Unitil’s Earnings Call: Growth Amid Challenges

Unitil ((UTL)) has held its Q2 earnings call. Read on for the main highlights of the call.

Unitil’s recent earnings call painted a picture of robust financial health, underscored by notable growth in adjusted net income and earnings per share. The company is making headway in regulatory reviews and acquisitions, which are poised to fuel future expansion. Legislative backing for natural gas further bolsters Unitil’s operational outlook. However, the company faces challenges with rising operating and maintenance expenses, increased depreciation, and an anticipated slight net loss in Q3 2025. Overall, the positive developments slightly outweigh the negatives, offering a cautiously optimistic view.

Adjusted Net Income and Earnings Growth

Unitil reported an impressive adjusted net income of $4.7 million and adjusted earnings of $0.29 per share for Q2 2025, marking an increase of $0.4 million or $0.02 per share from Q2 2024. For the first half of 2025, the adjusted net income reached $33.1 million or $2.03 per share, reflecting a $1.6 million or $0.07 per share rise compared to the same period in 2024.

Progress in Regulatory Reviews and Acquisitions

The regulatory review process for the Maine natural gas and Aquarion acquisitions is advancing smoothly, with no objections from the Office of the Public Advocate. These acquisitions are expected to finalize by the end of 2025, potentially accelerating rate base growth to about 10% annually through 2029.

Policy and Legislative Support for Natural Gas

Maine’s recent fuel choice legislation, which safeguards consumer rights to opt for natural gas, is a positive development for Unitil. This aligns with similar legislation passed in New Hampshire in 2021, covering approximately 85% of Unitil’s natural gas customers.

Completion of Utility Scale Solar Project

Unitil has successfully completed its inaugural utility-scale solar project in Kingston, New Hampshire. This significant investment is set to provide long-term benefits to customers and communities.

Advanced Metering Infrastructure Rollout

Unitil’s rollout of its Advanced Metering Infrastructure (AMI) system is on track, with 60% of meters replaced in Massachusetts. The project, involving a $40 million capital investment, is expected to continue into 2026.

Increased Operating and Maintenance Expenses

The company reported a $7.1 million increase in operation and maintenance expenses compared to the previous year, attributed to higher utility operating costs, labor expenses, and professional fees.

Higher Depreciation and Amortization Expense

Depreciation and amortization expenses rose by $7.4 million, driven by increased depreciation rates and the addition of new utility plants in service.

Expected Slight Net Loss in Q3 2025

Despite the overall positive outlook, Unitil anticipates a slight net loss in the third quarter of 2025. However, the company remains confident that full-year earnings will align with their guidance.

Forward-Looking Guidance

Unitil reaffirmed its long-term guidance for earnings growth, dividend growth, and rate base growth, with expectations of approximately 10% annual rate base growth through 2029, fueled by ongoing acquisitions. The company also emphasized its strategic focus on maintaining a strong balance sheet and credit profile, supported by a 5-year capital budget of around $1 billion. Despite a projected slight net loss in Q3, Unitil confirmed its full-year 2025 earnings guidance range of $3.01 to $3.17 per share.

In conclusion, Unitil’s earnings call highlighted a generally positive trajectory, with strong financial performance and strategic initiatives poised to drive future growth. While challenges such as increased expenses and a slight projected net loss in Q3 2025 exist, the company’s robust guidance and legislative support for natural gas paint an optimistic picture for stakeholders.