WTRG Q2 Earnings Meet Estimates, Revenues Beat on Water Growth

Total Revenues

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%.

WTRG Segment Details

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.

WTRG’s Operational Highlights

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.

WTRG Expands Capital and Rate Base Support

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 Plans

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.

Essential Maintains Growth and Merger Outlook

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.

WTRG’s Zacks Rank

Essential currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Recent Releases

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.

Upcoming Release

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%.

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