10-Q: Eversource Energy Reports Q3 2024 Results; Updates Full-Year Guidance

Eversource Energy reports a net loss for Q3 2024, impacted by losses on offshore wind investments, while updating its full-year non-GAAP earnings guidance.

Summary

• Eversource Energy reported a net loss attributable to common shareholders of $118.1 million, or $0.33 per share, for the third quarter of 2024, compared to a net income of $339.7 million, or $0.97 per share, for the same period in 2023.
• For the first nine months of 2024, the net income attributable to common shareholders was $739.1 million, or $2.08 per share, compared to $846.2 million, or $2.42 per share, for the same period in 2023.
• The 2024 results include an after-tax loss on the sale of offshore wind investments of $524.0 million, or $1.48 per share on a year-to-date basis.
• The 2023 results for the first nine months include an after-tax impairment charge on offshore wind investments of $331.0 million, or $0.95 per share, and after-tax land abandonment and other charges of $6.9 million, or $0.01 per share.
• Excluding these charges, the non-GAAP earnings for Q3 2024 were $405.9 million, or $1.13 per share, and for the first nine months of 2024 were $1.26 billion, or $3.56 per share.
• The company has updated its full-year non-GAAP earnings guidance to a range of $4.52 to $4.60 per share, excluding the impact of the sales of its 50% interests in the three jointly-owned offshore wind projects and related transaction costs.
• Eversource reaffirmed its projection of its long-term EPS growth rate through 2028 within a 5 to 7 percent range.
• The company increased its previously forecasted capital investments from $23.1 billion to $23.7 billion for the period 2024 to 2028, due to the recently approved Electric Sector Modernization Plan (ESMP) in Massachusetts.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to the reported net loss and the loss on the sale of offshore wind investments. However, the reaffirmation of long-term EPS growth and increased capital investments provide some positive signals.

Positives

• Eversource reaffirmed its projection of its long-term EPS growth rate through 2028 within a 5 to 7 percent range.
• The company increased its previously forecasted capital investments from $23.1 billion to $23.7 billion for the period 2024 to 2028, due to the recently approved Electric Sector Modernization Plan (ESMP) in Massachusetts.

Negatives

• Eversource Energy reported a net loss of $118.1 million, or $0.33 per share, for Q3 2024.
• The company's first nine months of 2024 saw a net income of $739.1 million, or $2.08 per share, a decrease compared to the same period in 2023.
• An after-tax loss of $524.0 million was recorded due to the sale of offshore wind investments.

Risks

• The company's results were significantly impacted by losses on offshore wind investments, indicating potential risks in this sector.
• The delay of the commercial operations date of Revolution Wind could impact the final purchase price.

Future Outlook

Eversource expects to earn within a 2024 non-GAAP earnings guidance range of between $4.52 per share and $4.60 per share and reaffirmed its projection of its long-term EPS growth rate through 2028 within a 5 to 7 percent range.

Industry Context

The report reflects a strategic shift in Eversource's focus away from offshore wind development and towards its core regulated utility operations. The sale of offshore wind assets aligns with a broader industry trend of utilities streamlining their portfolios and focusing on core competencies.

Comparison to Industry Standards

• It is difficult to compare Eversource's results directly to industry standards without knowing the specific performance of its peers in the same regions and sectors.
• Companies like NextEra Energy, Duke Energy, and Southern Company are often used as benchmarks for large, diversified utilities in the US.
• However, a more detailed analysis would require comparing specific metrics such as ROE, O&M expenses, and customer growth to these and other relevant peers.

Legal Proceedings

• In September 2024, the parties reached an agreement in principle to settle the Phase V complaint, subject to approval.
• On March 25, 2024, the State of Connecticut Superior Court issued a decision on the appeal which dismissed nine, remanded back to PURA two, and partially remanded one of AWC-CTs twelve claims of error in its appeal.
• On March 28, 2024, AWC-CT filed an appeal of the Connecticut Superior Court decision to the Connecticut Appellate Court and that appeal was subsequently transferred to the Connecticut Supreme Court for review.
• On September 13, 2024, AWC-CT filed an appeal of PURAs July 31, 2024 final decision to the Connecticut Superior Court.

Related Party Transactions

• Yankee Gas, NSTAR Gas and EGMA purchase natural gas transmission services from the Enbridge, Inc. natural gas pipeline project, an equity method investment of Eversource.

Stakeholder Impact

• The results and strategic shifts may impact shareholders, employees, customers, and suppliers.
• Customers may see changes in rates due to regulatory adjustments and infrastructure investments.
• Employees may be affected by the strategic shift away from offshore wind.

Next Steps

• Eversource will continue to assess the potential exposure of the estimated liability for the post-closing adjustment payments and adjust the liability if needed.
• Eversource will continue to manage Sunrise Winds and Revolution Winds onshore construction through completion.
• A decision by the NHPUC on permanent rates is expected by August 1, 2025.

Key Dates

Keywords

Eversource Energy, financial results, offshore wind, net loss, EPS guidance, capital investments, regulatory, electric distribution, electric transmission, natural gas distribution, water distribution