Essential Utilities (WTRG) Up 5% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for Essential Utilities (WTRG). Shares have added about 5% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Essential Utilities due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

WTRG Q2 Earnings Meet Estimates, Revenues Beat on Water Growth

Essential Utilities Inc. reported second-quarter 2026 adjusted earnings of 38 cents per share, in line with the Zacks Consensus Estimate and reflecting no surprise. 

GAAP earnings were 37 cents per share, down 2.6% from 38 cents a year ago, as merger-related costs weighed on results.

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%.

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 due to 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 for earnings 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.


 

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

At this time, Essential Utilities has a subpar Growth Score of D, a score with the same score on the momentum front. Following the exact same course, the stock has a grade of D on the value side, putting it in the bottom 40% for value investors.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Essential Utilities has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Essential Utilities belongs to the Zacks Utility - Water Supply industry. Another stock from the same industry, California Water Service Group (CWT), has gained 0.8% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.

California Water Service Group reported revenues of $308.6 million in the last reported quarter, representing a year-over-year change of +16.5%. EPS of $0.93 for the same period compares with $0.71 a year ago.

California Water Service Group is expected to post earnings of $1.22 per share for the current quarter, representing a year-over-year change of +18.5%. Over the last 30 days, the Zacks Consensus Estimate has changed -8.7%.

California Water Service Group has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.

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This article originally published on Zacks Investment Research (zacks.com).

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