Eversource Energy Q2 Earnings Call Highlights
Key Points
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- Eversource’s recurring Q2 earnings fell to $0.87 per share from $0.96 a year earlier, primarily due to weaker electric transmission and gas distribution results. The company reaffirmed 2026 adjusted EPS guidance of $4.57–$4.72 and its long-term 5%–7% growth target.
- Eversource completed the $1.7 billion sale of Aquarion Water and plans to use the proceeds to reduce parent-company debt, but reported substantial charges tied to the sale and higher Revolution Wind liabilities. Revolution Wind is about 97% complete and remains on track for commercial operation later this year.
- The company is pursuing significant regulated investment opportunities, including a potential $2.2 billion New England transmission project and a Connecticut rate filing seeking a $451 million revenue increase. Eversource maintained its $26.5 billion five-year capital plan and said it does not expect to issue equity during the remainder of 2026.
Eversource Energy (NYSE:ES) reported second-quarter 2026 GAAP earnings of $0.14 per share, down from $0.96 per share a year earlier, as the company recorded charges tied to the completed sale of Aquarion Water Company and its remaining offshore-wind-related contingent liability.
Excluding those items, recurring earnings were $0.87 per share for the quarter, compared with $0.96 per share in the second quarter of 2025. Chairman, President and Chief Executive Officer Joe Nolan said the result was in line with the company’s expectations. Eversource reaffirmed its 2026 non-GAAP earnings guidance of $4.57 to $4.72 per share and its long-term EPS growth target of 5% to 7%.
Chief Financial Officer John Moreira said the decline in recurring earnings from the prior-year period primarily reflected lower results in electric transmission and gas distribution. Transmission earnings were affected by the Federal Energy Regulatory Commission’s March decision reducing the base return on equity, while gas distribution results faced a comparison with a prior-year benefit related to recoverable expenses. Higher electric distribution revenue partly offset those pressures.
Aquarion Sale and Revolution Wind Charges
Eversource completed the sale of Aquarion on June 30, generating $1.7 billion of net proceeds. Nolan said the transaction advances the company’s strategy to operate as a pure-play regulated electric and natural gas utility, with the proceeds slated to reduce parent-company debt.
The quarter’s GAAP results included a non-cash, after-tax charge of $111.4 million, or $0.30 per share, related to Aquarion’s carrying value at closing. The company also recorded an after-tax charge of $164 million, or $0.43 per share, to increase its estimated offshore wind contingent liability associated with its sale of Revolution Wind.
Nolan said revised Revolution Wind construction-cost estimates included higher costs resulting from two stop-work orders. He said the project is approximately 97% complete, is currently delivering more than 300 megawatts to the ISO New England grid, and remains expected to reach commercial operation later this year. Nolan said the stop-work orders caused the project to lose a vessel that had to be remobilized, but he expressed confidence that the remaining installation work is straightforward.
Transmission Opportunity and FERC Proceedings
ISO New England has preliminarily selected a joint Eversource and Avangrid proposal as its preferred solution in a longer-term transmission planning process. The approximately $2.2 billion project would expand capacity between Maine and New Hampshire and strengthen transmission between northern and southern New England. Eversource’s share is expected to be about $700 million, with an anticipated in-service date of 2032.
Nolan said stakeholder comments are expected Aug. 14, followed by ISO New England’s review and a potential final recommendation in September. Moreira said roughly half of Eversource’s anticipated $700 million share could fall within the company’s current five-year capital forecast through 2030 if the project moves forward.
The company continues to challenge FERC’s March decision that reduced the base transmission return on equity and ordered refunds extending back more than a decade. Moreira said FERC approved an extension delaying refunds until mid-2027, while Eversource has also petitioned the U.S. Court of Appeals for the D.C. Circuit for review and sought a stay.
Eversource has separately filed for a prospective transmission ROE of 11.39%, based on FERC’s existing methodology and current market conditions. Briefs in that proceeding are due Aug. 28 and Sept. 28, and the company expects a new rate to take effect Nov. 30. Its current earnings outlook assumes a 9.57% base transmission ROE.
Connecticut Rates and Storm-Cost Recovery
Eversource’s Connecticut Light Power unit filed its first general rate request since 2017 on July 14. The filing seeks to address a $451 million revenue deficiency and proposes a 10.25% ROE. The proposed increase would raise total customer bills by about 11%, according to Moreira.
About 90% of the requested deficiency is tied to capital investment, storm resiliency, storm restoration costs, depreciation and taxes, while 11% relates to operating and maintenance costs, Moreira said. The filing also includes a proposed multiyear performance-based ratemaking mechanism, economic development and heat-pump rates, and a plan for advanced metering infrastructure.
The AMI proposal includes nearly $1 billion of capital investment and $300 million in operating expense. Moreira said Eversource is seeking an expedited decision this fall and, if approved, could begin mobilizing the Connecticut project next year. He said full implementation would take about five years, with part of the capital spending falling outside the current forecast period.
Connecticut regulators also issued a final storm-cost decision. Of roughly $975 million requested, the Public Utilities Regulatory Authority approved about $870 million, including approximately $200 million already recovered through rates. Eversource expects to securitize about $670 million. PURA deferred approximately $60 million pending a third-party audit and excluded about $40 million, while declining recovery of requested carrying charges.
Moreira said Eversource is evaluating its options regarding the carrying charges. The company expects to submit its financing plan in early fall, receive a final financing decision in the first quarter of next year, and potentially receive securitization proceeds about a year from now.
Capital Plan and Balance Sheet
The company reaffirmed its $26.5 billion five-year capital plan through 2030, while identifying potential additions from the preliminary transmission selection and Connecticut AMI proposal. Eversource said its five-year equity needs remain $800 million to $1.1 billion and that it does not expect to issue equity during the remainder of 2026.
Moreira said Eversource’s March 31 funds-from-operations-to-debt metrics were 14.3% under S’s methodology and 15.7% under Moody’s methodology, each more than 100 basis points above downgrade thresholds. Moody’s recently revised the outlooks for Eversource and NSTAR Electric to stable from negative.
Management said it expects earnings growth to move toward the upper half of its 5% to 7% long-term target range by 2028, supported by regulatory outcomes, storm-cost securitization efforts, the Aquarion sale and planned utility investment.
About Eversource Energy (NYSE:ES)
Eversource Energy (NYSE: ES) is a publicly traded, regulated energy company headquartered in Hartford, Connecticut. The company's core business is the delivery and transmission of electricity and natural gas to residential, commercial and industrial customers across parts of New England. Eversource operates transmission and distribution networks, maintains electrical infrastructure, responds to outages and storms, and manages natural gas pipeline and distribution systems in the regions it serves.
Eversource serves customers primarily in Connecticut, Massachusetts and New Hampshire, operating through locally regulated utility subsidiaries that administer customer service, billing, meter reading and localized operations.
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