services. We also had $0.11 of increased depreciation, amortization and property tax expenses driven by increasing levels of capital investment, $0.05 of increased facility, vehicle and insurance expenses, $0.04 of higher credit collections and customer service costs and $0.03 of increased payroll and benefit expenses. Lastly, financing activity, including debt and equity issuances over the last 12 months reduced adjusted EPS by $0.05. Shifting to Slide 17. Adjusted gross margin for our regulated segment was approximately $125 million this quarter, up 6% from the second quarter of last year. Regulated operating income saw similar growth, up 7% to approximately $55 million in the second quarter of 2026. Our unregulated Energy segment also demonstrated continued growth with adjusted gross margin up 2% to approximately $25 million in the second quarter of 2026. Our overall growth is supported by our sustained focus on managing our expenses. For the first half of the year, our operational expenses represented only 45% of gross margin, which is our lowest point to date. This reinforces our long-term progress towards efficiency and value realization as we grow the business. I'll now move to Slide 18 to review our capital structure and financing activities. At June 30, our equity capitalization remained at 50%. We also continue to maintain strong liquidity and sufficient capacity to support growth with 70% of our total debt capacity of $798 million available as of June 30, 2026. In the last few days, we have just completed an amendment of our revolving credit agreement, bringing the total borrowing capacity under the revolver to $650 million, an increase of $200 million. This includes $250 million available under a 364-day tranche and $400 million available under a five-year tranche expiring August 2031. Moving on to Slide 19. Alongside our equity and debt plans, our dividend policy continues to be a key component of our capital allocation strategy as we fund growth investments to drive overall total shareholder return. Our most recent annual dividend increase of 7.3% and our next dividend payment of $0.74 per share align with our Board-approved dividend payout target range of 45% to 50%. This enables us to retain 50% to 55% of earnings to support our robust capital program and reduce external financing needs. Slide 20 demonstrates our track record of strong and consistent earnings growth over the last 19 years. We remain committed to delivering industry-leading long-term earnings per share growth by reaffirming our 2028 earnings per share guidance of $7.75 to $8. And as Jeff mentioned earlier, we expect to provide a five-year capital guidance and earnings growth rate on our full year earnings call in February of next year. I'd like to end by summarizing our value proposition, which is shown on Slide 21. Our track record reflects a long-standing commitment to executing on our promises and creating value for stakeholders. Through decades of consistent growth, we have demonstrated both resilience and discipline, and I remain highly confident in our ability to continue delivering strong results. Through our three growth pillars of disciplined capital investment, effective regulatory engagement and a relentless focus on continuous improvement, we will strengthen our business and position it for sustained long-term growth. As Jim discussed, we remain powered by people. We are fueled by our teammates who are committed to delivering high-quality service to our customers. We are active participants within our communities and remain focused on delivering value for all shareholders. With that, we'll take your questions. Operator? Operator: [Operator Instructions] We'll take our first question from Constantine Lednev with Wells Fargo. Constantine Lednev: Maybe starting off on the Florida Energy Pathway. Just curious on the regulatory and permit path here and how the commercial interest is shaping up anchors for the project. Is there still an opportunity to upsize or would that more rely on future laterals? And just maybe a little bit of a sense on how this project could fit into the bigger update at year-end. Jeffrey S. Sylvester: Constantine, this is Jeff Sylvester. I mean, as you know, we've probably disclosed the size of the project and the, I guess, the shippers we haven't disclosed, but certainly, the volumes in there are meaningful to us. We also disclosed that we're interested in looking at additional potential load, which we're obviously working on and expect to be an interesting part of that project. And again, we do expect there's growth in that potential project. In terms of the update in February. I think it is a meaningful part of that update. And so we're, as you would expect, maybe thinking about how that plays out over the next five years. We expect to provide some of that in February. But still a lot of questions as we work towards the partnership, we expect to have that sort of aligned here in the quarter. And that will give us a little bit more clarity around all kinds of things relative to financing and partnership specifically. So obviously, it's an exciting project for us. It's quite meaningful, and we look forward to sharing more as we can. Jeffrey Householder: Constantine, this is Jeff Householder. From a regulatory and permitting perspective, this is an intrastate pipeline project. operating under primarily our Peninsula Pipeline company. It is jurisdictional to the Florida Public Service Commission. And we will, at the appropriate times, be filing various documents with the PSC and disclosing contracts and those sorts of things. To the extent that we are providing some service to ourselves to one of our affiliates, which is frankly a fairly small part of this project, but it's meaningful to us, then we'll file an affiliate transaction petition with the commission as we typically do with PPC projects. The permitting process is about to begin in earnest. We've had many, many conversations, as you might imagine, with folks like the Florida Department of Environmental Protection and the Florida Department of Transportation and others. This is a project that goes through three southern counties. We will be largely in the public right of way here. And so there's not a tremendous amount of land acquisition required, and we expect the permitting process to go relatively smoothly for a project of this size. Constantine Lednev: Excellent. I appreciate that. And maybe a quick follow-up there, noting the partnership structure kind of what's driving the rationale there? And we've obviously seen a lot of different project equity, pref equity type structures, kind of maybe kind of how is that contemplated within the funding plan? Jeffrey Householder: Well, I think part of that for us is trying to maintain a reasonable balance on the risk associated with any investment of this size. Good to share some of those risks with a partner. It's also reflective, I think, of the impact of a project of this magnitude on our earnings profile over the next several years as we build capital up to about $600 million on our side of the project, and look to initiate revenue from that project in 2030. So we've got some things to manage in the ensuing years as we construct the project. And there are several ways to do that. We've obviously contemplated that as part of our ongoing guidance for earnings and the thoughts of what we will provide to you in February of '27 looking forward. So I think we're in pretty good shape there, but it was a manageable amount of capital over an extended period of time that we felt comfortable with. And frankly, that's kind of how we got to the point of being interested in taking on a partner for the project. Jeffrey S. Sylvester: Yes. And I'll add that there. We've talked about other potential projects out there for us. And this thinking about timing related to those, obviously, we want to continue to do projects that are meaningful to us in our service areas. And so we're thinking about all of those things, making sure we've got the capacity to do more. Constantine Lednev: Excellent. And maybe just one housekeeping item on the '28 CapEx kind of step-up, given the difference versus the prior plan, does that kind of push you to the top end of the range? And if we look at kind of that implied $400 million run rate for '27, '28, is that something that's sustainable into the five-year update? Jeffrey S. Sylvester: Yes. I think that what we're signaling with the update through '28 is obviously, we're pushing up against the bottom of what we have provided. Obviously, FEP has an impact there, but we're also seeing other opportunities that are going to push us beyond it. And so again, we believe we've got lots of opportunities in our service territories and certainly looking beyond the '28 plan, you'll expect to see an update in February that will likely signal the right things relative to growth. Operator: Our next question comes from Nicholas Campanella with Barclays. Michael Brown: This is Michael on for Nicolas Capital. My first question is there a common ground for a settlement in the FCG rate case? Jeffrey Householder: Well, I mean, we always like to think that, that might occur. We'll see where all of this goes. The Office of Public Counsel, as you probably have seen, has staked out a position completely opposite to what we've filed. That's not been that unusual. And certainly, people will take positions in these filings as they feel are necessary. I don't know that we will get to a settlement on this particular filing, and we're certainly prepared to fully litigate it if we need to. And so we'll see where it goes. Michael Brown: The next question is, do you plan on, I know you plan on giving a growth rate in the February update. What about EPS guidance for 2027 and also beyond 2028? I know given EPS guidance for 2028. Jeffrey S. Sylvester: Yes. I mean we've been chatting about that. I know there is some desire for us to do that. We're not signaling it here, but we certainly are signaling that we're going to provide more clarity around the five-year growth rate and the capital associated with it, and we'll see where that goes. Operator: Our next question comes from Tate Sullivan with Maxim Group. Tate Sullivan: Just one follow-up on FEP. Jeff, how long, if you can share, have you been evaluating this project and at the scale, I mean, was it when you saw Energy Transfer go forward with the Phase IX project? Or how is the timing, if you can give some background on the project evaluation timing, please? Jeffrey Householder: Back in the mid-'90s, I actually worked for NUI that owned Florida City Gas. And we recognized at that time, and I'm not kidding, recognized at that time that we had significant capacity shortfalls into the South Florida area. One of the things that we thought was attractive, frankly, about the Florida City Gas acquisition was an opportunity to play a more direct role in trying to resolve some of those capacity issues. And I think, obviously, you've seen others in that market area having the same issues. The Phase IX expansion on FGT was certainly a significant opportunity to think about moving additional upstream interstate pipeline capacity down towards South Florida. And then the issue is how does it get further down into the market area. And so we were fortunate to be able to cobble together an arrangement with Florida Gas Transmission and with Florida Power & Light. And we're pretty excited about the project. I mean it helps service reliability in that area. I think there's a lot to be said about service resilience. It allows us to continue to grow and expand and meet customer demand in that area. And I think it does the same thing on the electric service side. So it's a great project. A lot of people holding hands to get it done. And I think we'll see finally after all these years, the opportunity to bring additional gas capacity into South Florida. Tate Sullivan: Being an intrastate project, will this be your first partnership intrastate pipeline project? I believe it will be in terms of financing with them. Jeffrey Householder: Yes, that's exactly right. It is. Tate Sullivan: And then just separately on the WRU project, you note in the presentation, still exploring potential expansions once it's in service. Is that a given that it gets regulatory approval for expansion due to required peaking needs and redundancy needs, please? Jeffrey Householder: Well, I'd like to think that it's a given. I never assume that. But I mean the need is certainly there. The demand from the customers and the growth in service connections on the Delmarva Peninsula is substantial, and it hasn't slowed down in years and years, and we don't see a whole lot of backing off in our look at developments and house construction there and all the other things that go with it. We're seeing a significant uptake in things like health services, hospital expansions and those sorts of things that are substantial gas users. So I think the demand for service certainly indicates that we'd be prepared to meet those service obligations. And at this point, the LNG facility sitting in Maryland that feeds into our Eastern Shore transmission system and ultimately provides services into our distribution systems and potentially others is the least expensive way and most efficient way to actually provide that service. So I think there is a good argument, a very solid case to be made that meeting the service demand issues that we have on that peninsula over the long term, at least at this point, are best met by these LNG facilities. So I think there is a good opportunity to expand it. Operator: We will move next with Chris Ellinghaus with Siebert Williams Shank. Christopher Ellinghaus: Jeff, can you give us any color on sort of progress on the Virginia feasibility study or anything going on with Canaveral? Jeffrey Householder: Well, yes, there's several things going on there. As you know, we were successful in getting the state grant that went to Accomack County that subsequently was awarded to us to do the feasibility study and some of the preliminary engineering work on trying to expand into that area down toward the Wallops Island facility and also to the various other potential customers in that part of the state. We're pretty excited about that. We're in the middle of that process now beginning the feasibility analysis. It's not an easy project. There's a lot involved in building a pipeline down to that part of Virginia. But we're halfway down that way at this point, and we're trying to see if we can figure out a rational way to continue to expand into that territory. There's a lot of interest on the part of the potential customers down there, a lot of support, obviously, from the governmental entities that have enabled this grant to go forward. And so we'll see where that leads. But I'm pretty happy about where we are in our role in potentially bringing natural gas service to that part of Virginia for the first time. On the Canaveral front, we continue to do what we have been trying to do, which is to find an appropriate piece of property to locate an LNG facility that would allow us to fuel both the space program as well as the cruise ships that are coming in and out of Port Canaveral. I think we have, without going too far down this path, I think we have identified out of the 14 or 15 pieces of property that we've looked at, including the one at the port that the Port Commission decided they did not want us to build on. We have an opportunity to look at another piece of property that's water side that I think might have some real opportunities for us. So again, we continue to work with the governmental agencies in Washington, and NASA, the state Space Florida folks and others that are interested in getting natural gas to the Space Coast plus the Port of Canaveral. And so there continue to be, as you well know, LNG facilities or LNG ships that continue to come in and out of that port. They're either barging LNG down from places like Jacksonville or they're fueling offshore in the Bahamas. And so we think there's a real opportunity to do something there, and we're going to continue to be pretty aggressive in trying to secure the property and get the project under construction. Christopher Ellinghaus: Okay. Great. Jeff, there's also a fairly palpable slowdown in customer growth across a pretty varied geography across the U.S. Can you just talk about what you're seeing in any headwinds? Customers usually relate to housing. So anything that you're seeing in particular in your regions? Jeffrey Householder: Yes. I mean we are seeing some slowdown, I think. It's reflected in the numbers that I just mentioned a moment ago. But we're also continuing to see things like on the Delmarva Peninsula growth rate that's still double what you would typically see around the country. And in Florida, when you add the FPU and City Gas numbers together, you're still at a pretty healthy growth rate. So, we're looking pretty carefully at our lot inventories, the developments that we have under contract, talking to homebuilders in the areas that we serve. And I think your comment is accurate. I think there is a general slowdown, but it's still going pretty quickly for us in the service territories that we're in. And we see good healthy construction activity going on and customers still having a substantial interest in connecting to our gas systems. So yes, I would agree with you. I think there is a little bit of a slowdown from kind of peak levels from a few years ago, but nothing alarming to us at this point. Operator: [Operator Instructions] We will move next with Paul Fremont with Ladenburg. Paul Fremont: Great. First of all, congratulations on the FEP announcement. That's very impressive. When you guys do provide an EPS growth rate on a longer-term basis, I would think the FEP project is a pretty lumpy project that would affect that growth rate. So would you be looking to potentially indicate what the growth rate would be through the completion of the project and then sort of a more normalized growth rate beyond? Or how would you sort of approach that? Jeffrey Householder: Yes. Thanks, Paul. I think you're right about the five-year cycle. It's obviously going to go out through 30 or 31 at this point in time, which would capture the impact of FEP at least in the first year. I'm not sure we've settled on exactly how to tell that story yet, but you can expect at least some visibility across the five years. And then we're thinking about how to sort of bridge the early years in that five-year plan. So more to come on that. Paul Fremont: Great. And when I look at sort of the numbers through '28, it looks like at the midpoint, the capital spending would be up about $350 million. How much of that is FEP? Jeffrey Householder: We haven't disclosed FEP numbers yet in that total. Again, you can expect that there's a ramp-up and ramp down in this project. And so in the early part of that project, sort of limited capital and the meat of that really comes in the center of that period between now and 2030. Paul Fremont: Great. And then you basically have indicated or quantified the negative impact of the LNG storage delay at about $0.10. Would there be a significant offset to that based on sort of the $100 million of CapEx that you announced today? Jeffrey Householder: Most of that CapEx, I mean, is probably, the way I would think about that, Paul, is most of that CapEx is really pointed at 2028 and beyond. '26 is pretty much a big year. In terms of earnings. Paul Fremont: And then just going back to sort of the storage facility in the Delmarva, do you plan on having an open season? And if so, at what time frame would that occur? Jeffrey Householder: In terms of the expansion potential that was. Paul Fremont: Yes. Yes. Jeffrey Householder: I would expect that you will see an open season and certainly similar to what we did before, just gaining interest and then ultimately kind of thinking about long-term needs, both for our distribution units and any other customer that might show up there or has needs. Timing isn't clear at this point in time, but we'll obviously be in front of you with some information in terms of the open season process, which obviously takes some time to kind of work through. Operator: At this time, there are no further questions in queue. I will now turn the meeting back to Jeff Householder for closing comments. Jeffrey Householder: Well, thank you all for joining the call today, and we will talk to you very soon, I'm sure, with more updates on some of the exciting things we're doing here. Goodbye. Thank you. Operator: This concludes Chesapeake Utilities Corporation's Second Quarter 2026 Earnings Conference Call. 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Interested in Chesapeake Utilities Corporation? Here are five stocks we like better. Chesapeake Utilities raised its 2026 capital-spending guidance by $100 million to $550 million–$600 million, driven by higher regulated investment and initial spending on major infrastructure projects. The proposed $1.2 billion Florida Energy Pathway would build a 97-mile intrastate gas pipeline serving South Florida, with expected in-service in 2030 and nearly 250,000 decatherms per day of shipper commitments. Second-quarter adjusted net income rose 5% to about $25 million and adjusted EPS increased 1% to $1.05, while customer growth remained healthy and management reaffirmed its 2028 adjusted EPS target of $7.75–$8.00. 3 Companies That Just Raised Dividends; 2 to Buy, 1 to Avoid Chesapeake Utilities (NYSE:CPK) reported higher second-quarter adjusted earnings and raised its 2026 capital-spending outlook, citing continued customer growth, transmission and infrastructure investment, and the planned Florida Energy Pathway natural gas project. Chair, President and Chief Executive Officer Jeff Householder said adjusted net income rose 5% in the first half of 2026, while adjusted earnings per share increased 8%. During the second quarter, the company generated an incremental $10 million of margin from growth in its transmission, infrastructure and distribution systems and invested $140 million of capital, bringing year-to-date investment to $262 million. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth The company raised its full-year 2026 capital guidance by $100 million to a range of $550 million to $600 million. Householder said the increase reflects initial spending on the Florida Energy Pathway, or FEP, as well as higher regulated distribution and infrastructure investment. Chesapeake announced the FEP project in July. The proposed 97-mile intrastate natural gas transmission line would run from Palm Beach County to Miami-Dade County and is designed to address transmission constraints and increased natural gas demand in South Florida. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High Householder described FEP as the largest single project in Chesapeake’s history, with total investment expected to be approximately $1.2 billion. Peninsula Pipeline Company, a Chesapeake subsidiary, will construct and operate the line and expects to fund and own at least 51% of the project. The company is discussing arrangements with potential partners that could fund and own up to 49%. The project is expected to enter service in 2030 and has commitments from multiple investment-grade shippers for nearly 250,000 decatherms per day of capacity, according to Householder. Chesapeake is continuing to accept binding commitments from additional shippers. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling In response to analyst questions, Householder said the partnership structure is intended to maintain a reasonable balance of risk for a project of FEP’s size. He said the company expects to invest roughly $600 million on its portion of the project before revenues begin in 2030. Householder said FEP is regulated by the Florida Public Service Commission because it is an intrastate pipeline project. The company expects permitting to begin in earnest and said the route will largely use public rights of way through three South Florida counties, limiting the need for land acquisition. The company now expects capital investment to exceed $2.2 billion from 2024 through 2028, up from its prior five-year range. Management plans to provide 2027-2031 capital-expenditure guidance and a 2027-2031 earnings growth rate during its full-year 2026 earnings call in February. Senior Vice President and Chief Financial Officer Jeff Sylvester said second-quarter adjusted gross margin rose 5% from a year earlier to approximately $150 million. Adjusted net income also increased 5% to approximately $25 million, while adjusted earnings per share rose 1% to $1.05. Sylvester said the smaller per-share increase reflected shares issued over the past year as the company moved toward its target capital structure. Transmission expansion projects contributed $0.15 per share of adjusted earnings in the quarter, while infrastructure-program investment added $0.10 per share. Natural gas distribution demand contributed another $0.06 per share, and improved propane and Aspire performance added $0.06 per share. Those gains were partly offset by increased depreciation, amortization and property-tax expenses associated with growing capital investment, along with higher facility, vehicle, insurance, collections, customer-service, payroll and benefit costs. Financing activity, including debt and equity issuances over the past 12 months, reduced adjusted EPS by $0.05, Sylvester said. Regulated segment adjusted gross margin increased 6% to about $125 million. Regulated operating income rose 7% to approximately $55 million. Unregulated energy segment adjusted gross margin increased 2% to roughly $25 million. First-half operational expenses represented 45% of gross margin, the company’s lowest level to date. As of June 30, Chesapeake’s equity capitalization was 50%, and it had 70% of its $798 million total debt capacity available. The company also amended its revolving credit agreement, increasing total borrowing capacity by $200 million to $650 million. The revolver includes a $250 million, 364-day tranche and a $400 million, five-year tranche expiring in August 2031. Householder said customer growth remained above average across Chesapeake’s service territories, with residential customer growth of 3% in Delmarva, 2.1% at Florida Public Utilities and 1.8% at Florida City Gas. He acknowledged a broader slowdown from peak housing-growth levels in recent years but said activity in the company’s markets remains healthy. For Florida City Gas, Executive Vice President, General Counsel, Corporate Secretary and Chief Policy and Risk Officer Jim Moriarty said Chesapeake filed earlier this year for a base-rate adjustment of about $47 million and requested an 11.25% return on equity. The Florida Commission approved a $16 million annualized interim rate adjustment in late July, which Moriarty said is expected to generate more than $6 million of additional revenue in 2026. Householder said the company would continue working with Florida Public Service Commission staff and the Office of Public Counsel, though he said Chesapeake is prepared to litigate the rate case if a settlement is not reached. Chesapeake said construction of its Worcester Resiliency Upgrade LNG storage facility remains on schedule, with the full project expected to be online early next year. The company expects its listed transmission projects to contribute about $33 million of gross margin in 2026 and an additional $51 million in 2027. The company is also advancing permitting for its Delmarva Regional Enhancement project, with construction expected to begin next year. Chesapeake is conducting a feasibility analysis for potential gas service expansion in Accomack County, Virginia, and continues to evaluate property opportunities for LNG transportation and storage serving the Cape Canaveral and Port Canaveral area. Sylvester reaffirmed Chesapeake’s 2028 adjusted EPS guidance of $7.75 to $8.00. The company also cited its 7.3% most recent annual dividend increase and said its next quarterly dividend payment will be $0.74 per share. Chesapeake Utilities Corporation (NYSE: CPK) is a diversified energy services holding company headquartered in Dover, Delaware. Through its operating subsidiaries, the company engages in natural gas distribution, transmission and storage; propane distribution; wholesale propane supply; and contract compression and natural gas liquids processing. Its core mission is to provide safe, reliable and cost-effective energy solutions to residential, commercial and industrial customers across multiple U.S. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Chesapeake Utilities Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Adjusted Net Income: Approximately $25 million in Q2 2026, up 5% from Q2 2025. Adjusted Earnings Per Share (EPS): $1.05 in Q2 2026, a 1% increase year-over-year. Adjusted Gross Margin: Approximately $150 million in Q2 2026, up 5% from the prior-year quarter. Regulated Segment Adjusted Gross Margin: Approximately $125 million in Q2 2026, up 6% year-over-year. Regulated Segment Operating Income: Approximately $55 million in Q2 2026, up 7% from Q2 2025. Unregulated Energy Segment Adjusted Gross Margin: Approximately $25 million in Q2 2026, up 2% year-over-year. Capital Investment: $140 million invested in Q2 2026, bringing year-to-date total to $262 million. Operational Expenses: Represented 45% of gross margin for the first half of 2026, the lowest point to date. Dividend: Next dividend payment of $0.74 per share, aligned with the Board-approved payout target range of 45% to 50%. 2028 EPS Guidance: Reaffirmed at $7.75 to $8.00. Warning! GuruFocus has detected 6 Warning Signs with CPK. Is CPK fairly valued? Test your thesis with our free DCF calculator. Release Date: August 07, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Adjusted net income increased 5% and adjusted EPS rose 8% in the first half of 2026, driven by strong margin growth from transmission and distribution investments. Announced the Florida Energy Pathway Project (FEP), a $1.2 billion intrastate pipeline, the largest in company history, with committed shippers for nearly 250,000 dekatherms per day. Raised full-year 2026 capital guidance by $100 million to $550-$600 million, reflecting robust investment opportunities and strong project pipeline. Customer growth remains above national averages, with 3% growth in Delmarva and 2.1% in Florida Public Utilities, supported by strong population growth in key service areas. Secured $16 million in interim rate relief for Florida City Gas, providing immediate revenue support while the full rate case progresses. Adjusted EPS growth of only 1% in Q2 2026 was tempered by increased share count from recent equity issuances, diluting per-share earnings. Higher depreciation, amortization, and property tax expenses ($0.11 per share) from increased capital investment pressured earnings. Operating expenses rose due to higher facility, vehicle, insurance, credit collection, and customer service costs, partially offsetting margin gains. The Florida City Gas rate case faces opposition from the Office of Public Counsel, with a potential for full litigation rather than a settlement. The Worcester Resiliency Upgrade (WRU) project, a key growth driver, is delayed, with full service expected only in early 2027, impacting near-term margin contributions. Q: Regarding the Florida Energy Pathway (FEP) project, what is the regulatory and permit path, and how is commercial interest shaping up? Is there an opportunity to upsize, and how might this fit into the bigger update at year-end?A: Jeff Sylvester (CFO) noted that while specific shipper details aren't disclosed, the committed volumes are meaningful. The company is actively seeking additional load and expects growth in the project's potential. The February update will be significant, with more clarity expected once the partnership structure is finalized within the quarter. Jeff Householder (CEO) added that as an intrastate pipeline under Peninsula Pipeline Company, it is jurisdictional to the Florida Public Service Commission. Permitting is about to begin in earnest with state agencies, and since the project will largely use public rights-of-way, land acquisition is minimal, and the process is expected to go relatively smoothly. Q: What is the rationale behind the partnership structure for the FEP project, and how is it contemplated within the funding plan?A: Jeff Householder (CEO) explained that the partnership helps balance the risk of a project this size and mitigates the impact on the earnings profile during the construction period leading up to revenue generation in 2030. The company felt comfortable with a manageable amount of capital over an extended period, which led to the decision to bring in a partner for up to 49% ownership. Jeff Sylvester (CFO) added that this approach also preserves capacity to pursue other meaningful projects in their service areas. Q: Is there common ground for a settlement in the Florida City Gas (FCG) rate case?A: Jeff Householder (CEO) stated that while a settlement is always possible, the Office of Public Counsel has staked out a position completely opposite to the company's filing. He noted this is not unusual in such proceedings, but the company is prepared to fully litigate the case if necessary and will see how the process unfolds. Q: Do you plan to provide EPS guidance for 2027 and beyond 2028 in the February update?A: Jeff Householder (CEO) acknowledged the desire for such guidance but did not commit to it. He reiterated that the company will provide more clarity around the five-year growth rate and associated capital, and will see where that goes. Q: How long have you been evaluating the FEP project, and was it triggered by Energy Transfer's Phase 8-9 project?A: Jeff Householder (CEO) revealed that the capacity shortfall in South Florida was recognized as far back as the mid-1990s when he worked for NUI, which owned Florida City Gas. The FCG acquisition was partly attractive due to the opportunity to address these issues. The FGT Phase 9 expansion was a significant catalyst, and the company successfully arranged a partnership with Florida Gas Transmission and Florida Power & Light to bring additional gas capacity into South Florida, enhancing service reliability and supporting growth. Q: Is the FEP project your first partnership intrastate pipeline project?A: Jeff Householder (CEO) confirmed that this is indeed the company's first partnership intrastate pipeline project in terms of financing. Q: Regarding the WRU LNG project, is an expansion a given once it's in service, given the need for peaking and redundancy?A: Jeff Householder (CEO) stated that while he never assumes regulatory approval, the need is certainly there. Demand from customer growth on the Delmarva Peninsula remains substantial, with significant uptake in health services and hospital expansions. The LNG facility is the least expensive and most efficient way to meet these service obligations, making a strong case for expansion. Q: Can you provide an update on the Virginia feasibility study and the Canaveral LNG project?A: Jeff Householder (CEO) said the Accomack County feasibility study is underway, with the company exploring a pipeline down to the Wallops Island facility and other potential customers. There is strong interest and governmental support. For Canaveral, after reviewing 14-15 properties, the company has identified a new waterside piece of property that presents real opportunities. They continue to work with agencies like NASA and Space Florida to bring natural gas to the Space Coast and Port Canaveral, and remain aggressive in securing property and moving the project forward. Q: There is a palpable slowdown in customer growth across the US. What are you seeing in your regions?A: Jeff Householder (CEO) acknowledged a slight slowdown from peak levels but noted that growth in their service areas remains well above national averages. The Delmarva Peninsula growth rate is still double the typical national rate, and combined FPU and Florida City Gas growth remains healthy. The company is closely monitoring lot inventories and development contracts but sees no alarming trends. Q: When you provide the longer-term EPS growth rate, how will you handle the lumpy impact of the FEP project? Will you indicate a growth rate through completion and a normalized rate beyond?A: Jeff Sylvester (CFO) acknowledged the challenge, noting the five-year cycle will extend through 2030 or 2031, capturing FEP's initial impact. The company hasn't settled on the exact presentation but expects to provide visibility across the five years and is considering how to bridge the early years of the plan. Q: Of the approximately $350 million increase in capital spending through 2028, how much is attributable to FEP?A: Jeff Sylvester (CFO) did not disclose specific FEP numbers but explained that the project will have a ramp-up and ramp-down in capital spending. The early years will see limited capital, with the majority of investment occurring in the middle of the period between now and 2030. Q: You quantified the negative impact of the LNG storage delay at about $0.10. Will the $100 million CapEx increase announced today provide a significant offset?A: Jeff Sylvester (CFO) clarified that most of the increased CapEx is pointed at 2028 and beyond, with 2026 being a significant year for earnings. The offset from the new capital is not expected to be significant in the near term. Q: Do you plan to have an open season for the Delmarva LNG storage facility expansion, and when might it occur?A: Jeff Sylvester (CFO) confirmed For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was driven by incremental margin from transmission and distribution growth, alongside strong residential customer expansion in Delmarva and Florida. Management attributed the 5% increase in adjusted net income to robust demand for natural gas in attractive service areas experiencing high population growth. The Florida Energy Pathway (FEP) project was launched to address significant transmission capacity constraints and rising natural gas demand in South Florida. Operational efficiency reached a record high, with operational expenses representing only 45% of gross margin for the first half of the year. Strategic positioning was bolstered by the Florida City Gas acquisition, which provided the foundation for the company's largest-ever infrastructure project. Management noted that while a general housing slowdown is occurring nationally, their specific service territories continue to see double the typical national growth rate. Full-year 2026 capital guidance was increased by $100 million to a range of $550 million to $600 million, driven by initial FEP spending and regulated infrastructure. The company raised its five-year capital investment expectation to exceed $2.2 billion through 2028, reflecting a significant pipeline of expansion opportunities. Management plans to provide a comprehensive update in February 2027, including new five-year capital guidance and earnings growth rates through 2031. The Worcester Resiliency Upgrade LNG facility is on schedule to come online in early 2027, Transmission projects listed on Slide 9 are expected to contribute an additional $51 million in gross margin in 2027. Future earnings growth assumes a 2028 EPS target of $7.75 to $8.00, supported by a disciplined capital allocation strategy and a 45% to 50% dividend payout ratio. A $47 million base rate case for Florida City Gas is pending, with $16 million in annualized interim rates already approved to generate revenue in 2026. The FEP project will utilize a partnership structure (Chesapeake owning at least 51%) to manage the risk and capital intensity of the $1.2 billion investment. Management flagged that the Office of Public Counsel has taken a position opposite to the company's rate case filing, indicating potential for full litigation. The Delmarva regional enhancement and Accomack County projects are in permitting and feasibility stages, with construction starts dependent on regulatory timelines. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. The project is jurisdictional to the Florida PSC and will primarily operate under the Peninsula Pipeline Company as an intrastate asset. Permitting is expected to be smooth as the route largely utilizes public rights-of-way, minimizing the need for extensive land acquisition. Management confirmed the project is anchored by investment-grade shippers and they are currently evaluating additional load interest. The partnership is designed to balance the risk of a project this magnitude and manage the earnings profile during the heavy construction years. Sharing the $1.2 billion capital burden ensures the company maintains capacity to pursue other meaningful projects in its service areas simultaneously. The company is conducting a feasibility study for the Accomack County expansion, supported by a state grant, to serve Wallops Island and other customers. For Port Canaveral, management has identified a potential waterside property for an LNG facility to fuel the space program and cruise ships after previous site rejections.

Net income and earnings per share ("EPS")* were $25.4 million and $1.05, respectively, for the second quarter and $84.7 million and $3.51, respectively, year to date Year-to-date growth rate of 8.0 percent on Adjusted EPS**, which excludes the transaction and transition-related expenses attributable to the acquisition and integration of Florida City Gas ("FCG") Adjusted gross margin** growth of $7.4 million for the second quarter and $31.2 million year to date, representing a 9.6 percent growth rate for the six months ended June 30, 2026, driven largely by transmission expansion projects, regulatory initiatives and infrastructure programs, natural gas organic growth, and improved contributions from unregulated businesses. The Company is increasing its 2026 capital guidance range to $550 - $600 million in light of advances on various capital projects DOVER, Del., Aug. 6, 2026 /PRNewswire/ -- Chesapeake Utilities Corporation (NYSE: CPK) ("Chesapeake Utilities" or the "Company") today announced financial results for the three and six months ended June 30, 2026. Additional highlights include: Announced the Florida Energy Pathway ("FEP") project, a $1.2 billion natural gas pipeline project in south Florida with approximately 250,000 Dts/d of committed capacity; targeted in-service date in 2030 Increased capacity under the Company's revolving credit facility to $650 million to support capital investment growth Capital investment of $139.7 million during the second quarter of 2026, bringing the year-to-date total to $261.6 million Interim rates of $16.2 million on an annualized basis, effective in July 2026, were approved by the Florida Public Service Commission ("PSC") in connection with the Company's ongoing FCG rate case "Our second quarter results demonstrate consistent operational and financial performance as we make substantial progress on transforming for the next phase of sustained enterprise growth," said Jeff Householder, the Company's Chair of the Board, President and Chief Executive Officer. "We are also excited to be moving forward with the Florida Energy Pathway infrastructure project. This represents a significant investment opportunity to bring capacity and reliability to south Florida and support long-term growth across the state." Earnings and Capital Investment Guidance The Company is increasing its 2026 capital expenditure guidance by $100 million to $550 - $600 million, driven primarily by increases in transmission (including initial investments in FEP), distribution and infrastructure investments. The Company had previously issued long-term capital guidance for the 2024 - 2028 period of $1.5 - $1.8 billion. Given a robust capital investment program to date and the recently announced FEP project, the Company expects to achieve capital investment of approximately $1.4 billion through 2026 and total investment exceeding $2.2 billion for the five-year period ended 2028. The Company also continues to reaffirm its 2028 earnings guidance of $7.75 - $8.00 per share. As the Company continues discussions with potential partners for the FEP project and makes additional progress on its long-term investment opportunities, the Company expects to provide a long-term guidance update during its Full-Year 2026 earnings call in February 2027. At that time, the Company expects to provide a capital guidance range and EPS growth rate for the 2027 - 2031 period. *Unless otherwise noted, EPS and Adjusted EPS information are presented on a diluted basis. Non-GAAP Financial Measures **This press release including the tables herein, include references to both Generally Accepted Accounting Principles ("GAAP") and non-GAAP financial measures, including Adjusted Gross Margin, Adjusted Net Income and Adjusted EPS. A "non-GAAP financial measure" is generally defined as a numerical measure of a company's historical or future performance that includes or excludes amounts, or that is subject to adjustments, so as to be different from the most directly comparable measure calculated or presented in accordance with GAAP. The Company's management believes certain non-GAAP financial measures, when considered together with GAAP financial measures, provide information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionately positive or negative impact on results in any particular period. The Company calculates Adjusted Gross Margin by deducting the purchased cost of natural gas, propane and electricity and the cost of labor spent on direct revenue-producing activities from operating revenues. The costs included in Adjusted Gross Margin exclude depreciation and amortization and certain costs presented in operations and maintenance expenses in accordance with regulatory requirements. The Company calculates Adjusted Net Income and Adjusted EPS by deducting costs and expenses associated with significant acquisitions that may affect the comparison of period-over-period results. These non-GAAP financial measures are not in accordance with, or an alternative to, GAAP and should be considered in addition to, and not as a substitute for, the comparable GAAP measures. The Company believes that these non-GAAP measures are useful and meaningful to investors as a basis for making investment decisions, and provide investors with information that demonstrates the profitability achieved by the Company under allowed rates for regulated energy operations and under the Company's competitive pricing structures for unregulated energy operations. The Company's management uses these non-GAAP financial measures in assessing a business unit and Company performance. Other companies may calculate these non-GAAP financial measures in a different manner. The following tables reconcile Gross Margin, Net Income, and EPS, all as defined under GAAP, to the Company's non-GAAP measures of Adjusted Gross Margin, Adjusted Net Income and Adjusted EPS for each of the periods presented. Adjusted Net Income and Adjusted EPS Financial Summary Highlights Key variances between the second quarter of 2025 and 2026 included: Key variances between the six months ended June 30, 2025 and June 30, 2026 included: Major Projects and Initiatives (ongoing and recently completed) The Company continues to execute on its strategic plan driving significant investment in its service territories. A summary table of major project and initiatives is presented below with a comprehensive discussion of each of the items presented in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2026. Adjusted Gross Margin Forward-Looking Statements Matters included in this release may include forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those in the forward-looking statements. Please refer to the Safe Harbor for Forward-Looking Statements in the Company's 2025 Annual Report on Form 10-K and as may be identified in subsequent Reports on Form 10-Q for further information on the risks and uncertainties related to the Company's forward-looking statements. Conference Call Chesapeake Utilities (NYSE: CPK) will host a conference call on Friday, August 7, 2026, at 8:30 a.m. Eastern Time to discuss the Company's financial results for the three and six months ended June 30, 2026. To listen to the Company's conference call via live webcast, please visit the Events & Presentations section of the Investors page on www.chpk.com. For investors and analysts that wish to participate by phone for the question and answer portion of the call, please use the following dial-in information: Toll-free: 800.245.3047International: 203.518.9765Conference ID: CPKQ226 A replay of the presentation will be made available on the previously noted website following the conclusion of the call. About Chesapeake Utilities Corporation Chesapeake Utilities Corporation is a diversified energy delivery company, listed on the New York Stock Exchange. Chesapeake Utilities Corporation offers sustainable energy solutions through its natural gas transmission and distribution, electricity generation and distribution, propane gas distribution, mobile compressed natural gas utility services and solutions, and other businesses. For more information, contact: Lucia M. DempseyHead of Investor Relations347.804.9067 View original content to download multimedia:https://www.prnewswire.com/news-releases/chesapeake-utilities-corporation-reports-second-quarter-2026-results-302845424.html

Interested in Chesapeake Utilities Corporation? Here are five stocks we like better. Chesapeake Utilities reported a strong Q1, with adjusted net income up 16% and adjusted EPS up 11% year over year, helped by natural gas demand, infrastructure investments, updated rates and colder weather. The company’s WRU LNG storage project in Maryland was delayed by regulatory timing, severe winter weather and design changes, cutting 2026 EPS by about $0.10, though it is still expected to start up early next year. Chesapeake filed a Florida City Gas rate case seeking a $47 million base rate increase, and also boosted its annualized dividend by 7.3% to $2.94 per share while reaffirming its long-term EPS growth targets. 3 Companies That Just Raised Dividends; 2 to Buy, 1 to Avoid Chesapeake Utilities (NYSE:CPK) reported a higher first-quarter profit and margin, citing natural gas demand, infrastructure investments, updated rates and colder winter weather across parts of its service territory. Jeffry M. Householder, chair, president and chief executive officer, said the company had a “strong start to the year,” with adjusted net income rising 16% and adjusted earnings per share increasing 11% from the first quarter of 2025. Adjusted gross margin was approximately $206 million, up 13%, while adjusted net income was approximately $59 million. Adjusted EPS was $2.47. → Wells Fargo’s Comeback Is Real—But Not Risk-Free Householder said Chesapeake generated an incremental $12 million of margin from transmission and infrastructure projects and $11 million from distribution system growth, updated rates and higher customer usage tied to colder winter weather. Householder said the company continued to see solid commercial customer growth and above-average residential customer growth. Residential customer growth was 3.3% in Delmarva, 2.2% for Florida Public Utilities and 2% for Florida City Gas. → Rocket Lab Posts Record Q1 Revenue, Raises Q2 Guidance “Increasing demand for natural gas and propane remains core to our long-term growth strategy,” Householder said, adding that population growth, homebuilding and customer needs continue to support investment opportunities across Chesapeake’s delivery systems. The company invested $122 million of capital through the end of the first quarter, in line with its full-year 2026 capital expenditure guidance of $450 million to $500 million. Householder said major capital projects are expected to contribute about $31 million of gross margin in 2026 and an additional $20 million in 2027. → The Great Crypto Thaw: Regulation Ignites an Infrastructure Boom Householder provided an update on the company’s WRU liquefied natural gas storage facility in Bishopville, Maryland, saying construction had made significant progress but that the project’s schedule had been affected by earlier regulatory timing, severe winter weather and design modifications intended to simplify future expansion. He said snow, ice and freezing temperatures in January and February “significantly limited the pace of construction,” with the site inaccessible for several days because of roadway travel restrictions. While the cold weather benefited customer usage and margins in existing businesses, Householder said it was “not helpful” to the WRU construction timeline. The schedule changes mean Chesapeake expects “significantly reduced” margin contributions from WRU in 2026. Householder said the impact will be partially offset by weather-related margin benefits and incremental Eastern Shore Natural Gas peaking capacity, but full-year EPS will be reduced by approximately $0.10. The project remains expected to come online early next year and generate $17 million of 2027 margin. Householder also said the extreme winter temperatures reinforced the need for the project and could support a potential expansion of LNG facilities at the site in the future. James F. Moriarty, executive vice president, general counsel, corporate secretary and chief policy and risk officer, said Chesapeake filed a rate case on April 20 for Florida City Gas. The company is requesting a base rate increase of approximately $47 million and a return on equity of 11.25%. The filing also includes a request for interim rates of $16 million, which Moriarty said the company expects to be effective in the third quarter. A full procedural schedule has not yet been set, but Chesapeake expects a hearing in the fourth quarter of 2026 or early 2027, with full rates effective shortly thereafter. Moriarty said the request updates cost recovery for capital investment, operating expense, insurance, depreciation and property taxes. He added that Chesapeake incorporated cost savings and efficiencies into its assumptions “wherever possible” and intends to work with Florida Public Service Commission staff and the Office of Public Counsel toward a constructive outcome. Jeffrey S. Sylvester, senior vice president and chief operating officer and incoming chief financial officer, said regulated segment adjusted gross margin was approximately $148 million, up 15% from the prior-year quarter. Regulated operating income rose 18% to approximately $71 million. In the unregulated energy segment, adjusted gross margin increased 8% to approximately $59 million, driven primarily by higher propane consumption and strong performance in the company’s Ohio Aspire operations. Unregulated operating income grew 8% to $28 million. Sylvester said first-quarter adjusted EPS benefited from several factors: $0.27 from continued natural gas demand, including transmission capital projects and distribution growth; $0.17 from infrastructure program investments; $0.13 from permanent rates tied to three rate cases; $0.14 from cold weather across the system; and $0.07 from improved Aspire performance and gains from off-system natural gas sales. Those gains were partly offset by higher payroll and benefits expense, increased operating expenses, higher credit, collections and customer service costs, depreciation and amortization, and financing activities. At March 31, Sylvester said Chesapeake’s equity capitalization was 50%, with 107,000 shares issued during the first three months of the year. The company expects to issue $60 million of equity in 2026 through its at-the-market and waiver programs. Sylvester also said Chesapeake expects to refinance the first tranche of debt issued during the Florida City Gas acquisition, which should reduce overall interest expense. Beth W. Cooper, executive vice president and chief financial officer, said the board approved a $0.20, or 7.3%, increase in the annualized dividend, from $2.74 per share to $2.94 per share. Cooper said this marks the company’s 66th consecutive year of dividend payments and 23rd consecutive year of dividend increases. Cooper also said Chesapeake remains committed to a long-term earnings per share compound annual growth rate of 8% through 2028 and reaffirmed 2028 EPS guidance of $7.75 to $8.00 per share. The company expects to revisit its capital guidance range by February 2027. The call also marked Cooper’s final earnings call before her planned retirement at the end of June after 36 years with the company, including 18 years as CFO. Householder said that during Cooper’s tenure as CFO, Chesapeake recorded earnings growth every year. Sylvester will assume the CFO role on July 1. He said one of his priorities has been implementing the company’s “one company approach” and related operational and technology transformations. During the question-and-answer session, Householder discussed several potential growth areas, including LNG opportunities near Cape Canaveral and Port Canaveral, data center-related gas demand in Ohio and other service areas, and possible intrastate pipeline expansion to increase natural gas capacity into South Florida. Chesapeake Utilities Corporation (NYSE: CPK) is a diversified energy services holding company headquartered in Dover, Delaware. Through its operating subsidiaries, the company engages in natural gas distribution, transmission and storage; propane distribution; wholesale propane supply; and contract compression and natural gas liquids processing. Its core mission is to provide safe, reliable and cost-effective energy solutions to residential, commercial and industrial customers across multiple U.S. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Chesapeake Utilities Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.

Image source: The Motley Fool. Thursday, May 7, 2026 at 8:30 a.m. ET Chair of the Board, President, and Chief Executive Officer — Jeffrey Householder Executive Vice President, Chief Financial Officer — Beth W. Cooper Senior Vice President, Chief Operating Officer, and incoming Chief Financial Officer — Jeffrey S. Sylvester Executive Vice President, General Counsel, Corporate Secretary, and Chief Policy and Risk Officer — James F. Moriarty Need a quote from a Motley Fool analyst? Email [email protected] Here at Chesapeake Utilities, safety is our first priority. We start all meetings with a safety moment, and we'll do so here as highlighted on Slide 3. May is Electrical Safety Month and a great time to ensure we are safely using the power of electricity. Be mindful of overloaded outlets, damaged cords and using electrical appliances near water. Also be sure to use lithium-ion batteries safely, only use the correct charger, avoid charging on beds or couches and never use damaged or overheating batteries. Small daily choices can prevent fires, injuries and protect ourselves, our homes and our loved ones. I'll now introduce our presenters today. Jeff Householder, Chair of the Board, President and Chief Executive Officer, will provide an update on this quarter's key accomplishments and our capital growth program. Jim Moriarty, Executive Vice President, General Counsel, Corporate Secretary and Chief Policy and Risk Officer, will discuss the Florida City Gas rate case and stakeholder engagement. Jeff Sylvester, current Senior Vice President and Chief Operating Officer and incoming Chief Financial Officer, joins us today for his first earnings call. Jeff will summarize our first quarter performance and financing updates. And Beth Cooper, Executive Vice President and Chief Financial Officer, who has announced her retirement at the end of June, joins us for her 71st and final earnings call. Beth will discuss dividend and earnings growth and then close with our value proposition. With that, it's my distinct pleasure to turn the call over to Jeff Householder. Jeffrey Householder: Thank you, Lucia, and good morning, all. Let me start today by recognizing Beth Cooper, who announced her retirement in March following 36 years of service to the company. In the last 18 years as our Chief Financial Officer, Beth's strategic and financial leadership has led to incomparable growth, including a $3 billion increase in our market capitalization, 10x growth in total assets and net income as well as a 366% increase in earnings per share. Most importantly, Beth embodies the best of Chesapeake Utilities. She has an authentic passion for delivering results and an impressive ability to build connections and relationships internally and externally. So thank you, Beth. It's been an honor to work alongside you. We are eternally grateful for your significant contributions to this company. I'd also like to welcome Jeff Sylvester to our call, who will transition from COO to formally assume the CFO role on July 1 of this year. Jeff brings deep financial and operational knowledge of our business, along with valuable expertise in data analytics and process and technology transformation, all of which are fundamental to our next stage of growth and development. I look forward to continuing to work closely with Jeff as we remain focused on the 3 pillars of our growth strategy, prudent deployment of capital, a proactive regulatory agenda and business transformation actions that meet the energy delivery and service expectations of our customers and communities. I'll now move on to Slide 5. We had a strong start to the year, reporting a 16% increase in adjusted net income and an 11% increase in adjusted earnings per share compared with the first quarter of last year. We generated an incremental $12 million of margin from transmission and infrastructure projects and $11 million of margin from distribution system growth, updated rates and increased customer usage given the much colder winter we experienced in the first quarter. Slide 6 highlights the connection between growth in our service areas and our long-term growth strategy. I can continue to report a quarter of solid commercial customer growth and above-average residential customer growth, 3.3% in Delmarva, 2.2% for Florida Public Utilities and 2% for Florida City Gas. Increasing demand for natural gas and propane remains core to our long-term growth strategy. Population growth, homebuilding and the needs of our customers continue to provide investment opportunities to upgrade and expand our energy delivery systems and invest in technology that provides safe, reliable and affordable service to our customers. Investing in our delivery systems and continuously improving our business operations to realize meaningful service and value improvements will drive long-term earnings growth and enable us to appropriately scale the enterprise. Now let's shift to Slide 7, which summarizes our 2026 projected capital program and our progress to-date. Through the end of the first quarter, we've invested $122 million of capital across the business. This is in line with our full year 2026 capital expenditure guidance of $450 million to $500 million. Slide 8 shows additional detail on our major capital projects. We forecast these projects to contribute approximately $31 million of gross margin in 2026 and an additional $20 million in 2027. We've made some recent updates to one of the projects on the table on Slide 9, WRU, our LNG storage facility in Bishopville, Maryland. As you can see in the latest photos on Slide 9, there has been significant construction progress at the Delmarva site. You may recall that last fall, the FERC Notice to Proceed process took a couple of months longer than we expected. We had hoped to make up much of this time, but the severe winter weather in the first quarter and a few design modifications that will simplify future expansion kept us from accelerating construction. The snow, ice and freezing temperatures we experienced in January and February significantly limited the pace of construction. The site was actually totally inaccessible for several days due to roadway travel restrictions. While the winter weather boosted usage and margins in our existing businesses, it was not helpful to the WRU construction schedule. WRU is a substantial complex project that will deliver significant peak day service capabilities to Delmarva customers. The tanks and primary structural and control room facilities are in place. We're working to complete the control electronics, on-site piping and interconnections to our Eastern Shore Natural Gas Transmission System. Coming out of this winter, I spent quite a bit of time assessing our progress and the overall project schedule. I'm happy with the effort we're making to push the project to completion. I'm also realistic about where we stand today and the need to build an additional time for a FERC commissioning process that is not governed by a specific time requirement. We're engaged in a third-party pre-commissioning process, so I don't foresee any substantive FERC issues, but we're building in additional time in the schedule. So the schedule changes mean that we expect significantly reduced margin contributions from WRU in 2026. This impact is partially offset by the margin benefits from weather this quarter and incremental Eastern Shore Natural Gas peaking capacity, which will be online prior to the full in-service date of WRU. However, full year EPS will be reduced by approximately $0.10. The project is still on track to come online early next year and generate $17 million of 2027 margin. I will say that the extreme temperatures this winter only solidified the need for this project and will likely lead to a potential LNG facility expansion at the site in the near future. Increased storage at the southern end of our system will further improve reliability, reduce supply costs during peak usage times and enable continued system expansion to serve customer growth in the future. I'll now shift to Slide 10 to highlight several projects that are in progress or on the horizon. There are a number of potential expansion opportunities ahead of us that provide significant growth potential as we serve growing demand across our service areas. The first is the Delmarva Regional Enhancement, which we discussed on our last earnings call. This $75 million 20-mile project expands transmission infrastructure in our Delmarva region. Permitting has begun and construction is expected to start next year. We are also evaluating opportunities for potential expansions of this project as demand remains high. We've also discussed a project to explore the potential for extending our Eastern Shore natural gas system into Accomack County, Virginia. Supported by a $6.5 million grant, we're beginning feasibility and design studies to assess the opportunity to serve customers on Virginia's Eastern Shore, including the NASA Wallops Island facility. We also remain engaged with partners in the community at the Cape and Port of Canaveral to explore potential opportunities for LNG transportation and storage. We're continuing to identify and evaluate potential sites for storage as demand remains high for the space and cruise industries there. And lastly, we continue to evaluate multiple opportunities to expand transmission capacity into South Florida to serve the substantial population growth and energy demand in the Greater Miami area. We ultimately believe that a future expansion into this area is necessary and are evaluating numerous options to meet the growing demand in South Florida. With that, I'll turn to Jim to provide regulatory and stakeholder engagement updates. James Moriarty: Thank you, Jeff, and good to be with all of you today. I'll start with Slide 11. On April 20, we filed a rate case for our Florida City Gas business, requesting a base rate increase of approximately $47 million and an ROE of 11.25%. This request comes more than 3 years following FCG's last rate increase request prior to our acquisition and updates cost recovery for a number of key areas, including capital investment, operational expense, insurance, depreciation and property taxes. Included in our filing was a request for interim rates of $16 million, which we expect to be effective in the third quarter of this year. While a full procedural schedule has not yet been set, we expect the hearing to occur in the fourth quarter of 2026 or in early 2027, with full rates expected to be effective shortly thereafter. We remain conscious of the impact to our customers, so we have incorporated cost savings and efficiencies across the business into our overall assumptions wherever possible. We value the opportunity to serve our FCG customers and we'll continue to work together with the Florida PSC staff and Office of Public Counsel to achieve a constructive outcome. Speaking of customers, I'll now turn to Slide 12 to provide an update on stakeholder engagement. In March of this year, we published our 2025 Annual Report, which includes highlights of our 2025 stakeholder engagement work, including investments in our teammates, customers and communities. We believe that serving all stakeholders creates a virtuous and sustainable cycle of long-term performance and growth. So we remain focused on driving collaboration and value with all those we serve so that no one is left behind. With that, I am very pleased to turn the call to Jeff Sylvester, who will discuss our financial results in more detail. Jeffrey S. Sylvester: Thanks, Jim, and good morning, everyone. I'm excited to be here today, and I'm honored to be stepping into the Chief Financial Officer role on July 1 of this year. I started my career in finance, so I'm looking forward to reengaging in our financial operations and expanding the collaboration between our finance and operational teams, the latter of which I've led for the last 7 years. A top priority of mine over that period has been the implementation of our One Company approach and related operational and technological transformations. Slide 13 provides an overview of our business transformation themes, all of which form a stronger platform for efficient and effective operations as we become a much larger organization. Mike Galtman, who has served as our Chief Accounting Officer for the last 7 years, has recently transitioned into a newly established Chief Transformation Officer role. His new responsibilities embed him deeply into our transformation efforts, including the [ One Core ] project and ongoing improvements across our finance, technology and operational areas. Melissa Barnes has recently joined the team as our new Chief Accounting Officer. Melissa brings a wealth of experience in technical accounting, external reporting, large-scale finance transformations and internal controls. She is already adding tremendous value, and we are excited to have her on board. Now shifting to the results for the quarter. As shown on Slide 14, our financial results continue to demonstrate strong performance and growth across all metrics. Adjusted gross margin was approximately $206 million, up 13% and adjusted net income was approximately $59 million, up 16% from the first quarter of 2025. Adjusted earnings per share were $2.47 this quarter, representing an 11% increase over the first quarter of 2025. Slide 15 provides additional detail on the key drivers of our first quarter performance. Continued demand for natural gas drove $0.27 of incremental adjusted EPS, including $0.21 related to transmission capital projects and a $0.06 of distribution growth across our service areas. Margin from our infrastructure program investments contributed an additional $0.17 per share this quarter and permanent rates from our 3 rate cases added $0.13 in the first quarter 2026 adjusted EPS. Cold weather across our system, particularly in Delmarva region and in our Propane and Aspire businesses drove increased consumption that added $0.14 of earnings for the quarter. We also benefited from improved Aspire system performance driven by rate changes and higher gathering fees. We also had gains from off-system natural gas sales within the quarter, driving a combined $0.07 of incremental earnings per share. These gains were partially offset by a few factors, including $0.20 of higher payroll and benefit expenses, $0.29 increased operational expenses, $0.04 of higher credit collections and customer service costs. As I mentioned earlier, we were able to achieve a higher percentage increase in operating income and net income as compared to gross margin, demonstrating that we are effectively managing our cost structure despite the significant growth in margin. We also incurred $0.05 per share of increased depreciation and amortization expense, driven by increasing levels of capital investment as we actively deploy capital. Lastly, financing activities included in our debt and equity issuances over the last 12 months as we return to our target capital structure, reduced adjusted EPS by $0.05. Shifting to Slide 16; adjusted gross margin for our regulated segment was approximately $148 million this quarter, up 15% from the first quarter of last year. As mentioned earlier, our focus on cost management enabled similar growth in our regulated operating income, up 18% to approximately $71 million in the first quarter of 2026. Our Unregulated Energy segment also demonstrated strong margin growth relative to the first quarter of last year, with adjusted gross margin of 8% to approximately $59 million in the first quarter of 2026. This incremental margin was primarily driven by higher propane consumption and strong performance in our Ohio Aspire operations. Much of this fell to the bottom line, enabling unregulated operating income growth of 8% to $28 million for the first quarter of this year. I'll now move to Slide 17 to review our capital structure and financing activities. At March 31, our equity capitalization was 50% with 107,000 shares issued during the first 3 months of the year. We also continue to maintain strong liquidity and sufficient capacity to support growth with ability of 74% of our total debt capital of $793 million between our revolving credit facility and private placement shelf facilities as of March 31, 2026. To support our robust capital investment program, we expect to issue $60 million of equity throughout full year 2026 using our ATM and waiver programs. We also look forward to refinancing the first tranche of debt issued during the Florida City Gas acquisition, which should generate overall interest expense savings. With that, it's my distinct pleasure to turn the call over to Beth. Beth Cooper: Thanks, Jeff, and good morning, everyone. As shown on Slide 18, yesterday, our Board of Directors approved a $0.20 or 7.3% increase in our annualized dividend payment from $2.74 per share to $2.94 per share. This reflects our 66th consecutive year of dividend payments and our 23rd consecutive year of dividend increases. Alongside our equity and debt plans, our dividend policy continues to be a key component of our capital allocation strategy as we fund growth capital investment to drive earnings growth and overall total shareholder return. Previously, our Board approved a dividend payout target range of 45% to 50% enabling us to deliver a long-term dividend CAGR of 9%, which aligns with our long-term earnings growth rate over that same 10-year time period. This payout ratio also enables us to retain 50% to 55% of earnings, which has been a meaningful part of our financing plan as we fund increasing levels of capital to drive sustainable business growth to meet increasing customer demand. Slide 19 demonstrates our track record of strong and consistent earnings growth over the last approximate 19 years, most of which made up my tenure as CFO. We remain committed to a long-term earnings per share compounded annual growth rate of 8% through 2028 and are reaffirming our 2028 earnings per share guidance of $7.75 to $8 per share. As we mentioned on previous calls, we expect to revisit our capital guidance range by February 2027, given the progress we have made in the last 2 years, coupled with our expectations for capital investment in 2026. Moving to Slide 20; there is no better way to close our call than to summarize what an amazing and wonderful place to work Chesapeake has been for me over the last 36 years. I am extremely grateful to have served as CFO for the last 18 years during such pivotal growth. Much of what has made my experience so special are the key drivers that often make Chesapeake a differentiated investment. Delivering on our promises and taking our commitment seriously has never wavered. We have driven significant growth over the last several decades, and I have complete confidence in the team's ability to continue this track record for years to come. Our talented team focused on our growth strategy is capable of great things. While these 3 pillars have been formalized in the last few years, they have always been core to our operations. We invest wisely, manage our regulatory agenda and continue to find new and better ways of working each and every year. Especially near and dear to me is our financial discipline. I participated in more than 20 acquisitions and over $2.5 billion of equity and debt raises across the last 3 decades and can assure you that each transaction is carefully planned and executed. We recognize the value of long-term relationships with our financial partners and prioritize our financial health, diligent financial planning and analysis as well as strategic alignment in all we do. And lastly, we are powered by our stakeholders, each and every one of you, our investors, our bankers, our partners, our teammates and our customers. We are nothing without our dedicated teammates, growing customers, close-knit communities and trusted partners. The bottom line is that the relationships we've built, both internally and externally are what matter the most. I will forever treasure the valuable connections I've made and will carry them with me as I embark on my next adventures. Thank you for your personal support and encouragement of me over the years. I have been humbled by the outreach of so many wonderful colleagues and friends. I remain committed to Chesapeake's mission and sincerely appreciate your continued interest, support and investment in the company as well. Thank you all. With that, we'll take your questions. Operator? Operator: [Operator Instructions] Our first question today comes from Tate Sullivan with Maxim Group. Tate Sullivan: Congratulations, Beth, on all your achievements over the years at CPK and pleasure working with you. And moving to some of the comments from the call. Jeff, did you mention a new LNG storage exploration project in Florida in the Cape or is that -- have you mentioned that before? And is it for LNG delivery and not regasification of that natural gas? Jeffrey Householder: Yes. We've been looking, Tate, at the opportunity, certainly subsequent to our acquisition of Florida City Gas and the inclusion of that service territory around Cape Canaveral and the Port of Canaveral. Lots of cruise ships coming and going. They're already fueling with liquefied natural gas, many of them. Most of that gas is being barged in from Jacksonville. And there are certainly -- there's a limit to the capacity that the LNG facility in Jacksonville can provide and folks keep launching rockets from the Spaceport there, utilizing LNG and they'd like to expand that. And so we've had the possibility of working potentially with someone else to develop an LNG facility at the Cape that would provide service to both of those industries, and we continue to do that. We have been looking at property up and down the intercoastal and even some inland sites, thought we had a -- probably the best location is a facility that's on the canal that runs down to the Port of Canaveral, pursued that for some period of time. The port has other designs on that property, which is certainly fine. That would have been the easiest, simplest, cheapest facility location, but there are many others that we're looking at, and we're pretty confident that we'll find something and develop that project. Tate Sullivan: Just one follow-up on that. Is Marlin currently delivering LNG in Florida or is that not the case? Jeffrey Householder: No, certainly not any quantity. We have some capability to move LNG with Marlin tankers but we have -- serving either the port or the Spaceport. Those are coming, like I said, principally on the cruise ship side, down the intercoastal being barged in from Jacksonville and then truck deliveries from a variety of places into the Spaceport. Tate Sullivan: And one more, if I may. The customer growth rate, still an impressive growth rate, but the annual growth compared to the fourth quarter was down a little bit. Is that -- I mean, should I read into that in terms of where the range may fall in the EPS guide -- EPS for 2028 or was that just a quarter of weakness? Jeffrey Householder: No. I think that's probably as much weather as it is anything else, especially in Delmarva. And we see those kinds of fluctuations seasonally in Florida. So we have a lot of homebuilding activity on the books and certainly a lot of builder and developer agreements that we've executed for many thousands of residences, both on the Peninsula of Florida and the Peninsula of Delmarva. So we're not signaling anything other than just the usual sort of seasonal fluctuations in building activity. Tate Sullivan: Congratulations Beth. Beth Cooper: I appreciate it. It's been great working with you. Operator: Our next question comes from J.C. Vidales with Ladenburg. Juan Carlos Vidales: Beth, congratulations. It's been great to work with you. Beth Cooper: Thank you, JC. It's been great with you as well. Juan Carlos Vidales: So just a couple of questions. So I think this is the first time we kind of see some equity guidance for the year. In terms of the total CapEx plan that you all have, are you all able to give us some color in terms of your equity assumptions for that plan? Beth Cooper: So I mean, in terms of the total capital budget of $450 million to $500 million for the year, you'll recall that we have a substantial portion of our earnings that are getting reinvested because of our dividend payout policy. And so above and beyond that right now, just given the level of CapEx range that's out there, we've indicated that we expect to issue about $60 million plus. It could be a little bit more than that. But generally, that's a good area right now to assume. And it's a small amount that we'll be able to manage through our ATM and our traditional waiver program. Juan Carlos Vidales: Okay. And then just a follow-up. In terms of a go forward for -- I think you gave guidance to '28 in CapEx. Is that a good assumption to use in terms of sizing of equity needs for the following years? Beth Cooper: Well, as we've indicated, we're going to be readdressing the entire guidance range in February of 2027, given our progress and where we come -- where we've actually been from an actual standpoint through 2025 and our guidance right now for 2026. If you were to look at what the run rate is in the base CapEx guidance range that is out there, it would be slightly less than this amount because the CapEx -- the average CapEx that's assumed on an annual basis is lower than the $450 million to $500 million. Juan Carlos Vidales: Okay, great. And then just one last question for me. Should we expect or do you all expect to potentially issue '26 EPS guidance following the decision on your interim rates here in Florida? I know maybe the depreciation ruling kind of potentially made you all not issue guidance for this year, but should we expect to change once you get an order on interim rates? Beth Cooper: What we have typically done, we've given annual guidance only really one time in our history to-date. We've been a long-term guidance company putting out long-term CAGRs because as you have seen, as you've looked at our past, we have some fairly large transmission projects that don't necessarily make our earnings per share CAGRs a straight line as you look at it from year-to-year, but over the long-term, have generated that 8% plus from an EPS growth standpoint. What you will see us put out this year would be additional margin information if there were to be a final rate case settlement this year. And we've already provided some indication about our expectations with information that we know, but it's certainly subject to being fine-tuned on the interim rate side. So we build a lot of our earnings estimates in through the margin table, just given, again, those large projects, those large initiatives that we have underway. Juan Carlos Vidales: That's it from me. Beth, once again, congrats and looking forward catching up at AGA. Operator: Our next question comes from Alex Kania with BTIG. Alexis Kania: Again, congrats, Beth, and good luck to Jeff and Jeff in the aftermath of that departing. So just maybe 2 questions just on some projects. First might just be on thinking about the example of the kind of the small projects in Ohio with respect to kind of the large load data center. Do you kind of see any other opportunities like that evolving across the system? Jeffrey Householder: I mean we hope to see that. Certainly, we're actively pursuing those opportunities in the areas that we currently serve. Ohio is certainly a place of interest to us. We have, as you know, facilities there and the [ AEE ] agreement that we've announced here recently. And it's an area that seems to be of great interest from a data center perspective. And so as you might imagine, we are actively interested in doing what we do to extend gas service to those data centers. So I have nothing to report today, but we have great interest in that service area. And there are other things going on in other places. I mean it's interesting to see some of the potential activity in Florida, and we've certainly had some interest in data center locations on the Delmarva Peninsula. So we'll see where all that goes. We're as interested in that as everybody else in the country is at this point. So we're, I think, positioned well in the service areas that we're currently in. Alexis Kania: Okay, great. That's helpful. And then just on the South Florida capacity expansion, are there any -- I'm thinking maybe kind of further downstream in terms of what events or catalysts you might be willing to keep in mind to see -- to assess kind of the potential progress of that project? And maybe just to confirm to the extent that there -- do you see an opportunity, would that be kind of be treated as an intrastate project rather than having to go through a FERC process? Jeffrey Householder: Yes, I'll take that in reverse order. I do think that for us would be of interest as an intrastate pipeline. We have invested significantly in intrastate pipes in Florida. One of the things that was interesting to us about Florida City Gas and that acquisition was the full knowledge that there were capacity constraints in South Florida. And certainly, Florida City Gas is not the only entity that serves in South Florida that's experiencing that. So I think the growth in population, the growth in customers and the growth in demand requires that at some point, we find a way to increase capacity capabilities in the South Florida area. Again, we're in a very nice position, I think, to be able to do that. We serve facilities in the West Palm Beach area, close to interstate transmission interconnections, and we believe that there are possibilities to again expand the capacity all the way down to South Florida. So I look forward to someday, hopefully, being able to talk about a project that gets more gas down to that growing load center. Operator: At this time, there are no further questions in queue. I will now turn the meeting back to Jeff Householder. Jeffrey Householder: Thank you. We appreciate your continued interest in Chesapeake Utilities. So thank you for joining the call today. We look forward to seeing many of you here in a week or 2 in Scottsdale at the AGA Financial Forum. I'll end just by continuing to congratulate Beth on her very long years of service with Chesapeake Utilities. It's been a remarkable run. She's been a great colleague and a great friend. And I'll leave you with one last statistic. She served as CFO in our company for 18 years. In every one of those years, we had record earnings. I'll see you all in Arizona. Goodbye. Operator: Thank you. This concludes Chesapeake Utilities Corporation's first quarter 2026 earnings conference call. 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See the 10 stocks » *Stock Advisor returns as of May 8, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. CPK Q1 2026 Earnings Transcript was originally published by The Motley Fool