Q3 2026 (three months and nine months ended September 30, 2026)
Filed Nov 5, 2026Q3 2026 net income $21.6 million, diluted EPS $0.89 (GAAP and adjusted); nine-month adjusted EPS $4.40, up 8.4 percent; 2026 capex and 2028 EPS guidance affirmed; FEP joint venture with NextEra announced
Third-quarter and nine-month net income, EPS and operating income rose versus the prior year, with adjusted gross margin growth of $11.5 million in Q3 and $42.7 million year to date as reported. Operating expenses, interest charges and short-term borrowing also rose, and the filing gives no operating or free cash flow figures to assess funding of the capital program. Guidance was affirmed rather than changed.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total operating revenues, Q3 2026GAAP | $195.8M | – | – |
| Regulated Energy operating revenues, Q3 2026GAAP | $165M | – | – |
| Unregulated Energy operating revenues, Q3 2026GAAP | $37.8M | – | – |
| Other Businesses and Eliminations operating revenues, Q3 2026GAAP | −$7M | – | – |
| Regulated natural gas and electricity costs, Q3 2026GAAP | $38.7M | – | – |
| Unregulated propane and natural gas costs, Q3 2026GAAP | $8.4M | – | – |
| Operations expense, Q3 2026GAAP | $60.1M | – | – |
| Maintenance expense, Q3 2026GAAP | $7.6M | – | – |
| Depreciation and amortization, Q3 2026GAAP | $23M | – | – |
| Other taxes, Q3 2026GAAP | $9.4M | – | – |
| FCG transaction and transition-related expenses, Q3 2026GAAP | — | – | – |
| Total operating expenses, Q3 2026GAAP | $147.2M | – | – |
| Operating income, Q3 2026GAAP | $48.6M | – | – |
| Other income, net, Q3 2026GAAP | $400K | – | – |
| Interest charges, Q3 2026GAAP | $19M | – | – |
| Income before income taxes, Q3 2026GAAP | $30M | – | – |
| Income taxes, Q3 2026GAAP | $8.4M | – | – |
| Net income, Q3 2026GAAP | $21.6M | – | – |
| Diluted EPS, Q3 2026GAAP | $0.89 | – | – |
| Basic EPS, Q3 2026GAAP | $0.89 | – | – |
| Gross margin, Q3 2026GAAP | $97.3M | – | – |
| Adjusted gross margin, Q3 2026non-GAAP | $148.7M | – | Growth of $11.5 million as printed |
| Adjusted net income, Q3 2026non-GAAP | $21.6M | – | – |
| Adjusted diluted EPS, Q3 2026non-GAAP | $0.89 | – | – |
| Capital invested, Q3 2026other | $151.2M | – | – |
| Total operating revenues, nine months 2026GAAP | $750.8M | – | – |
| Regulated Energy operating revenues, nine months 2026GAAP | $578.6M | – | – |
| Unregulated Energy operating revenues, nine months 2026GAAP | $196.7M | – | – |
| Other Businesses and Eliminations operating revenues, nine months 2026GAAP | −$24.5M | – | – |
| Regulated natural gas and electricity costs, nine months 2026GAAP | $179.9M | – | – |
| Unregulated propane and natural gas costs, nine months 2026GAAP | $65.8M | – | – |
| Operations expense, nine months 2026GAAP | $185.1M | – | – |
| Maintenance expense, nine months 2026GAAP | $22.6M | – | – |
| Depreciation and amortization, nine months 2026GAAP | $67.4M | – | – |
| Other taxes, nine months 2026GAAP | $29.1M | – | – |
| FCG transaction and transition-related expenses, nine months 2026GAAP | — | – | – |
| Total operating expenses, nine months 2026GAAP | $549.9M | – | – |
| Operating income, nine months 2026GAAP | $200.9M | – | – |
| Other income, net, nine months 2026GAAP | $900K | – | – |
| Interest charges, nine months 2026GAAP | $56.1M | – | – |
| Income before income taxes, nine months 2026GAAP | $145.7M | – | – |
| Income taxes, nine months 2026GAAP | $39.4M | – | – |
| Net income, nine months 2026GAAP | $106.3M | – | – |
| Diluted EPS, nine months 2026GAAP | $4.40 | – | – |
| Basic EPS, nine months 2026GAAP | $4.42 | – | – |
| Gross margin, nine months 2026GAAP | $355.9M | – | – |
| Adjusted gross margin, nine months 2026non-GAAP | $505.1M | – | Growth of $42.7 million and a 9.2 percent growth rate as printed |
| Adjusted net income, nine months 2026non-GAAP | $106.3M | – | – |
| Adjusted diluted EPS, nine months 2026non-GAAP | $4.40 | – | 8.4 percent year-to-date growth rate as printed |
| Capital invested, nine months 2026other | $412.8M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Regulated Energy, Q3 2026The filing prints Regulated Energy adjusted gross margin of $126.3 million versus $114.7 million. The release lists rate case, transmission, infrastructure and natural gas growth items in the adjusted gross margin bridge without assigning them to this segment's revenue. | $165M | – | – |
| Unregulated Energy, Q3 2026The filing prints Unregulated Energy adjusted gross margin of $22.5 million versus $22.4 million. Its bridge lists increased propane margins and service fees and decreased CNG/RNG/LNG services among the adjusted gross margin items. | $37.8M | – | – |
| Other Businesses and Eliminations, Q3 2026The filing prints adjusted gross margin of $(0.1) million for this segment in Q3 2026 and $0.1 million in Q3 2025, with no further explanation. | −$7M | – | – |
| Regulated Energy, nine months 2026The filing prints Regulated Energy adjusted gross margin of $398.7 million versus $360.5 million. The nine-month bridge lists natural gas transmission service expansions, regulated infrastructure programs and rate changes among the adjusted gross margin items. | $578.6M | – | – |
| Unregulated Energy, nine months 2026The filing prints Unregulated Energy adjusted gross margin of $106.5 million versus $101.9 million for the nine months. | $196.7M | – | – |
| Other Businesses and Eliminations, nine months 2026The filing prints adjusted gross margin of $(0.1) million for the nine months 2026 and $0.0 million is not printed for 2025; the 2025 column shows an em dash for this line. | −$24.5M | – | – |
2026 capital expenditure; five-year capital investment through 2028; 2028 EPS outlook
- Note2026 capital expenditure guidance of $550 - $600 million, affirmed
- NoteTotal capital investment for the five-year period ended 2028 expected to exceed $2.2 billion
- Note2028 EPS guidance of $7.75 - $8.00 per share, reaffirmed
- NoteLong-term guidance update (2027 to 2031 capital range and EPS growth rate, and 2027 capex guidance) expected during the Full-Year 2026 earnings call in February 2027
Capital returns
- New at-the-market equity offering program providing the option to issue and sell up to $225 million of common stock, with forward sale agreements, to support strategic growth initiatives in the coming years
- Common shares issued under the DRIP/DSPP and ATM program of approximately 0.6 million shares; the filing states this increased shares outstanding and reduced Q3 EPS by $(0.03) and nine-month EPS by $(0.15)
- Dividends payable on the balance sheet of $17.8 million at September 30, 2026 versus $16.4 million at December 31, 2025; the filing does not print dividends paid or the dividend rate
What drove it
- The company states that nine-month adjusted gross margin growth was driven largely by regulatory initiatives and infrastructure programs, transmission expansion projects, natural gas organic growth, improved contributions from unregulated businesses, and increased customer consumption.
- Q3 adjusted gross margin bridge (company-printed): rate changes from recent rate case activities $3.1 million pre-tax; natural gas transmission service expansions $2.9 million; contributions from regulated infrastructure programs $2.8 million; natural gas growth including conversions $1.9 million; increased propane margins and service fees $1.0 million; changes in customer consumption $0.8 million; absence of recovered Hurricane Michael costs $(1.8) million.
- Q3 operating expense bridge (company-printed, pre-tax): payroll, benefits and other employee-related expenses $(3.9) million; facilities, maintenance and outside services $(3.1) million; depreciation, amortization and property taxes $(2.2) million; interest charges $(0.8) million.
- Nine-month adjusted gross margin bridge (company-printed, pre-tax) led by natural gas transmission service expansions $14.7 million and contributions from regulated infrastructure programs $11.5 million, with absence of recovered Hurricane Michael costs $(5.7) million.
- Company identifies Hurricane Michael cost recovery as offsetting both adjusted gross margin and depreciation and amortization in the current period.
- Major projects table shows Q3 2026 adjusted gross margin of $25.6 million versus $16.8 million, nine-month $73.1 million versus $39.7 million, and FY2026 estimate $94.0 million versus FY2025 $59.4 million (the FY2026 and FY2027 estimate columns are estimates printed by the company).
Concerns
- Operations expense rose to $60.1 million in Q3 2026 from $53.6 million and to $185.1 million for nine months from $166.5 million; maintenance expense rose to $22.6 million from $17.5 million for nine months.
- Interest charges rose to $19.0 million in Q3 2026 from $18.2 million and to $56.1 million for nine months from $54.1 million.
- Short-term borrowing increased to $325.9 million from $158.0 million since December 31, 2025, and the filing does not print cash flow data that explains this change.
- Equity issuance added shares: diluted weighted average shares were 24,300 thousand in Q3 2026 versus 23,629 thousand, and the company launched a new ATM program of up to $225 million.
- The FCG rate case final decision is expected in December 2026, and the FCG interim increase of $16.2 million on an annualized basis is described as interim.
- Unregulated Energy revenue declined to $37.8 million from $40.7 million in Q3, and CNG/RNG/LNG services decreased per the adjusted gross margin bridge.
What to watch
- Final decision on the FCG rate case, expected December 2026
- Long-term guidance update, including 2027 to 2031 capital range, EPS growth rate and 2027 capex guidance, at the Full-Year 2026 earnings call in February 2027
- Execution of the Florida Energy Pathway joint venture with NextEra Energy Resources (49 percent ownership of a $1.2 billion, 97-mile project), with the company stating that initial FEP investments are included in capex guidance
- Use of the up-to-$225 million ATM program and forward sale agreements
- Operating cash flow and free cash flow, which the filing does not print, against the $550 - $600 million capex guidance
- Short-term borrowing and interest charges as the capital program continues
- Q3 conference call on Friday, November 6, 2026, at 8:30 a.m. Eastern Time
Balance sheet and cash flow
- Cash and cash equivalents of $8.6 million at September 30, 2026 versus $1.8 million at December 31, 2025
- Short-term borrowing of $325.9 million at September 30, 2026 versus $158.0 million at December 31, 2025
- Long-term debt, net of current maturities of $1,307.1 million at September 30, 2026 versus $1,327.1 million at December 31, 2025
- Current portion of long-term debt of $131.7 million at September 30, 2026 versus $134.6 million at December 31, 2025
- Total assets of $4,317.4 million at September 30, 2026 versus $3,994.8 million at December 31, 2025
- Total stockholders' equity of $1,701.2 million at September 30, 2026 versus $1,598.5 million at December 31, 2025
- Net property, plant and equipment of $3,472.8 million at September 30, 2026 versus $3,118.4 million at December 31, 2025; construction work in progress of $441.4 million versus $283.7 million
- Investments in unconsolidated affiliate (FEP) of $7.2 million at September 30, 2026
- Operating cash flow and free cash flow are not printed in the filing
Analysis
Chesapeake Utilities reported Q3 2026 net income of $21.6 million and diluted EPS of $0.89, against $19.4 million and $0.82 in Q3 2025, and the release states that Q3 adjusted net income and adjusted EPS equal the GAAP figures ($21.6 million and $0.89) because the only adjustment in Q3 2025 was the FCG transaction expense. For the nine months, net income was $106.3 million and diluted EPS was $4.40, against $94.2 million and $4.03. Adjusted EPS of $4.40 compares with $4.06, which the company describes as year-to-date growth of 8.4 percent. Total operating revenues were $195.8 million in Q3 versus $179.6 million, and $750.8 million for nine months versus $671.1 million. The growth came mainly from Regulated Energy, which reported $165.0 million in Q3 versus $146.4 million, while Unregulated Energy was $37.8 million versus $40.7 million.
The filing's margin measures show the same pattern. Adjusted gross margin was $148.7 million in Q3 versus $137.2 million, with the company citing growth of $11.5 million, and $505.1 million for nine months versus $462.4 million, with growth of $42.7 million or 9.2 percent. GAAP gross margin was $97.3 million versus $91.8 million in Q3. Operating expenses rose across the lines printed: operations expense, maintenance, other taxes and regulated gas and electricity costs all increased in Q3, while unregulated propane and natural gas costs fell. Operating income was $48.6 million in Q3 versus $45.0 million and $200.9 million for nine months versus $182.1 million. Interest charges increased to $19.0 million in Q3 and $56.1 million for nine months. The company's own bridge attributes much of the adjusted gross margin growth to rate changes, transmission service expansions, infrastructure programs and natural gas growth, and lists Hurricane Michael cost recovery as a negative item in both periods.
Capital deployment is the largest item in the filing. The company invested $151.2 million in Q3 and $412.8 million year to date and reaffirmed 2026 capex guidance of $550 - $600 million, with five-year capital investment through 2028 expected to exceed $2.2 billion. Balance sheet figures show total assets of $4,317.4 million versus $3,994.8 million at December 31, 2025, net property, plant and equipment of $3,472.8 million versus $3,118.4 million, and construction work in progress of $441.4 million versus $283.7 million. Total stockholders' equity rose to $1,701.2 million from $1,598.5 million, while short-term borrowing rose to $325.9 million from $158.0 million. Long-term debt, net of current maturities, fell to $1,307.1 million from $1,327.1 million and the current portion was $131.7 million versus $134.6 million. The company also created an ATM program of up to $225 million, and the filing reports equity offerings reducing Q3 EPS by $(0.03). The release does not print operating cash flow or free cash flow, so the reader cannot see how the capital program is being funded from operations.
Guidance was affirmed, not changed. The company reaffirmed its 2028 EPS guidance of $7.75 - $8.00 and said it will give a long-term update, including 2027 to 2031 capital and EPS growth ranges and 2027 capex guidance, on the February 2027 full-year call. Near-term items named in the release are the FCG rate case final decision expected in December 2026 and the interim FCG increase of $16.2 million on an annualized basis that took effect in July 2026. The FEP joint venture, in which NextEra Energy Resources will finance and own 49 percent of a $1.2 billion, 97-mile project, is the main new strategic item, and the filing says initial FEP investments are included in the 2026 capex guidance. The release also refers readers to the Form 10-Q for a fuller discussion of FEP and the major projects table. The major projects table shows adjusted gross margin from the listed projects and regulatory initiatives rising to $25.6 million in Q3 from $16.8 million, and to $73.1 million for nine months from $39.7 million, as printed.
Management, verbatim
In the third quarter, we demonstrated continued earnings growth and made progress on the transformation of our business as we prepare for our next phase of growth and drive value for our customers and communities.
Jeff Householder, Chair of the Board, President and Chief Executive Officer
We are also excited to move forward with the FEP project through a strategic partnership with NextEra Energy Resources, which supports our disciplined approach to capital deployment and infrastructure investment.
Jeff Householder, Chair of the Board, President and Chief Executive Officer
Not in the filing
stated, not guessed- Previous quarter (Q2 2026) figures for qoq_change on all rows
- Prior-year percentage changes for total operating revenues, operating income, gross margin and most line items (not printed)
- Prior-year figures for Q3 2025 and nine months 2025 by segment for adjusted gross margin changes beyond those printed
- Operating cash flow, investing cash flow and free cash flow
- Dividends paid and dividend per share
- Shares repurchased (none printed)
- Cash balance at September 30, 2025 and debt maturity schedule beyond the balance sheet lines
- Previous outlook from the company's prior release (not provided), so vs_prior_guidance is empty
- Revenue, gross margin, operating expense and tax rate guidance (not printed)
- Amount of FCG rate case revenue increase beyond the interim $16.2 million annualized figure
- Consensus estimates and share price reaction (not provided)
- Segment-level revenue and adjusted gross margin for the prior-year nine-month period in the segments list is shown for adjusted gross margin only as printed in the reconciliation tables
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.