WTRG

A month has gone by since the last earnings report for Essential Utilities (WTRG). Shares have added about 5% in that time frame, outperforming the S&P 500. Will the recent positive trend continue leading up to its next earnings release, or is Essential Utilities due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. WTRG Q2 Earnings Meet Estimates, Revenues Beat on Water GrowthEssential Utilities Inc. reported second-quarter 2026 adjusted earnings of 38 cents per share, in line with the Zacks Consensus Estimate and reflecting no surprise. GAAP earnings were 37 cents per share, down 2.6% from 38 cents a year ago, as merger-related costs weighed on results. Quarterly revenues of $530.9 million rose 3.1% year over year and beat the consensus estimate of $502 million by 5.76%. Regulated water segment revenues totaled $357.5 million, up from $332.3 million in the second quarter of 2025. Regulatory recoveries and increased volume were the largest contributors to the growth.Regulated natural gas revenues declined to $169.3 million from $177.3 million a year ago. Higher rates and surcharges provided support, but lower purchased gas costs and reduced volumes due to warmer weather pressured the segment. Operations and maintenance expenses increased 3.5% year over year to $153.6 million in the second quarter of 2026 from $148.5 million a year earlier. The rise was mainly due to higher employee-related costs, including annual merit increases and increased medical claims, along with higher water and wastewater production expenses. Operating income reached $193.3 million, up 4.3% from $185.3 million a year earlier. Net income, however, declined 1.9% to $105.7 million from $107.8 million, reflecting higher interest expense and other cost pressures. Essential invested $662.2 million in regulated water and natural gas infrastructure during the first six months of 2026. The company remains on track to invest $1.7 billion in infrastructure for the full year.Rate awards and infrastructure surcharges secured so far in 2026 are expected to increase annual water revenues by $43.9 million and natural gas revenues by $12.7 million. Pending water and wastewater cases seek $79.7 million in incremental annual revenues, while a Pennsylvania natural gas case requests a $163.2 million increase.WTRG’s Balance Sheet Supports Investment PlansAs of June 30, 2026, net property, plant and equipment totaled $14.75 billion, up from $14.26 billion at the end of 2025. Long-term debt, excluding the current portion, increased to $8.42 billion from $8.11 billion.The company had $960 million available under its credit lines, while the weighted average cost of fixed-rate long-term debt was 4.16%. Essential also raised its quarterly dividend 5.25% to 36.06 cents per share, payable on Sept. 1, 2026, to shareholders of record as of Aug. 11. The company reaffirmed its expectation for adjusted earnings growth of 5% to 7% annually from adjusted 2024 earnings of $1.97 per share through 2027. Its guidance continues to incorporate signed municipal water and wastewater acquisitions, excluding the pending DELCORA transaction. The Zacks Consensus Estimate for earnings is currently pegged at $2.21 per share.Essential also continues to expect its merger with American Water to close in the first quarter of 2027. The transaction has received regulatory approvals in Kentucky, Ohio and Virginia, while shareholders of both companies approved the merger-related proposals in February 2026. Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions. At this time, Essential Utilities has a subpar Growth Score of D, a score with the same score on the momentum front. Following the exact same course, the stock has a grade of D on the value side, putting it in the bottom 40% for value investors. Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in. Essential Utilities has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months. Essential Utilities belongs to the Zacks Utility - Water Supply industry. Another stock from the same industry, California Water Service Group (CWT), has gained 0.8% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026. California Water Service Group reported revenues of $308.6 million in the last reported quarter, representing a year-over-year change of +16.5%. EPS of $0.93 for the same period compares with $0.71 a year ago. California Water Service Group is expected to post earnings of $1.22 per share for the current quarter, representing a year-over-year change of +18.5%. Over the last 30 days, the Zacks Consensus Estimate has changed -8.7%. California Water Service Group has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Essential Utilities Inc. (WTRG) : Free Stock Analysis Report California Water Service Group (CWT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Essential Utilities WTRG is benefiting from customer-base growth driven by organic expansion and water and wastewater acquisitions. This expansion broadens its service footprint, increases demand for essential utility services and supports infrastructure expansion across its regulated operations.The company added more than 138,000 customers or equivalent dwelling units since 2015, while pending acquisitions are expected to serve more than 200,000 additional customers. It also completed the acquisition of Integra Water Texas’ wastewater system, adding approximately 1,100 customers, while its active municipal acquisition pipeline represents about 400,000 potential customers.The company’s signed purchase agreements cover more than 200,000 customers for about $282 million.  WTRG’s customer expansion is also supported by infrastructure spending, and it plans to invest about $1.7 billion in 2026 while targeting 5-7% annual EPS growth through 2027.Overall, acquisitions and infrastructure investments are expected to support WTRG’s long-term expansion and customer growth. Growing customer numbers can benefit water utilities by increasing demand for essential services and creating opportunities to expand infrastructure. A broader customer base can also help utilities generate stable revenues while enabling continued investments in water systems, treatment facilities and network upgrades.American Water Works AWK added about 52,700 customer connections through acquisitions in the first half of 2026, supporting expansion across its regulated water footprint. California Water Service Group CWT serves about 2 million people through 497,600 California connections, while acquisitions and infrastructure investments provide additional opportunities for customer and rate-base growth. The Zacks Consensus Estimate for 2026 and 2027 EPS indicates a year-over-year increase of 0.45% and 9.73%, respectively. Image Source: Zacks Investment Research WTRG is trading at a premium to the industry, with a forward 12-month price-to-earnings ratio of 17.45 versus the industry average of 17.34X. Image Source: Zacks Investment Research In the past month, the company’s shares have risen 5.9% compared with the industry’s 0.7% growth. Image Source: Zacks Investment Research WTRG currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Essential Utilities Inc. (WTRG) : Free Stock Analysis Report American Water Works Company, Inc. (AWK) : Free Stock Analysis Report California Water Service Group (CWT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Wednesday, Aug. 5, 2026 at 11 a.m. ET Vice President Investor Relations and treasurer - Brian Dingerdissen Chairman and Chief Executive Officer - Christopher H. Franklin Chief Financial Officer - Daniel J. Schuller Operator: Hello, everyone. Thank you for joining us and welcome to Essential's 2.52 million. To raise your hand. To withdraw your question, press 1 again. I will now hand the conference over to Brian Dingerdissen, Vice President Investor Relations and treasurer. Brian, please go ahead. Brian Dingerdissen: Good morning, everyone, and thank you for joining us for our second quarter 26 earnings call. If you did not receive a copy of the press release, it can be found on our Investor Relations website. The slides can also be found on our website along with a webcast of the event. As a reminder, some of the matters discussed today may include forward looking statements that involve risks, uncertainties, and other factors that may cause the actual results to be materially different from any future results expressed or implied by such forward looking statements Please refer to our most recent 10 Q 10 ks and other SEC filings for a description of such risks and uncertainties. References may be made to certain non GAAP financial measures. Reconciliation of any non GAAP to GAAP financial measures is posted on our website in the Investor Relations section. We will begin with Christopher H. Franklin, our Chairman and CEO, who will provide an update on the company then Daniel J. Schuller, our Chief Financial Officer will provide an overview of the financial results. With that, I will turn it over to Christopher H. Franklin. Christopher H. Franklin: Thanks, Brian, and good morning, everyone. Let's begin on slide 5, and we will talk about some corporate updates. First on the merger, As you have probably seen from our press releases, now received 3 regulatory approvals for the merger from Kentucky Ohio, and Virginia. In other states, the merger cases have been proceeding as planned, including in Texas, where we have reached a settlement in principle. In New Jersey, public input hearings are scheduled for August. In North Carolina, the process, which does not have a statutory timeline, continues to proceed as planned and testimony was filed at the end of last week. The merger case in Illinois is now with the ALJ and that process does have a statutory timeline and it finishes by November of this year. Finally, in Pennsylvania, negotiations continue with the parties even though we are in the evidentiary hearings this week. We continue to expect the merger to be finalized during the first quarter of 27. Now significant planning work is ongoing as we consider the many factors involved in integrating the 2 companies. We are intent on hitting the ground running as a world class organization on the day after we close this transaction. Alright, now for the quarter, we reported GAAP earnings per share of $0.37 which includes about $0.01 of merger related costs and puts us at non GAAP earnings per share of $0.38 When we look at 2026 overall, we are confident that we will meet our 5% to 7% earnings growth guidance anchored to the non GAAP 2024 earnings per share of $1.97 and Daniel will go into the details in much more detail in a moment. This has been a very busy construction year. We continue to invest capital in the improvement of our regulated water and natural gas systems, which of course results in enhanced service to our customers. Year to date, we have invested $662 million and we are on track to invest a record $1.7 billion in needed infrastructure improvements and up upgrades. Turning now to the regulatory environment. Let's start in Pennsylvania. As you are aware, on April 29th, governor Shapiro issued a letter to utilities operating within the Commonwealth. The letter instructed companies to prioritize the most cost effective forms of capital and to explicitly demonstrate the necessity of proposed investments when seeking rate adjustments. Now following his communication, the special counsel for the governor's office on energy affordability called into 1 of our public input hearings for the pending Peoples rate case. The special counsel is not an intervener in the Peoples rate case. And acknowledged that our rate case was filed prior to the issuance of the governor's letter. Now our company has always been a national leader in appropriately replacing aging underground infrastructure. And we are fully committed to sustaining strong levels of capital investment. These investments are critical to ensuring compliance with evolving federal and state regulations enhancing system reliability, and upgrading safety for both our workforce and the communities we serve. And as always, we carefully balance these critical infrastructure needs with consumer affordability to ensure the delivery of safe resilient, and reliable service. We continue to engage constructively with the Pennsylvania Public Utility Commission, the governor's office, and the other stakeholders regarding both our current gas rate case and our upcoming Pennsylvania water rate case. Which we anticipate filing around the end of the year. As usual, remain dedicated to absolute transparency in our rate filings and will continue to operate strictly within Pennsylvania's established statutory framework. Finally, reinforcing our long standing commitment to shareholder value, We are proud to continue our 80-year track record of consecutive quarterly cash dividends. Last week, the Essential Board of Directors approved a 5.25% increase in our quarterly cash dividend. Consistent with last year's increase, and this dividend is payable on 09/01/2026, to shareholders of record on 08/11/2026. Now if you turn to slide 6, this is a snapshot of the regulatory approvals process across our states. The slide provides dockets and next steps so you can follow the approval process. Now, note on the integration work. That is underway with the merger. it is really been gratifying to watch the teams at Essential and American work together to shape the consolidated company. I knew that our similar mission based employees would work diligently to make certain the combination went well But I got to tell you, the collaboration and cooperation among the teams has exceeded my expectations. And I am more confident than ever that this combination will be a top performing utility and a must own investment in the market. And with that, Daniel, let me turn it to you for a deeper dive into the quarter. Daniel J. Schuller: Thanks, Christopher, and good morning, everyone. Today, my remarks will focus on our financial performance and the primary drivers of our results. Let's turn to slide 8 to review the year over year EPS bridge. Beginning with our 25 Q2 earnings of $0.38 per share. In terms of positive drivers, earnings for this quarter benefited from a $0.06 increase in regulatory recoveries in surcharges $0.02 from higher water volumes, and $0.01 from customer growth in the water segment, reflecting both our acquisition strategy and organic expansion. These gains were partially offset by $0.02 in higher operating expenses, a $0.02 impact from lower gas volumes this quarter and $0.06 from other items, which includes $0.03 from increased depreciation. and $0.03 from higher interest and lower AFUDC. This brings us to GAAP earnings per share of $0.37 for the quarter. You will see the details of our O&M expenses in our queue in the MD and A, but let me give you some color here. O&M increased by approximately $5.1 million or 3.5%. This variance was primarily driven by a $5.9 million increase in employee related costs including annual merit increases and higher medical claims, alongside a $2.3 million increase in production costs for our water and wastewater operations and about $800 thousand to account for serving newly acquired customers. These increases then were partially offset by a $4.9 million reduction in insurance expenses largely due to an insurance recovery, a $2.4 million decrease in gas segment bad debt expense, and a $1.5 million decrease in customer assistance surcharge costs which has an equivalent revenue offset. We also increased our sales and use tax accrual and incurred $1.2 million in merger related expenses. Excluding these nonrecurring merger costs, O&M expenses increased by 2.6%, which aligns with our historical norms. Also, we adjust our GAAP earnings per share of $0.37 to exclude the nonrecurring merger related costs, our adjusted non GAAP earnings per share were $0.38 for the quarter. A full reconciliation is available on our website and in the appendix of this presentation. As Chris noted, our long term outlook remains unchanged. We remain fully committed to our long term target of 5% to 7% normalized earnings per share growth using our non GAAP 2024 results of $1.97 per share as our baseline. Turning to slide 9. Let me provide an update on our regulatory activity. Thus far in 2026, we have finalized rate cases or surcharges representing $56.6 million in annualized revenue. Approximately 78% of this total is derived from our water and wastewater operations, with the remainder coming from our gas business. Looking ahead, our regulatory pipeline remains on track. Our water and wastewater segment currently has 5 cases and a surcharge proceeding pending. Representing approximately $79.7 million in requested annualized increases. As Chris mentioned, we expect to file the next Aqua Pennsylvania rate case around year end. Our natural gas subsidiary has a base rate case pending here in Pennsylvania for $163.2 million. This filing is essential to supporting our long term infrastructure improvement plan which enhances system safety and reliability while continuing to drive emissions reduction. As always, we remain disciplined in balancing our strategic priorities. As Chris emphasized, we manage these filings carefully to ensure we continue delivering safe, reliable service and earn a fair return on our invested capital while remaining highly sensitive to customer affordability. With that, I will turn the call back over to Christopher. Christopher H. Franklin: Christopher? Alright. Thanks, Daniel. Let's move to slide 11, and we will recap our growth through acquisition strategy. We show here a selection of our business development opportunities. We recently completed our acquisition of Integra Water LLC, for purchase price of $4.9 million. And we welcome the 1.1 thousand customers to our Texas customer base. We signed purchase agreements for several small systems in Pennsylvania, Texas, North Carolina, Virginia, and New Jersey some of which we expect to close in 2026. Now including these signed purchase agreements, in total,, we are adding about 200 thousand customers with a purchase price of approximately $282 million Now this does include our DELCORA transaction. But I will remind you that progress on our DELCORA transaction continues to be stalled by a stay in place by a federal bankruptcy court judge. And that was related to the bankruptcy of the city of Chester. Now we do not anticipate any negative impact to our pursuit of this transaction related to our merger with American Water. The fully enforceable agreement of sale with DELCORA is assumable by American Water. Pipeline of potential water and wastewater municipal acquisitions for the company stands at approximately 400 thousand customers. So, a nice strong pipeline and we remain optimistic about the consolidation of water and wastewater systems in the United States and look forward to leveraging the combined resources of essential and American Water to accelerate our business development work. Now I will wrap up our prepared remarks on Slide 12. As we have discussed before, we are reaffirming our 5% to 7% multiyear earnings per share guidance through 2027. Upon announcement, of the transaction with American Water, we informed investors that we will continue growing EPS by 5% to 7% annual using our adjusted 2024 EPS of $1.97 as the base. Just as a reminder, this outlook includes the acquisitions we expect to close this year but does not include DELCORA. Now beyond the numbers, our priorities have not changed. We are focused on keeping the balance sheet strong, improving our cash position and growing the dividend while keeping our payout ratio between 60-65%. As part of our strong focus on customers, we are investing $1.7 billion in regulated infrastructure just this year. With that, I will wrap things up and hand it back to the operator so we can take your questions. Operator: We will now begin the question and answer session. Please limit yourself to 1 question and 1 follow-up. If you would like to ask a question, please press 1. To raise your hand. To withdraw your question, press 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. And if you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Julien Patrick Dumoulin-Smith from Jefferies. Julien, your line is open. Please go ahead. Andrew: Hi. Good morning. This is Andrew on for Julien, and thank you for the time. I guess maybe 2 questions on my front. Just 1, I think you have talked about the timing for your future Aqua case filing. Can you kind of maybe give a bit more details as to kinda how your planning the case? Kinda what are what are you guys doing differently in light of kind of the focus that we are seeing from the governor's office on ROE as well as, the capital structure front. Thank you. Christopher H. Franklin: Sure. Good morning, Andrew. Thanks for the question. So, yeah, as you are aware, in Pennsylvania, we have got a lot of activity going on. Right? We have got the merger case which is the largest case. We have got, in that combination consideration, the American Water case, which was just completed, and we have the Peoples natural gas case going on as well. Which is coming toward conclusion there as well. And we made a strategic decision with everything going on that we would be thoughtful and deliberate here and we would delay the filing of our Aqua Pennsylvania case. In terms of how we think about filing that case, listen. Andrew: The case is largely a capital case. So there is not there is no complication to the case. Christopher H. Franklin: And so we follow all the rules. We are a very compliant company as we always are. We would expect that we would file that case very similar to how we would in the past, but very respectful to the governor's position. Listen. there is a lot of positions in every rate case. Right? there is always interveners of all sorts. So we will be very respectful to the governor's position. Frankly, we, we think that, the company, shareholders, and customers deserve a return of and on the capital, In a fair return, we will let the commission determine what fairness actually is. Daniel J. Schuller: And you know, we think that where the commissioners adjudicated Americans' case, they anchored that around the disc ROE at, you know, somewhere around 9.07%. You know, is a pretty good start. Obviously, there is a debate always around capital structure and everything else. Christopher H. Franklin: So we will file a case as we normally would have. With, all due respect to all the parties. And we will we will adjudicate it as such. Thank you. that is very clear. And maybe as a as a follow-up, you know, we appreciate that. Some of the water specific expenses, you know, PFAS are not actually recoverable under the disc. I guess maybe just more of a housekeeping question. Can you kind of speak to how much of your CapEx qualifies for the DSIC versus kind of, like, you know, what is being recovered under the GRC? Thank you. Yeah. Let me have Daniel answer that combination. What I will say, though, we will continue to press for an expansion of the disc to include some of these items. You know, we will -- we believe that at this point, that the disc mechanism should be expanded so that we get more capital items included, which has the effect of lengthening the period between cases. But in terms of what is included today in percentages, Daniel, let me turn to you. Daniel J. Schuller: Yeah. Andrew, so today for 2026, it is about 55% of the Pennsylvania capital. Is DISC eligible. In the past, you know, in years where we had more pipe work and less plant work, that number would have been higher, but that is where we are today. Andrew: that is very helpful. Thank you guys again. Christopher H. Franklin: Thanks, Andrew. Operator: Your next question comes from the line of Davis B Sunderland with Baird. Your line is open. Davis B Sunderland: Your line is open. Go ahead. Davis Sunderland: Good morning, gentlemen. Thank you very much for the update, and thank you for taking our questions. Christopher, I appreciate all the details on the merger related activities and sounds like everything is going very smoothly, especially on the integration front. Maybe just at a high level, I wonder if you could just talk through some of the items that could potentially be called out as having the ability to move the merger close date either earlier or later or anything that has not gone according to plan? Just to, I guess, open things up. Christopher H. Franklin: Yeah. I would say, is that things have gone largely according to plan. Listen, there is always bumps and, you know, it is a it is a negotiation process in many ways. With the with various parties in various states. But the states that have statutory timelines seem to be on track The last 1 with a statutory timeline would be Illinois, Record is closed there. it is proceeding according to plan. In Pennsylvania, the conversations have been constructive. Thoughtful, and I am pleased with that. You know, we do not necessarily agree on all the issues, but that is that is okay too. And then I think that we now have a schedule, as we said, in New Jersey. Things are proceeding, you know, with good discussions in North Carolina. So I feel good about things. You know, that could affect time line, I will I will take Pennsylvania for starters. The administrative law judge in Pennsylvania is allowed 90 days to make their decision. And come out with their recommendation to the commissioners. So should that take 30, 55, 60 days, obviously, that could that could move the timeline up a bit. But as it looks today, you would think if you just run the timelines out and, again, there could be bumps that come in the road, but that we are not aware of. But as it looks today, it looks to be comfortably in that first quarter range for closing. With what we know today. That is super helpful. Thank you for the details there. Davis Sunderland: Maybe 1 for you, Daniel. Just a question about shaping of the year, any 1-timers to consider, and especially anything on tax rate, just as more modeling than anything, but just thinking about the balance of the year and the earnings trajectory? Daniel J. Schuller: Sure, David. So the in terms of tax rate, you know, you have seen low single digit effective tax rates thus far in the year. Both for this quarter and year to date. We would expect to see that for the full year. So low single digits, less than 5% to around that area. And, you know, it was in the in the S-4 that there is a 1-timer this year. You know, that remains on track. We would expect to get that later this year. That would be beneficial to our earnings as we think about landing inside that target zone. With that guidance that is based on 2024 adjusted earnings. Also super helpful. Thank you. Davis Sunderland: And maybe if I could just be greedy and sneak in 1 more housekeeping, I guess, for both of you, but anything to call out as far as inflationary costs from the war abroad, raising fuel costs or other inflationary inputs tariff refunds as a benefit or just any other unusual items that you guys have seen year to date or expect in the balance of the year? And thank you again very much. Daniel J. Schuller: Yeah. Absolutely, David. I think the 1 you mentioned first there really fuel price increases. You know, we have seen that across the platform. And, of course, know, we have somewhere on the order of 3 thousand total vehicles and pieces of equipment. So what we have seen in the Middle East that is driving higher fuel costs this year that so far, you have seen that incorporated into our numbers, and you will see that continue to be in our numbers until things really calm down there in the Middle East. Christopher H. Franklin: Yeah. But nothing real, not at least. Thanks, guys. Daniel J. Schuller: Yeah. Yeah. that is right, Christopher. Really nothing other than fuel prices that we are seeing. Christopher H. Franklin: Perfect. Thanks, guys. Daniel J. Schuller: You bet. Operator: If you would like to ask a question, please press 1 to raise your hand. Alright. There are no further questions at this time. I will now turn the call back to Christopher H. Franklin for closing remarks. Christopher H. Franklin: Alright. Thanks, everyone, for joining us. As always, Brian, Daniel, and myself are all open for follow-up questions. And in the meantime, hope you enjoy the rest of your summer. Thanks for joining us. Operator: This concludes today's call. Thank you for attending. You may now disconnect. 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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. Essential Utilities (WTRG) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Essential Utilities Inc.? Here are five stocks we like better. Second-quarter earnings were broadly stable: GAAP EPS was $0.37 versus $0.38 a year earlier, while adjusted EPS was $0.38. Higher regulatory recoveries, water volumes and customer growth were offset by lower gas volumes, increased operating expenses, depreciation and interest costs. The American Water merger remains on track for first-quarter 2027 closing. Essential has secured approvals in Kentucky, Ohio and Virginia, reached a settlement in principle in Texas, and continues regulatory proceedings in other states. Essential is expanding investment and customer growth: It invested $662 million in infrastructure during the first half of 2026 and expects record full-year spending of $1.7 billion. The board also approved a 5.25% dividend increase, while planned acquisitions could add roughly 200,000 customers for about $282 million. Water Infrastructure: Why This Boring Sector Could Get Exciting Essential Utilities (NYSE:WTRG) reported second-quarter 2026 GAAP earnings of $0.37 per share, compared with $0.38 per share in the prior-year quarter, as higher regulatory recoveries and water volumes were offset by lower gas volumes, increased operating expenses, depreciation and interest costs. Excluding approximately $0.01 per share of merger-related expenses, the company reported adjusted non-GAAP earnings of $0.38 per share. Chairman and CEO Chris Franklin said Essential remains confident it can achieve its target of 5% to 7% annual earnings-per-share growth, using 2024 adjusted earnings of $1.97 per share as the baseline. → No Hangover: Revisiting Microsoft One Week After Earnings Overlooked Analyst-Approved Dividend Plays You Can Count On Chief Financial Officer Dan Schuller said earnings benefited from a $0.06-per-share increase in regulatory recoveries and surcharges, a $0.02 increase from higher water volumes, and a $0.01 benefit from water customer growth. The customer growth reflected both acquisitions and organic expansion, he said. Those gains were partly offset by $0.02 per share of higher operating expenses, a $0.02 impact from lower gas volumes, and $0.06 of other costs. The latter category included $0.03 from increased depreciation and $0.03 from higher interest expense and lower allowance for funds used during construction, or AFUDC. → MarketBeat Week in Review – 08/03 - 08/07 Top 3 Stocks to Outperform the S&P 500 in a Downturn Operating and maintenance expenses rose about $5.1 million, or 3.5%, from a year earlier. Schuller attributed the increase primarily to higher employee-related costs, including merit increases and medical claims, along with greater water and wastewater production costs and expenses associated with newly acquired customers. The increase was partly offset by lower insurance expense due largely to an insurance recovery, reduced gas-segment bad debt expense, and lower customer-assistance surcharge costs. Excluding merger-related costs, operating and maintenance expenses increased 2.6%, which Schuller said was in line with the company’s historical norms. → Why the Landlord of the AI Boom Could Outlast the Chipmakers Franklin said Essential has received regulatory approvals for its planned merger with American Water in Kentucky, Ohio and Virginia. The company continues to expect the transaction to close during the first quarter of 2027. Proceedings are continuing in the remaining jurisdictions. Essential has reached a settlement in principle in Texas, while public input hearings in New Jersey are scheduled for August. Testimony was filed in North Carolina at the end of the prior week, and the Illinois matter is before an administrative law judge with a statutory process scheduled to conclude by November. In Pennsylvania, the companies remain in negotiations with parties while evidentiary hearings are underway. Franklin said the administrative law judge’s timing in issuing a recommendation could affect the closing schedule, but he characterized the current first-quarter 2027 expectation as “comfortable” based on known timelines. “Things have gone largely according to plan,” Franklin said, while noting that regulatory approvals involve negotiations with different stakeholders across multiple states. Essential is also conducting integration planning with American Water. Franklin said employee collaboration between the companies has exceeded his expectations and that the combined organization is intended to begin operating as a “world-class organization” immediately following closing. Essential invested $662 million in regulated water and natural gas infrastructure during the first half of 2026 and remains on track to spend a record $1.7 billion for the full year. Franklin said the investments are intended to improve service, reliability, safety and regulatory compliance. The company finalized rate cases or surcharges representing $56.6 million in annualized revenue during 2026 through the second quarter, with about 78% coming from water and wastewater operations. Its water and wastewater segment has five rate cases and one surcharge proceeding pending, representing roughly $79.7 million in requested annualized increases. Essential’s Pennsylvania natural gas subsidiary has a base rate case pending that seeks $163.2 million in additional annual revenue. The company plans to file its next Aqua Pennsylvania water rate case around year-end. Franklin said Essential delayed the Aqua Pennsylvania filing amid several ongoing regulatory matters, including the merger proceeding and the Peoples Natural Gas rate case. He described the anticipated water filing as largely driven by capital investment and said the company expects to follow its usual process while considering positions raised by Pennsylvania’s Governor’s Office on energy affordability. Schuller said approximately 55% of Essential’s Pennsylvania capital spending for 2026 is eligible for recovery through the distribution system improvement charge, or DSIC. Franklin said the company will continue advocating to expand the DSIC mechanism to cover additional capital items. Essential completed the acquisition of Integra Water LLC for $4.9 million, adding approximately 1,100 customers in Texas. The company also has signed agreements to acquire small systems in Pennsylvania, Texas, North Carolina, Virginia and New Jersey. Including those signed agreements, Essential expects to add about 200,000 customers for a combined purchase price of approximately $282 million. That figure includes the DELCORA transaction, whose progress remains stalled by a federal bankruptcy court stay related to the City of Chester’s bankruptcy. Franklin said the DELCORA agreement remains fully enforceable and assumable by American Water, and Essential does not expect the proposed merger to negatively affect its pursuit of the transaction. The company’s potential municipal water and wastewater acquisition pipeline stands at approximately 400,000 customers. Separately, Essential’s board approved a 5.25% increase in its quarterly cash dividend. The dividend is payable Sept. 1, 2026, to shareholders of record as of Aug. 11, 2026. Looking ahead, Schuller said Essential expects its effective tax rate to remain in the low single digits for the full year, generally below 5%. He also said a previously disclosed one-time item remains expected later in 2026 and should benefit earnings. The company has experienced higher fuel costs across its fleet and equipment base amid developments in the Middle East, which Schuller said have been incorporated into current results. Essential Utilities, Inc, formerly known as Aqua America, is a publicly traded water and natural gas utility holding company. Through its regulated water and wastewater subsidiaries, the company provides essential water services to residential, commercial and industrial customers. In addition, Essential Utilities delivers natural gas distribution services in Pennsylvania through its Peoples Gas subsidiary, offering integrated utility solutions under a unified corporate framework. The company traces its roots to the Philadelphia Suburban Water Company, founded in 1886 to serve growing communities outside Philadelphia. 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 "Essential Utilities Q2 Earnings Call Highlights" was originally published by MarketBeat. 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American States Water Company AWR reported second-quarter 2026 earnings of $1.09 per share, up 25.3% year over year and beating the Zacks Consensus Estimate of 93 cents by 17.2%. Higher earnings at the water utility, driven largely by CPUC-approved rate increases, supported the gain. Operating revenues rose 11.2% to $181.29 million from $163.07 million. Water consumption increased about 4%, while contracted services revenues advanced 20.3%, adding to the quarter’s growth.Water segment revenues increased 9.5% year over year to $131.05 million. The increase mainly reflected second-year customer rate increases effective Jan. 1, 2026, additional revenues tied to approved capital projects and higher water consumption. Lower billed surcharges partly offset these gains.Contracted Services revenues rose 20.3% to $36.61 million, while Electric segment revenues increased 5.4% to $13.63 million. The Electric revenues were $13.6 million, up 5.4% year over year, and the surge reflects authorized 2026 rate increases and additional recovery on completed capital projects, partly offset by lower billed surcharges. American States Water Company price-consensus-eps-surprise-chart | American States Water Company Quote Operating expenses increased 4.6% to $117.32 million. ASUS construction expense climbed 29.9% to $16.75 million, while depreciation and amortization rose 9.1% to $12.75 million. Administrative and general expenses declined 2.8% to $24.52 million.Operating income increased 25.5% to $63.97 million. Interest expense was $12.17 million, up 0.5%, while other income, net, increased 41.8% to $5.07 million. Net income rose 28.4% to $43.27 million. Cash provided by operating activities totaled $116.6 million in the first six months of 2026, compared with $109.6 million a year earlier. The improvement reflected new regulated utility rates, various surcharges, about $4 million of proceeds from PFAS contamination litigation and working-capital timing.The regulated utilities invested $91.7 million in company-funded capital work year to date. American States Water expects regulated utility capital expenditures of $185-$220 million in 2026. Cash and cash equivalents stood at $21.66 million at June 30, up from $18.82 million at year-end 2025. Golden State Water filed its 2028-2030 general rate case on July 1, seeking nearly $1 billion of capital budgets for the three-year cycle. It also requested reinstatement of the WRAM and MCBA regulatory mechanisms. A decision is scheduled for the fourth quarter of 2027, with new rates targeted for Jan. 1, 2028.Bear Valley Electric filed its 2027-2030 rate case in January. The application seeks about $133 million of capital budgets, plus roughly $17 million, along with allowance for funds used during construction, for projects to be recovered through advice letters. It also requests an 11.30% return on equity. The board approved an 8.2% increase in the third-quarter dividend to 54.55 cents per share from 50.40 cents. This increase marks the 72nd consecutive calendar year in which AWR has raised annual dividends to its shareholders.AWR also completed its at-the-market equity offering program in June after reaching the $200 million maximum aggregate offering capacity. The company said no further shares will be sold under that program and it has no plans to issue additional equity through at least the end of 2029 to support current operations. American States Water’s capital expenditures for 2026 are expected to be $185-$220 million.Contracted Services (“ASUS”) is projected to contribute 63-67 cents per share in 2026. American States Water currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. American Water Works Company Inc. AWK reported second-quarter 2026 adjusted earnings of $1.61 per share, which beat the Zacks Consensus Estimate of $1.59 by 1.3%. The bottom line increased 8.1% from $1.49 in the year-ago quarter.Revenues of $1.36 billion surpassed the Zacks Consensus Estimate of $1.28 billion by 6.2% and rose 6.2% year over year. The company added nearly 52,000 customer connections through acquisitions in the first half.California Water Service Group CWT reported second-quarter 2026 earnings of 93 cents per share, up 31% year over year. The figure beat the Zacks Consensus Estimate of 79 cents per share by 17.72%.Quarterly revenues rose 16.5% to $308.6 million and surpassed the Zacks Consensus Estimate of $277 million by 11.41%. Results benefited from regulatory catch-up revenues, rate changes and higher customer consumption, while infrastructure investment reached a record $147 million.Essential Utilities Inc. WTRG reported second-quarter 2026 adjusted earnings of 38 cents per share, in line with the Zacks Consensus Estimate and reflecting no surprise. Quarterly revenues of $530.9 million rose 3.1% year over year and beat the consensus estimate of $502 million by 5.76%. Regulatory recoveries and purchased gas costs supported the top line, while regulated water revenues advanced 7.6%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report American States Water Company (AWR) : Free Stock Analysis Report American Water Works Company, Inc. (AWK) : Free Stock Analysis Report California Water Service Group (CWT) : Free Stock Analysis Report Essential Utilities Inc. (WTRG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

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. Management is prioritizing a 'thoughtful and deliberate' delay of the Aqua Pennsylvania rate case filing to late 2026 to navigate a complex regulatory calendar involving concurrent merger and gas rate proceedings. The company is proactively addressing Governor Shapiro's directive for cost-effective capital by explicitly demonstrating the necessity of infrastructure investments in pending and future rate filings. Performance in Q2 was bolstered by $0.06 per share from regulatory recoveries and surcharges, alongside organic and acquisition-driven customer growth in the water segment. Operational expenses increased by 2.6% on an adjusted basis, driven primarily by employee-related costs and higher medical claims, which management characterized as consistent with historical norms. The merger integration with American Water is exceeding management expectations, with collaborative planning teams focused on ensuring a seamless 'Day 1' operational transition. Management reaffirmed its commitment to a 5% to 7% annual EPS growth target, anchored to the 2024 non-GAAP baseline of $1.97 per share. The merger with American Water remains on track for a Q1 2027 close, with key statutory timelines in Illinois concluding by November 2026 and public hearings scheduled in New Jersey for August. Essential expects to invest a record $1.7 billion in infrastructure improvements during 2026, focusing on system reliability, safety, and compliance with evolving federal regulations. The company plans to advocate for the expansion of the Distribution System Improvement Charge (DSIC) to include non-recoverable items like PFAS mitigation, which would extend the duration between base rate cases. Financial modeling for the remainder of 2026 assumes a low single-digit effective tax rate (below 5%) and includes a previously disclosed one-time beneficial item expected later in the year. Management intends to maintain a dividend payout ratio between 60% and 65% while continuing its 80-year track record of consecutive quarterly cash dividends. The DELCORA acquisition remains stalled due to a federal bankruptcy court stay related to the City of Chester, though the agreement remains fully enforceable and assumable by American Water. Geopolitical instability in the Middle East is driving higher fuel costs across the company's 3,000-vehicle fleet, a trend expected to persist until regional tensions subside. Regulatory risk in Pennsylvania is being managed through constructive engagement with the Governor's office following new instructions to utilities regarding capital cost-effectiveness. Non-recurring merger-related costs impacted Q2 GAAP earnings by approximately $0.01 per share. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management delayed the filing to be respectful of the Governor's position and the heavy regulatory docket, including the ongoing Peoples Natural Gas case. The company views the recent American Water adjudication, which anchored ROE around 9.7%, as a relevant benchmark for its upcoming filing. The case will be framed primarily as a capital recovery request, adhering to established statutory frameworks while demonstrating investment necessity. Approximately 55% of Pennsylvania capital expenditure is currently DSIC-eligible for 2026. The eligibility percentage has shifted lower recently due to a higher mix of plant-related work versus traditional pipe replacement. Management is actively pressing for legislative or regulatory expansion of DSIC to include a broader range of capital items. The Q1 2027 closing estimate remains firm, though a faster decision from the Pennsylvania Administrative Law Judge (who has a 90-day window) could potentially accelerate the timeline. Management noted that while they do not agree with all parties on all issues in Pennsylvania, negotiations remain 'constructive and thoughtful.' Statutory deadlines in Illinois and scheduled hearings in New Jersey provide a clear roadmap for the remaining approvals.

This article first appeared on GuruFocus. GAAP Earnings Per Share (EPS): $0.37 for Q2 2026, including approximately $0.01 of merger-related costs. Non-GAAP Earnings Per Share (EPS): $0.38 for Q2 2026, excluding non-recurring merger-related costs. Earnings Growth Guidance: Reaffirmed 5% to 7% growth target, anchored to non-GAAP 2024 EPS of $1.97. Capital Investment: $662 million invested year-to-date; on track to invest a record $1.7 billion in infrastructure improvements. Operating Expenses (O&M): Increased by approximately $5.1 million, or 3.5%; excluding merger costs, increased by 2.6%. Regulatory Recoveries and Surcharges: Provided a $0.06 increase to EPS in the quarter. Water Volumes: Higher volumes contributed $0.02 to EPS. Customer Growth (Water segment): Added $0.01 to EPS from acquisitions and organic expansion. Gas Volumes: Lower volumes had a $0.02 negative impact on EPS. Depreciation and Interest: Increased depreciation and higher interest/lower AFUDC combined for a $0.06 negative impact on EPS. Dividend: Board approved a 5.25% increase in the quarterly cash dividend, maintaining an 80-year track record of consecutive payments. Rate Cases and Surcharges: Finalized $56.6 million in annualized revenue; pending cases represent approximately $79.7 million (water/wastewater) and $163.2 million (Natural Gas) in requested increases. Acquisitions: Completed Integra Water LLC acquisition for $4.9 million, adding 1,100 customers; signed agreements to add about 200,000 customers for approximately $282 million. Warning! GuruFocus has detected 7 Warning Signs with WTRG. High Yield Dividend Stocks in Gurus' Portfolio This Powerful Chart Made Peter Lynch 29% A Year For 13 Years How to calculate the intrinsic value of a stock? Is WTRG fairly valued? Test your thesis with our free DCF calculator. Release Date: August 05, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Essential Utilities Inc (NYSE:WTRG) reaffirmed its 5% to 7% multiyear EPS growth guidance, anchored to 2024 adjusted EPS of $1.97, with confidence in meeting 2026 targets. The company received three regulatory approvals for its merger with American Water (Kentucky, Ohio, Virginia) and reached a settlement in principle in Texas, keeping the merger on track for Q1 2027 closing. Year-to-date capital investments reached $662 million, with plans to invest a record $1.7 billion in infrastructure improvements, enhancing system reliability and safety. The company finalized rate cases and surcharges totaling $56.6 million in annualized revenue, with a robust pipeline of pending cases representing $79.7 million in requested increases. Essential Utilities Inc (NYSE:WTRG) continued its 80-year dividend track record with a 5.25% increase in the quarterly cash dividend, reflecting strong shareholder value commitment. The acquisition pipeline remains strong, with signed agreements to add about 200,000 customers (including DELCORA) and a municipal acquisition pipeline of approximately 400,000 customers. O&M expenses, excluding merger-related costs, increased only 2.6%, aligning with historical norms and demonstrating cost discipline. The company benefited from a $0.06 increase in regulatory recoveries and surcharges, $0.02 from higher water volumes, and $0.01 from customer growth in the Water segment. GAAP EPS of $0.37 for Q2 2026 was down from $0.38 in the prior year, impacted by $0.06 in other items including higher depreciation and interest costs. The merger with American Water faces ongoing regulatory hurdles, with the DELCORA transaction stalled by a federal bankruptcy court stay and the Pennsylvania case still in evidentiary hearings. Higher operating expenses, including a $5.9 million increase in employee-related costs and $2.3 million in production costs, partially offset earnings gains. Lower gas volumes negatively impacted EPS by $0.02, reflecting softer demand in the Natural Gas segment. Fuel price increases due to Middle East tensions are driving higher costs across the company's fleet of 3,000 vehicles and equipment, which could pressure margins. The Pennsylvania regulatory environment is becoming more challenging, with the Governor's Office pushing for cost-effective capital and explicit necessity of investments, potentially affecting future rate case outcomes. The company faces uncertainty in the Pennsylvania water rate case filing, which was delayed to year-end, and only 55% of Pennsylvania capital is currently DSIC-eligible, limiting recovery mechanisms. Merger-related costs of $0.01 per share and increased interest expenses (with lower AFUDC) are weighing on earnings, with no immediate relief expected. Q: Can you provide more details on how you are planning the upcoming Aqua Pennsylvania rate case, particularly in light of the Governor's Office focus on ROE and capital structure?A: Chris Franklin (Chairman and CEO) stated that the company made a strategic decision to delay the filing of the Aqua Pennsylvania case due to the high volume of regulatory activity in the state, including the merger case and the Peoples Natural Gas case. The case is largely a capital case, so there is no complication. The company will file the case as it normally would, remaining respectful to the governor's position, and will let the commission determine a fair return. He noted that the commission's recent adjudication of American Water's case, which anchored the DSIC ROE around 9.7%, provides a good starting point for the debate. Q: How much of your capital expenditure qualifies for the DSIC mechanism versus what is recovered under a general rate case?A: Dan Schuller (CFO) explained that for 2026, approximately 55% of Pennsylvania capital is DSIC-eligible. This percentage is lower than in past years because the capital mix includes more plant work and less pipe work. Chris Franklin added that the company will continue to press for an expansion of the DSIC to include more capital items, which would have the effect of lengthening the period between rate cases. Q: What items could potentially move the merger close date with American Water, either earlier or later?A: Chris Franklin stated that things have gone largely according to plan. The states with statutory timelines, such as Illinois, are on track. In Pennsylvania, conversations have been constructive, though not all issues are agreed upon. He noted that the administrative law judge in Pennsylvania has 90 days to issue a recommendation, and if that takes longer, it could move the timeline. However, based on current schedules, the merger remains comfortably on track to close in the first quarter of 2027. Q: Can you provide guidance on the tax rate and any one-time items for the balance of the year?A: Dan Schuller (CFO) stated that the company expects a low-single-digit effective tax rate for the full year, consistent with the first half results (less than 5%). He also confirmed that a one-time item disclosed in the S-4 remains on track to be realized later this year, which will be beneficial to earnings and help the company land inside its 5% to 7% growth guidance target. Q: Are there any unusual inflationary costs, such as fuel price increases from the war abroad, or tariff refunds to call out?A: Dan Schuller (CFO) confirmed that fuel price increases are being seen across the platform due to the situation in the Middle East. With approximately 3,000 vehicles and pieces of equipment, higher fuel costs are impacting the company's numbers and will continue to do so until the situation calms down. He noted that no other unusual inflationary items are being seen at this time. Q: What were the primary drivers of the year-over-year EPS bridge for the second quarter?A: Dan Schuller (CFO) detailed that Q2 2026 GAAP EPS of $0.37 benefited from a $0.06 increase in regulatory recoveries and surcharges, $0.02 from higher water volumes, and $0.01 from customer growth in the Water segment. These gains were partially offset by $0.02 in higher operating expenses, $0.02 from lower gas volumes, and $0.06 from other items, including $0.03 from increased depreciation and $0.03 from higher interest and lower AFUDC. Q: Can you provide more color on the O&M expense increase for the quarter?A: Dan Schuller (CFO) explained that O&M increased by approximately $5.1 million, or 3.5%. This was driven by a $5.9 million increase in employee-related costs (merit increases and higher medical claims), a $2.3 million increase in production costs, and $800,000 for newly acquired customers. These were partially offset by a $4.9 million reduction in insurance expenses due to a recovery, a $2.4 million decrease in Gas segment bad debt, and a $1.5 million decrease in customer assistance surcharge costs. Excluding $1.2 million in merger-related expenses, O&M increased by 2.6%. Q: What is the status of the regulatory approvals for the merger with American Water?A: Chris Franklin reported that the company has received three regulatory approvals from Kentucky, Ohio, and Virginia. In Texas, a settlement in principle has been reached. Public input hearings are scheduled in New Jersey for August. The process in North Carolina continues as planned, with testimony filed at the end of last week. The Illinois case is now with the ALJ and has a statutory timeline finishing by November. In Pennsylvania, negotiations continue during evidentiary hearings this week. The merger is expected to close in Q1 2027. Q: Can you provide an update on the company's acquisition strategy and pipeline?A: Chris Franklin highlighted the recent completion of the Integra Water LLC acquisition in Texas for $4.9 million, adding 1,100 customers. The company has signed purchase agreements for several small systems across multiple states. In total, including DELCORA, the company is adding about 200,000 customers with a purchase price of approximately $282 million. The DELCORA transaction remains stalled by a federal bankruptcy court stay, but the agreement is fully enforceable and assumable by American Water. The overall pipeline of potential municipal acquisitions stands at approximately 400,000 customers. Q: What is the company's capital investment plan and dividend update?A: Chris Franklin confirmed that year-to-date capital investments total $662 million, and the company is on track to invest a record $1.7 billion in infrastructure improvements this year. The Board approved a 5.25% increase in the quarterly cash dividend, continuing an 80-year track record of consecutive quarterly dividends. The dividend is payable on September 1, 2026, to shareholders of record on August 11, 2026. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Essential Utilities Inc. WTRG reported second-quarter 2026 adjusted earnings of 38 cents per share, in line with the Zacks Consensus Estimate and reflecting no surprise. GAAP earnings were 37 cents per share, down 2.6% from 38 cents a year ago, as merger-related costs weighed on results. Quarterly revenues of $530.9 million rose 3.1% year over year and beat the consensus estimate of $502 million by 5.76%. Regulatory recoveries and purchased gas costs supported the top line, while regulated water revenues advanced 7.6%. Regulated water segment revenues totaled $357.5 million, up from $332.3 million in the second quarter of 2025. Regulatory recoveries and increased volume were the largest contributors to the growth.Regulated natural gas revenues declined to $169.3 million from $177.3 million a year ago. Higher rates and surcharges provided support, but lower purchased gas costs and reduced volumes due to warmer weather pressured the segment. Essential Utilities Inc. price-consensus-eps-surprise-chart | Essential Utilities Inc. Quote Operations and maintenance expenses increased 3.5% year over year to $153.6 million in the second quarter of 2026 from $148.5 million a year earlier. The rise was mainly caused by higher employee-related costs, including annual merit increases and increased medical claims, along with higher water and wastewater production expenses. Operating income reached $193.3 million, up 4.3% from $185.3 million a year earlier. Net income, however, declined 1.9% to $105.7 million from $107.8 million, reflecting higher interest expense and other cost pressures. Essential invested $662.2 million in regulated water and natural gas infrastructure during the first six months of 2026. The company remains on track to invest $1.7 billion in infrastructure for the full year.Rate awards and infrastructure surcharges secured so far in 2026 are expected to increase annual water revenues by $43.9 million and natural gas revenues by $12.7 million. Pending water and wastewater cases seek $79.7 million in incremental annual revenues, while a Pennsylvania natural gas case requests a $163.2 million increase. As of June 30, 2026, net property, plant and equipment totaled $14.75 billion, up from $14.26 billion at the end of 2025. Long-term debt, excluding the current portion, increased to $8.42 billion from $8.11 billion.The company had $960 million available under its credit lines, while the weighted average cost of fixed-rate long-term debt was 4.16%. Essential also raised its quarterly dividend 5.25% to 36.06 cents per share, payable on Sept. 1, 2026, to shareholders of record as of Aug. 11. The company reaffirmed its expectation for adjusted earnings growth of 5% to 7% annually from adjusted 2024 earnings of $1.97 per share through 2027. Its guidance continues to incorporate signed municipal water and wastewater acquisitions, excluding the pending DELCORA transaction. The Zacks Consensus Estimate is currently pegged at $2.21 per share.Essential also continues to expect its merger with American Water to close in the first quarter of 2027. The transaction has received regulatory approvals in Kentucky, Ohio and Virginia, while shareholders of both companies approved the merger-related proposals in February 2026. Essential currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. American Water Works Company Inc. AWK reported second-quarter 2026 adjusted earnings of $1.61 per share, which beat the Zacks Consensus Estimate of $1.59 by 1.3%. The bottom line increased 8.1% from $1.49 in the year-ago quarter.Revenues of $1.36 billion surpassed the Zacks Consensus Estimate of $1.28 billion by 6.2% and rose 6.2% year over year. The company added nearly 52,000 customer connections through acquisitions in the first half.California Water Service Group CWT reported second-quarter 2026 earnings of 93 cents per share, up 31% year over year. The figure beat the Zacks Consensus Estimate of 79 cents per share by 17.72%.Quarterly revenues rose 16.5% to $308.6 million and surpassed the Zacks Consensus Estimate of $277 million by 11.41%. Results benefited from regulatory catch-up revenues, rate changes and higher customer consumption, while infrastructure investment reached a record $147 million. American States Water AWR is slated to report second-quarter 2026 results on Aug. 5, after market close. The Zacks Consensus Estimate for AWR’s second-quarter EPS is pegged at 93 cents, implying an increase of 6.9% from the prior-year figure. The company has a dividend yield of 2.29%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Essential Utilities Inc. (WTRG) : Free Stock Analysis Report American Water Works Company, Inc. (AWK) : Free Stock Analysis Report California Water Service Group (CWT) : Free Stock Analysis Report American States Water Company (AWR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Affirms Financial and Growth Guidance GAAP Earnings of $0.37 per share for Q2 2026 and adjusted earnings per share of $0.38 (non-GAAP) which exclude transaction costs associated with the pending merger with American Water Affirms anticipated growth in earnings per share at a compound annual growth rate of 5 to 7% Increased quarterly dividend 5.25% Invested $662.2 million in infrastructure in the first six months of the year; on track to invest $1.7 billion in 2026 Received orders from Public Utilities Commission of Ohio and the Virginia State Corporation Commission approving merger with American Water BRYN MAWR, Pa., August 04, 2026--(BUSINESS WIRE)--Essential Utilities Inc. (NYSE: WTRG) today reported results for the second quarter ended June 30, 2026. Company Highlights "Our commitment to operational efficiency, proactive cost optimization, and value driven customer experience investments underpins our confidence in driving strong performance for 2026. While our organization transitions towards the targeted Q1 2027 merger with American Water, we remain steadfast in our commitment to driving peak operational performance," said Essential Utilities Chairman and Chief Executive Officer Christopher Franklin. "We are confident that the combination with American Water will bring exciting new opportunities, and we believe that, together, we will deliver significant benefits to our combined customers and shareholders. Crucially, both companies share a dedicated focus on smart capital deployment targeting measurable reliability and quality service. This will allow us to uphold our strong safety and reliability metrics while continuing to deliver affordable, cost-effective utility solutions," Franklin added. "The regulatory approval processes for our merger with American Water continue to progress. On June 22nd, we received approval of the merger from the Virginia State Corporation Commission, and on May 14th we received approval from the Public Utilities Commission of Ohio. Previously, we received regulatory approval for the merger from the Kentucky Public Service Commission. As a reminder, we filed in all pertinent states before the end of 2025. In February, at the special shareholder meeting to approve the merger, approximately 95% of the voted shares were cast in favor of the transaction. This overwhelming mandate supports what we have believed from the start: that this combination creates a premier, multi-state utility with a high growth profile," Franklin added. Second Quarter 2026 Operating Results Essential reported GAAP net income of $105.7 million and earnings per share of $0.37 for the second quarter of 2026, compared to GAAP net income of $107.8 million and earnings per share of $0.38 for the same period in 2025. The second quarter Q2 2026 non-GAAP EPS of $0.38, reflects business results without the impact of merger-related expenses incurred in the quarter. Revenues for the quarter were $530.9 million compared to $514.9 million in the second quarter of 2025, an increase of 3%. Additional revenues from regulatory recoveries and purchased gas costs were the main revenue drivers. Operations and maintenance expenses were $153.6 million for the second quarter of 2026, compared to $148.5 million in the second quarter of 2025, an increase of 3.5%, primarily due to increases in employee-related costs of $5.9 million, including annual merit increases and higher medical claims, and an increase in production costs for water and wastewater operations of $2.3 million, offset by a decrease in insurance expenses of $4.9 million primarily due to insurance recoveries, a decrease in bad debt expense of $2.9 million, a decrease in customer assistance surcharge costs of $1.5 million, which generally has an offsetting amount in revenues, and merger-related expenses of $1.2 million. Excluding merger related costs, O&M expenses increased by 2.6%. Essential’s regulated water segment reported revenues for the quarter of $357.5 million, an increase of 7.6% compared to $332.3 million in the second quarter of 2026. Regulatory recoveries and increased volume were the largest contributors to the increase in revenues for the period. Operations and maintenance expenses for Essential’s regulated water segment increased to $109.4 million for the second quarter of 2026 compared to $100.1 million in the second quarter of 2025, driven by increased employee-related costs, increases in production costs for water and wastewater operations particularly purchased water and chemical costs, and additional operating costs associated with acquisitions of water and wastewater systems. Excluding the one-time items and the impact of abnormal weather, operations and maintenance expenses for the full year are expected to be in line with historic norms. Essential’s regulated natural gas segment reported revenues for the quarter of $169.3 million, compared to $177.3 million in the second quarter of 2025, driven primarily by higher rates and surcharges, a decrease in purchased gas costs, and lower volumes due to warm weather conditions during the second quarter of 2026 as compared to 2025. Operations and maintenance expenses for Essential’s regulated natural gas segment were essentially flat at $49.9 million for the second quarter of 2026 compared to $49.8 million in the second quarter of 2025. For the first six months of 2026, the Company reported revenues of $1,392.6 million, a 7.2% increase, primarily due to regulatory recoveries, increased purchased gas costs, and higher volumes in the regulated natural gas segment, compared to $1,298.5 million in the first half of 2025. Operations and maintenance expenses for the first half of 2026 totaled $329.4 million, compared to $286.3 million in 2025, including $17.5 million of merger related expenses in 2026. Net Income for the first half of 2026 totaled $330.1 million, or $1.16 per share, compared to $391.6 million, or $1.41 per share for the same period of 2025. Dividend As previously announced on July 29, 2026, Essential’s board of directors increased the quarterly cash dividend, 5.25% to $0.3606 per share of common stock. This dividend will be payable on September 1, 2026, to shareholders of record on August 11, 2026. Essential Utilities has paid consecutive quarterly cash dividends for over 80 years and has increased the dividend 36 times in the last 35 years. Financing As of June 30, 2026, Essential’s weighted average cost of fixed-rate long-term debt was 4.16%, and the company had $960 million available on its credit lines. Rate Activity Thus far in 2026, the Company’s regulated water segment received rate awards or infrastructure surcharges that will increase annual revenues in Pennsylvania, Illinois, Ohio, North Carolina and Indiana by $43.9 million, and its regulated natural gas segment received rate awards or infrastructure surcharges in Kentucky and Pennsylvania of $12.7 million. The Company currently has base rate cases or infrastructure surcharges pending in Texas, Virginia, Illinois, Indiana and New Jersey for its regulated water and wastewater segment for an estimated $79.7 million in incremental annual revenues. The company currently has a base rate case pending in Pennsylvania for its natural gas segment with a requested revenue increase of $163.2 million to support its Long-Term Infrastructure Improvement Plan, which involves the replacement and retirement of aging gas mains and the associated reduction of greenhouse gas emissions. Capital Expenditures Essential invested approximately $662.2 million in the first six months of 2026 to improve its regulated water and natural gas infrastructure systems and to enhance customer service across its operations. The Company continues to be a leader in the United States at replacing miles of aged underground utility pipes and is committed to maintaining elevated levels of infrastructure investment. Essential is on track to invest $1.7 billion in needed infrastructure investments in 2026. Water Utility Growth by Acquisition Essential’s continued growth by acquisition allows the company to provide safe and reliable water and wastewater service to a larger customer base than it could from organic customer growth alone. Since 2015, Essential has acquired approximately $570 million in rate base and added more than 138,000 new customers or equivalent dwelling units to the company’s footprint. In May 2026, the Company acquired Integra Water Texas, LLC's wastewater system in Bastrop County, Texas, for approximately $4.9 million. The Company has signed purchase agreements for additional water and wastewater systems in Pennsylvania, Texas, North Carolina and New Jersey that are pending closing and are expected to serve over 200,000 customers or equivalent dwelling units and total approximately $282 million in purchase price. The Company’s $276.5 million agreement to acquire the Delaware County Regional Water Quality Control Authority (DELCORA), a Pennsylvania sewer authority that serves approximately 198,000 equivalent dwelling units in the Philadelphia suburbs, is included among these signed purchase agreements. The pipeline of potential water and wastewater municipal acquisitions the Company is actively pursuing represents approximately 400,000 total customers. Merger with American Water Works Company, Inc. The Company is continuing to progress through the process of obtaining the consents and approvals needed to successfully consummate the proposed merger with American Water. On February 10, 2026, shareholders of both companies voted overwhelmingly in favor of merger-related proposals. In 2025, Essential submitted applications for required regulatory approval in all states where applicable. On June 22, 2026, we received an order from the Virginia State Corporation Commission approving the merger. Previously we had obtained regulatory approval for the merger from public utility commissions in Kentucky and Ohio. We continue to expect the merger to close in the first quarter of 2027. Financial and Growth Guidance The Company’s latest expectations are the following: Anticipated growth in long-term earnings per share at a compound annual growth rate of 5% to 7% from the adjusted 2024 earnings per share of $1.97 (non-GAAP) for the three-year period through 2027. In 2026, regulated infrastructure investments are expected to be $1.7 billion. Multiyear plan to ensure that finished water does not exceed the federal maximum contaminant level of the six EPA-regulated PFAS chemicals. Guidance Assumptions Essential Utilities does not guarantee future results of any kind. Guidance is subject to risks and uncertainties, including, without limitation, those factors outlined in the "Forward Looking Statements" of this release and the "Risk Factors" section of the company’s annual and quarterly reports filed with the Securities and Exchange Commission. The earnings per share and infrastructure investment include the municipal water and wastewater acquisitions for which the company has entered into signed purchase agreements as of the date the guidance was announced, but do not include DELCORA or other potential acquisitions from the company’s list of acquisition opportunities that currently represents over 400,000 customer equivalents. While the company remains confident in its ability to close DELCORA, for guidance purposes, DELCORA has been removed from all guidance metrics. The company’s guidance includes the expectation that the company will continue to issue equity and debt on an as-needed basis to support acquisitions and capital investment plans. Essential Utilities believes that the non-GAAP financial measure "adjusted earnings per share" used for 2024 and identified as part of its multi-year financial and growth guidance supplements investors the ability to measure the company’s financial operating performance for 2024, including by adjustment, as compared to the Company’s operating performance in 2024. 2Q 2026 Earnings Call Information Date: August 5th, 2026Time: 11 a.m. EDT (please dial in by 10:45 a.m.)Webcast and slide presentation link: https://www.essential.co/events-and-presentations/events-calendar The call and presentation will be webcast live so interested parties may listen over the internet by logging on to Essential.co and following the link for Investors. The conference call will be archived in the Investor Relations section of the company’s website following the call. About Essential Essential Utilities, Inc. (NYSE: WTRG) delivers safe, clean, reliable services that improve quality of life for individuals, families, and entire communities. With a focus on water, wastewater, and natural gas, Essential is committed to sustainable growth, operational excellence, a superior customer experience, and premier employer status. We are advocates for the communities we serve and are dedicated stewards of natural lands, protecting thousands of acres of forests and other habitats throughout our footprint. Operating as the Aqua and Peoples brands, Essential serves approximately 5.5 million people across nine states. Essential is one of the most significant publicly traded water, wastewater service and natural gas providers in the U.S. Learn more at www.essential.co. Forward-Looking Statements This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which generally include words such as "believes," "expects," "intends," "anticipates," "estimates," and similar expressions. The Company can give no assurance that any actual or future results or events discussed in these statements will be achieved. Any forward-looking statements represent its views only as of today and should not be relied upon as representing its views as of any subsequent date. Readers are cautioned that such forward-looking statements are subject to a variety of risks and uncertainties that could cause the company’s actual results to differ materially from the statements contained in this release. Such forward-looking statements include, among others: the anticipated receipt of regulatory approvals for, and closing of, the company’s proposed merger with American Water; the guidance range of net income per diluted common share; the anticipated amount of infrastructure investment in 2026; and the Company’s anticipated use of equity and debt financing. There are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements including: the expected timing and likelihood of completion of our proposed merger with American Water; changes in the EPAs regulations; changes in the United States’ governmental policies, including those from the Executive Branch; disruptions in the global economy; potential disruptions in the supply chain for raw and finished materials; the continuation of the company's growth-through-acquisition program; general economic business conditions; the company’s ability to successfully execute any equity or debt financing transactions, including on an as needed basis; housing and customer growth trends; unfavorable weather conditions; the success of certain cost-containment initiatives; changes in regulations or regulatory treatment; the company’s ability to successfully close municipally owned systems presently under agreement and successfully complete other acquisitions and dispositions; and other factors discussed in our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q, which are filed with the Securities and Exchange Commission. For more information regarding risks and uncertainties associated with Essential's business, please refer to Essential's annual, quarterly, and other SEC filings. Essential is not under any obligation - and expressly disclaims any such obligation - to update or alter its forward-looking statements whether as a result of new information, future events, or otherwise. View source version on businesswire.com: https://www.businesswire.com/news/home/20260803594126/en/ Contacts Media Contact:David KralleVice President, Public AffairsMedia Hotline: [email protected] Investor Contact: Brian DingerdissenVice President, Treasurer, FP&A, and IRO: [email protected]

Essential Utilities (WTRG) came out with quarterly earnings of $0.38 per share, in line with the Zacks Consensus Estimate . This compares to earnings of $0.38 per share a year ago. These figures are adjusted for non-recurring items. A quarter ago, it was expected that this water utility would post earnings of $1.01 per share when it actually produced earnings of $0.83, delivering a surprise of -17.82%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Essential Utilities, which belongs to the Zacks Utility - Water Supply industry, posted revenues of $530.85 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 5.83%. This compares to year-ago revenues of $514.91 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Essential Utilities shares have added about 1.1% since the beginning of the year versus the S&P 500's gain of 11%. While Essential Utilities has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Essential Utilities was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.35 on $498.71 million in revenues for the coming quarter and $2.21 on $2.51 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Utility - Water Supply is currently in the bottom 15% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Cadiz (CDZI), another stock in the same industry, has yet to report results for the quarter ended June 2026. This renewable resource company is expected to post quarterly loss of $0.10 per share in its upcoming report, which represents a year-over-year change of +9.1%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Cadiz's revenues are expected to be $4.22 million, up 2.1% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Essential Utilities Inc. (WTRG) : Free Stock Analysis Report Cadiz, Inc. (CDZI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in American Water Works Company, Inc.? Here are five stocks we like better. American Water reported stronger Q2 earnings, with adjusted EPS rising to $1.61 from $1.49 year over year, and reaffirmed its 2026 adjusted EPS guidance of $6.02–$6.12, implying approximately 8% growth. Growth is being supported by authorized rate increases, infrastructure investment and acquisitions, including the Nexus Water Group transaction; the company invested $1.8 billion in the first half of 2026 and had 57,000 additional customer connections under agreement. Regulatory activity remains central to the outlook: American Water advanced rate cases across several states and received further approvals for its proposed Essential Utilities merger, which it still expects to complete by the end of Q1 2027. Water Infrastructure: Why This Boring Sector Could Get Exciting American Water Works (NYSE:AWK) reported higher second-quarter earnings and reaffirmed its full-year outlook, citing rate increases, cost controls, infrastructure investment and continued acquisition activity. Adjusted earnings were $1.61 per share in the second quarter of 2026, up from $1.49 per share a year earlier. For the first six months of the year, adjusted earnings were $2.62 per share, compared with $2.51 per share in the first half of 2025. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now 3 American Outperformers Are Lifting and Initiating Dividends President and CEO John Griffith said the company remains on track to meet its 2026 earnings guidance and long-term growth objectives. American Water again affirmed adjusted EPS guidance of $6.02 to $6.12 for 2026, which it said represents an expectation of approximately 8% earnings-per-share growth. The company also maintained its expectation for EPS and dividend growth within a 7% to 9% range through 2030 and beyond. Executive Vice President and CFO David Bowler said second-quarter revenue rose as authorized rate increases took effect across the company’s state operations. Depreciation, financing costs and general taxes also increased as expected, while operation and maintenance expenses were flat from the prior-year quarter. → Microsoft Just Flipped the AI Spending Narrative Overnight Beat the Volatility: Top 3 Low-Beta Stocks to Watch Bowler said most of American Water’s EPS growth is expected in the second half of 2026, as revenue increases in key states are expected to take effect later in the third quarter. As of June 30, the company’s total debt-to-capital ratio was 58%. American Water completed a $500 million long-term debt issuance on May 20 at a 4.625% rate. In June, it settled 3.4 million shares of approximately 8 million shares under equity forward agreements, generating net proceeds of $476 million. The company expects to settle its remaining equity forwards in the fourth quarter. → Carrier Earnings Could Send the Stock to a New All-Time High Griffith said American Water completed rate cases in West Virginia, Maryland and Pennsylvania during 2026, with the proceedings authorizing recovery of nearly all capital investments made in those states. In Pennsylvania, the company received a final order approving a $75 million annualized increase in water and wastewater revenue, compared with its requested $160 million increase. The order authorized a 9.55% return on equity and a 54.2% equity component. New rates are scheduled to take effect Aug. 13. The company has general rate cases underway in six jurisdictions. It reached a black-box settlement with staff and several intervenors in Virginia in June, along with a partial settlement with California’s Public Advocates Office. American Water said it was in confidential settlement discussions in New Jersey, while its Illinois case is scheduled for evidentiary hearings in August, briefing in September and a proposed order in October. American Water also filed rate cases in Kentucky and Missouri. The Kentucky filing seeks $18 million in additional annual revenue and reflects $108 million in planned system investments from January through December 2027. The Missouri filing seeks $179 million in additional annual revenue and reflects $1.6 billion in system investments from June 2025 through May 2028. Bowler said the Missouri proceeding is the company’s first using the state’s fully forecasted future test-year legislation enacted last year. During the question-and-answer session, Griffith said capital investment is the main driver of the company’s rate-case timing in Pennsylvania. He said the company is exploring a broader distribution system improvement charge mechanism that could provide interim recovery between rate cases and help smooth customer bill increases. Bowler said roughly 40% of the company’s Pennsylvania capital spending currently falls under the DSIC mechanism, and broader eligibility would require legislative changes. American Water invested $1.8 billion in capital projects and acquisitions during the first half of 2026. Chief Operating Officer Cheryl Norton said the spending supported infrastructure renewal, resilience, water-quality work and newly acquired systems. The company completed its acquisition of systems from Nexus Water Group on June 1, ahead of its original projected timetable. The transaction added 47,000 customer connections and 70 local employees. As of June 30, American Water had approximately 57,000 customer connections under agreement across six states, representing $236 million. Norton said the company remains focused on balancing investment needs with customer affordability and expects its average monthly residential water bills to remain at or below 1% of median household income for many years. American Water also reported additional regulatory progress on its proposed merger with Essential Utilities. After receiving approval in Kentucky in April, the company said it received approvals in Ohio and Virginia during May and June. Griffith said merger proceedings in other states were continuing as planned, including progress in Texas, where the company reached a settlement in principle. He said public input hearings in Pennsylvania had shown support for the transaction and that integration planning with Essential Utilities was continuing. The company continues to expect the merger to close by the end of the first quarter of 2027. American Water Works Company, Inc (NYSE: AWK) is a publicly traded utility company that provides water and wastewater services in the United States. Its core business is the operation, management and maintenance of regulated water and wastewater systems that deliver potable water, collect and treat wastewater, and provide related customer services to residential, commercial and industrial customers as well as municipalities. The company's operations include water treatment and distribution, wastewater collection and treatment, meter reading and billing, emergency repairs, and long-term infrastructure planning and capital project execution. In addition to its regulated utility operations, American Water offers complementary nonregulated services and solutions that support system reliability and customer needs. 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 "American Water Works Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.