Essential Utilities (WTRG) Keeps Growing While Profits Quietly Slide

Essential Utilities (WTRG) shares rose 5% since its last earnings report, outperforming the S&P 500. Q2 2026 adjusted earnings met estimates at 38 cents per share, while revenues of $530.9 million beat estimates. Water segment revenues grew 7.6%, but natural gas revenues declined 4.5%. Operating income increased 4.3%, but net income fell 1.9% due to higher costs.

American Water (AWK) and Essential Utilities reached a non-unanimous settlement for their proposed merger, subject to final approval by the Pennsylvania Public Utility Commission. The merger, first announced in 2025, faces regulatory hurdles and potential market impacts. AWK's GF Value is estimated at $154.18, with a GF Score of 78/100.

American Water Works (AWK) and Essential Utilities (WTRG) said the U.S. HSR Act waiting period for their pending merger expired Aug. 14, 2026, satisfying a closing condition. They also reported state regulatory approvals in Kentucky, Ohio, and Virginia, with a Texas settlement in principle. The deal is expected to close by end of Q1 2027, subject to remaining conditions.

Essential Utilities (WTRG) reported Q2 revenue of $530.9 million, up 3%, and net income of $105.7 million (37 cents/share). Adjusted EPS was 38 cents. The company reaffirmed about $1.7 billion in 2026 infrastructure investment and 5% to 7% long-term EPS growth through 2027. Its American Water merger cleared additional Virginia and Ohio approvals, with a planned Q1 2027 close.

Ofwat’s draft determination would provisionally allow five water utilities, including Thames Water and Wessex Water, to raise customer bills between 2027 and 2030 to fund an extra £3.4bn of investment by the end of the decade. Ofwat will consult until Sept 24, with a final decision in December. Thames Water is debt-laden.

Essential Utilities (WTRG) held its Q2 2026 earnings call. It reported GAAP EPS of $0.37 (including about $0.01 merger costs) and non-GAAP EPS of $0.38. The company reiterated 2026 earnings growth guidance of 5% to 7% versus non-GAAP 2024 EPS of $1.97, reported $662 million invested YTD and a planned $1.7 billion in 2026, and discussed Pennsylvania regulatory actions, dividend increase to $0.25 quarterly, and merger integration.