Eversource Energy’s Earnings Call Highlights Growth and Challenges

Eversource Energy ((ES)) has held its Q1 earnings call. Read on for the main highlights of the call.

Eversource Energy’s recent earnings call conveyed a generally positive sentiment, underscored by strong growth in its transmission and distribution sectors, and the reaffirmation of its financial guidance. While the company is making significant strides in key projects, it faces challenges such as potential tariff impacts and regulatory uncertainties. Despite these hurdles, the overall tone of the call leaned towards optimism, reflecting confidence in the company’s strategic direction and growth prospects.

Strong Growth in Transmission and Distribution

Eversource Energy reported robust growth in its transmission and distribution businesses, which has bolstered confidence in its financial outlook. The company reaffirmed its 2025 EPS guidance and projected a long-term EPS growth rate of 5% to 7% through 2029. Additionally, Eversource anticipates an 8% rate-based growth over the next five years, highlighting a solid foundation for future expansion.

Progress on Key Projects

The company is making significant progress on its Advanced Metering Infrastructure (AMI) project in Massachusetts, with the communication network 40% complete and on track for a July completion. Furthermore, the acquisition of the Mystic Site presents promising opportunities for multi-use interconnections, indicating strategic advancements in Eversource’s project portfolio.

Regulatory and Customer Initiatives

Eversource is actively addressing regulatory and customer concerns by reducing winter rates for gas customers in Massachusetts by approximately 10%. The company is also focused on long-term solutions for rate stabilization and affordability, alongside enhancements to its digital customer experience, demonstrating a commitment to customer satisfaction and regulatory compliance.

Financial Performance and Guidance

Eversource’s first-quarter earnings were $1.50 per share, slightly up from $1.49 per share the previous year, driven by higher utility earnings. The company reaffirmed its 2025 earnings guidance and long-term EPS growth rate, showcasing a stable financial performance.

Impact of Tariffs and Supply Chain Challenges

Potential tariffs and supply chain disruptions pose a risk, potentially increasing capital project costs by 3% to 6%. However, Eversource has a history of mitigating such challenges by diversifying its supply chain, reflecting its resilience and adaptability in the face of external pressures.

Regulatory Uncertainties

Eversource is navigating ongoing regulatory uncertainties, particularly concerning the composition of the Public Utilities Regulatory Authority (PURA) in Connecticut. The timing of potential performance-based rate-making impacts remains unclear, adding a layer of complexity to the regulatory landscape.

Increased Parent Losses

The company reported increased parent losses by $0.12 per share in 2025, attributed to higher interest expenses and the absence of capitalized interest from its former offshore wind investment. This highlights the financial challenges Eversource faces at the parent company level.

Forward-Looking Guidance

Eversource Energy’s management provided a comprehensive forward-looking guidance, reaffirming its 2025 EPS guidance and maintaining a long-term EPS growth rate of 5% to 7% through 2029. The company plans an 8% growth in rate base over the next five years, with a strategic emphasis on increased distribution spending in Massachusetts. Eversource outlined a $24.2 billion five-year capital plan, with significant investments in transmission infrastructure. The company expects its FFO to debt ratios to improve significantly, aiming for a cushion above rating agency downgrade thresholds, supported by a focus on customer innovation, affordability, and sustainability.

In conclusion, Eversource Energy’s earnings call reflected a positive outlook, driven by strong growth in transmission and distribution, progress on key projects, and strategic financial planning. While challenges such as tariffs and regulatory uncertainties persist, the company’s reaffirmation of its financial guidance and commitment to customer-focused initiatives underscore its confidence in achieving sustained growth.