Essential Utilities Inc. (NYSE: WTRG) reported third‑quarter 2025 results that surpassed analyst expectations, delivering a net income of $92.1 million and earnings per share of $0.33—$0.06 above the consensus estimate of $0.27. Revenue rose 9.6% to $477.0 million, a slight $0.25 million short of the $477.25 million consensus, but still a robust year‑over‑year gain driven by rate increases in both its regulated water and natural gas businesses.
The water segment generated $364.1 million in revenue, up 8.8% from the prior year, while the natural gas segment posted $108.5 million, up 12.1%. Operating and maintenance costs increased 6.0% to $153.1 million, largely due to higher labor and production expenses. The company offset this rise with a reduction in legal and outside‑services costs in the gas business, allowing operating income to grow 9.5% year‑over‑year and supporting the EPS beat through disciplined cost control and the pricing power of its regulated rate base.
Capital spending remains a priority: Essential Utilities plans $1.4 to $1.5 billion in 2025 and $7.8 billion through 2029 to modernize infrastructure. The company also announced a $26 million investment in a data‑center facility in Western Pennsylvania, a move expected to generate higher returns than traditional utility operations. In line with these investments, the company adjusted its 2025 equity‑raise target from $315 million to $350 million to fund the data‑center project and the forthcoming merger with American Water Works.
Management reaffirmed its 2025 earnings‑per‑share guidance of $2.07 to $2.11, unchanged from the prior outlook, signaling confidence that the company’s rate‑setting authority and disciplined cost base will sustain full‑year performance. The company also reiterated its 5%‑to‑7% compound annual growth target through 2027, underscoring a long‑term growth strategy that includes the all‑stock merger with American Water, expected to close by the end of Q1 2027 and create a leading U.S. water and wastewater utility with a pro‑forma market capitalization of roughly $40 billion.
Investors reacted positively to the earnings release, citing the EPS beat, the company’s ability to capture regulatory recoveries, and the strategic momentum from the American Water merger. Management highlighted the company’s commitment to disciplined capital allocation and its focus on high‑return diversification through the data‑center investment, reinforcing confidence in its long‑term value creation.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.