01—Abstract
Summary
Summary of the 8-K filed November 4, 2024. Cited figures are marked; the original filing is the authoritative source.
Eversource Energy (ES) reported a third-quarter 2024 GAAP net loss of $(118.1) million, or $(0.33) per share, versus earnings of $339.7 milliona ($0.97 per share) a year earlier.
The loss was driven by a $524.0 millionb after-tax charge tied to the sale and complete divestiture of its offshore wind investment. Excluding that charge and other items, non-GAAP recurring earnings were $405.9 million, or $1.13 per share, up from $0.97 in Q3 2023. For the first nine months of 2024, GAAP EPS was $2.08 and non-GAAP recurring EPS was $3.56, compared with $2.42 and $3.38 a year earlier.
The core regulated businesses performed well. Electric transmission, electric distribution, natural gas distribution and water distribution all improved year over year, supported by investment growth and base rate increases at NSTAR Electric and PSNH. Management updated 2024 non-GAAP EPS guidance to $4.52c–$4.60 from $4.50–$4.67, citing higher-than-anticipated interest expense.
It reaffirmed a 5–7% long-term EPS growth rate off a 2023 base of $4.34d. The 2024–2028 capital plan rose to $23.7 billion from $23.1 billion, driven by the Massachusetts Electric Sector Modernization Plan. For investors, the key message is that Eversource has completed its exit from offshore wind and now describes itself as a pure-play regulated utility.
Management is targeting FFO-to-debt of 14–15% by 2025, supported by known cash flow enhancements of about $3.75 billion, including Orsted and GIP sale proceeds and equity issuance. The main risks to watch are rising interest expense, the pace of regulatory decisions in Connecticut and New Hampshire, and balance sheet execution.
02—Key points
Key Highlights
- GAAP Q3 2024 net loss of $(118.1) million, or $(0.33) per share, driven by a $524.0 million after-tax loss on the offshore wind divestiture
- Non-GAAP recurring Q3 2024 EPS of $1.13, up from $0.97 in Q3 2023, with electric distribution and transmission leading growth
- Nine-month non-GAAP recurring EPS of $3.56 versus $3.38 a year earlier; GAAP EPS of $2.08 versus $2.42
- 2024 non-GAAP EPS guidance narrowed to $4.52–$4.60 from $4.50–$4.67, with higher interest expense as the cited pressure
- Five-year capital plan (2024–2028) increased to $23.7 billion from $23.1 billion, including $600 million from Massachusetts ESMP approval
- Long-term EPS growth target of 5–7% reaffirmed; FFO-to-debt target of 14–15% by 2025
- Management says the company is now a 100% regulated utility following the completed exit from offshore wind
03—Questions
Frequently Asked Questions
Why did Eversource report a GAAP loss in Q3 2024?
The loss reflects a $524.0 million after-tax charge tied to the sale and complete divestiture of its offshore wind investment. Excluding this and other non-recurring items, the company earned $1.13 per share in the quarter, up from $0.97 a year earlier.
Did Eversource change its 2024 earnings outlook?
Yes, the company updated its 2024 non-GAAP recurring EPS projection to $4.52–$4.60, from $4.50–$4.67 previously. The change reflects higher-than-anticipated interest expense. The company reaffirmed its 5–7% long-term EPS growth rate.
What is driving the increase in the capital plan?
The 2024–2028 capital plan rose to $23.7 billion from $23.1 billion, mainly due to the Massachusetts Electric Sector Modernization Plan, which was approved by the DPU in August 2024 and adds about $600 million of capital expenditure.
What regulatory decisions are pending?
Key pending items include the Connecticut AMI cost recovery decision, expected November 20, 2024; a New Hampshire prudence review of $232 million in 2022–2023 storm costs, expected in the first half of 2025; and the New Hampshire rate review, with a final decision expected in 2025. An interim $61 million rate increase took effect August 1, 2024.
How does Eversource plan to strengthen its balance sheet?
Management targets FFO-to-debt of 14–15% by 2025, supported by known cash flow enhancements of about $3.75 billion. These include the Orsted and GIP sale proceeds, South Fork Wind tax equity, incremental storm cost recovery, and rate increases. The company also issued about $990 million of new shares through its at-the-market program in 2024 year to date.
04—Continue