ES — Eversource Energy

Eversource Energy Q2 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Recurring Earnings Per Share (EPS): $0.87, consistent with expectations but down from $0.96 in Q2 2025.
• GAAP Earnings: Reported at $0.14 per share, impacted by a noncash after-tax charge of $111.4 million related to the sale of Aquarion Water Company and an additional $164 million charge for offshore wind project liabilities.
• Long-term EPS Growth Guidance: Reaffirmed at 5% to 7%.
• Financial Metrics: FFO to debt ratios were 14.3% (overall) and 15.7% (S&P and Moody's), both exceeding downgrade thresholds.

2. Strategic Updates and Business Highlights

• Sale of Aquarion: Completed, generating net proceeds of $1.7 billion, allowing Eversource to focus on core electric and natural gas operations.
• Revolution Wind Project: Progressing towards completion with an expected in-service date later this year, despite a $164 million charge due to increased costs from stop work orders.
• Regulatory Developments: Received approval for storm cost recovery in Connecticut, allowing for a securitization process to recover approximately $670 million.
• Transmission Investments: Selected for a $2.2 billion transmission project to enhance capacity between Maine and New Hampshire, with Eversource's share estimated at $700 million.

3. Forward Guidance and Outlook

• EPS Guidance for 2026: Non-GAAP EPS guidance maintained at $4.52 to $4.72, reflecting adjustments for the lower base ROE rate.
• Five-Year Capital Plan: Affirmed at $21.5 billion, with potential increases from new transmission projects and AMI investments.
• Growth Trajectory: Anticipated to trend towards the upper half of the long-term EPS growth target by 2028.

4. Bad News, Challenges, or Points of Concern

• Regulatory Challenges: The FERC ROE decision has led to a base transmission ROE rate reduction, impacting earnings and creating uncertainty around future returns.
• Storm Cost Recovery: Denial of carrying charges in the storm cost decision was disappointing, and the company is evaluating next steps regarding this aspect.
• Increased Costs: The Revolution Wind project has incurred additional costs, raising concerns about future profitability and project completion timelines.

5. Notable Q&A Insights

• Storm Cost Securitization: Management expressed optimism about moving forward with securitization despite some deferred costs and denied carrying charges.
• Rate Case Confidence: Eversource's leadership is confident in their rate case filing, emphasizing the necessity of capital investments for reliability and safety.
• Future Regulatory Environment: The leadership noted that the current regulatory body in Connecticut is engaged and responsive, which they believe will lead to fair outcomes in their rate requests.
• Offshore Wind Project Completion: The project is reportedly over 95% complete, with management expressing confidence in meeting the in-service date without further significant cost overruns.

Overall, Eversource Energy demonstrated solid operational performance and strategic focus, despite facing regulatory challenges and increased project costs. The company remains committed to its growth targets and infrastructure investments, positioning itself for future success in the evolving energy landscape.