Eversource Energy Reports Strong Earnings Amid Rising Expenses

HARTFORD, Conn. — Eversource Energy (ES) reported adjusted earnings of $1.01 per share for the fourth quarter of 2024, surpassing the Zacks Consensus Estimate of 99 cents by 2%. This performance also marked a 6.3% increase from the previous year’s adjusted earnings of 95 cents.

The utility giant’s revenues reached $2.97 billion, exceeding expectations by 5.7% compared to the Zacks Consensus Estimate of $2.81 billion. This reflects a robust 10.4% increase from $2.69 billion in the same quarter last year.

For the full year 2024, Eversource reported total revenues of $11.9 billion, slightly down from $11.91 billion in 2023. However, total operating expenses spiked significantly, reaching $2.62 billion, a 22.8% increase year over year, attributed to rising operations and maintenance expenses as well as increased depreciation and amortization costs.

This resulted in an operating income of $347.8 million, which is a decrease of 37.7% from the previous year. Furthermore, interest expenses rose to $288.7 million, reflecting a 24.8% increase compared with the year prior.

Eversource’s performance varied across its different segments. The Electric Transmission segment reported earnings of $184 million, up 10.2% year over year, driven by substantial investments in its transmission system. The Electric Distribution segment saw earnings of $110.4 million, up 6.5%, bolstered by revenue increases from base distribution rate hikes in Massachusetts and New Hampshire.

The Natural Gas Distribution segment reported a substantial increase, with earnings rising from $76.5 million to $103.4 million compared to the prior year, while the Water Distribution segment showcased earnings of $7.5 million, up 31.6%. In contrast, the Eversource Parent & Other Companies segment experienced a loss of $34.5 million, wider than the $19.4 million loss from last year, primarily due to increased interest expenses.

Looking ahead, Eversource projects 2025 earnings in the range of $4.67 to $4.82 per share, with the Zacks Consensus Estimate sitting at $4.77 per share, which exceeds the midpoint of the company’s guidance. The company anticipates a long-term growth rate for earnings per share (EPS) of between 5% and 7% through 2029, using $4.57 (in 2024) as a base.

Capital investments are estimated to total nearly $24.2 billion through 2025-2029. Currently, Eversource holds a Zacks Rank of #3 (Hold).

As other firms prepare for earnings reports, IDACORP (IDA) is set to announce its fourth-quarter results on February 20, with a Zacks Consensus Estimate of 63 cents per share, suggesting a 3.3% increase year over year. Alliant Energy (LNT) will also report on February 20, with expectations of earning 68 cents per share. Meanwhile, Pinnacle West Capital Corporation (PNW) will announce its results on February 25, with a forecasted loss of 15 cents per share.

Despite the market performance challenges, Eversource’s shares have been affected by a recent $524 million after-tax loss from the sale of its offshore wind business, which overshadowed otherwise strong earnings. Investors reacted negatively to the company’s revised adjusted EPS forecast for 2024, predicting a range of $4.52 to $4.60.

According to analysts, Eversource’s earnings history has been mixed, beating or meeting consensus estimates in three of the last four quarters. Among the 20 analysts covering the stock, the consensus rating is a “Moderate Buy,” reflecting a spectrum of views including nine “Strong Buy” ratings and nine “Holds.”

On January 28, Jefferies Financial Group lowered Eversource’s price target from $52 to $47, while maintaining an “Underperform” rating due to concerns over the sustainability of the data center boom amidst selloffs in power and utility sectors.

The average price target for Eversource is $69.38, indicating a potential upside of 16.8% from the current price. The highest street target of $87 suggests a potential premium of 46.4%.