01—Abstract
Summary
Summary of the 8-K filed May 6, 2026. Cited figures are marked; the original filing is the authoritative source.
Eversource Energy (ES) reported first-quarter 2026 GAAP earnings of $606.8 milliona, or $1.61 per share, up from $1.50 per share a year earlier.
Non-GAAP recurring earnings were $650.7 millionb, or $1.73 per share. The GAAP figure absorbs a $43.9 million after-tax (about $0.12 per share) charge tied to FERC's March 19, 2026 decision cutting the New England transmission base ROE from 10.57% to 9.57%, including refunds with interest for prior periods. Growth was led by Natural Gas Distribution (up $76.9 million on base rate increases effective November 1, 2025), with Electric Transmission and Electric Distribution also improving.
Parent and other losses widened, driven by higher interest expense and a higher effective tax rate. The bigger story for investors is the revised 2026 guidance. Following the FERC order and the potential Aquarion sale, non-GAAP recurring EPS guidance was cut to $4.57c-$4.72 from $4.80-$4.95.
Management reaffirmed a 5-7% long-term EPS growth target through 2030, using the $4.65d midpoint as the base, and expects growth in the upper half of that range by 2028. The company has filed a Section 205 request for a replacement ROE of 11.39%, expected to take effect later in 2026 subject to refund, and is pursuing rehearing, a refund extension (through May 2027), and a stay motion at the D.C. Circuit.
The balance sheet and capital plan remain central to the thesis. The company has a $26.5 billion capital plan for 2026-2030, with about $1.0 billion of incremental opportunities, and it targets FFO-to-debt at least 100 basis points above S&P and Moody's downgrade thresholds.
Financing needs are largely met from operating cash flow, with the remainder covered by equity-content hybrids, asset sales, and storm securitization proceeds. Near-term catalysts include the Aquarion sale appeal period, Revolution Wind's second-half 2026 commercial operation date, a Connecticut rate case, and a FERC ROE decision expected in mid-2027.
02—Key points
Key Highlights
- GAAP EPS of $1.61 vs. $1.50 a year ago; non-GAAP recurring EPS of $1.73, reflecting an improvement of about $0.23 per share.
- The FERC ROE refund charge cut GAAP EPS by $0.12, reducing the transmission base ROE from 10.57% to 9.57% with refunds plus interest back to 2011-2012 and from October 2014.
- Natural Gas Distribution earnings rose to $295.3 million from $218.4 million, the largest segment gain, driven by base rate increases effective November 1, 2025.
- 2026 non-GAAP recurring EPS guidance was lowered to $4.57-$4.72 from $4.80-$4.95 to reflect the FERC order and Aquarion sale impacts; long-term 5-7% EPS growth through 2030 was reaffirmed.
- Capital plan of $26.5 billion for 2026-2030 (excluding $1.3 billion for Aquarion), with about $1.0 billion in potential incremental CT AMI investment; FFO-to-debt targeted at 100+ bps above downgrade thresholds.
- Parent and other companies' loss widened to $78.1 million from $59.0 million on higher interest expense and a higher effective tax rate.
- The Annual Meeting approved all nine trustees and the say-on-pay advisory vote, ratified Deloitte as auditor, and rejected the independent board chair shareholder proposal (79.5 million for vs. 220.3 million against).
03—Questions
Frequently Asked Questions
Why did Eversource cut its 2026 earnings guidance?
Management revised 2026 non-GAAP recurring EPS guidance to $4.57-$4.72 from $4.80-$4.95. The cut reflects the FERC decision reducing the New England transmission base ROE by 100 basis points and the expected earnings impact of the potential Aquarion sale, which received PURA approval subject to an appeal period. The company said the revised guidance is consistent with its long-term 5-7% growth target.
How large is the FERC ROE refund exposure, and can it be recovered?
The first-quarter GAAP charge was $43.9 million after tax, or $0.12 per share, covering refunds for the 15-month first complaint period plus interest. The refund period was later extended through May 2027. Eversource has filed a rehearing request, a motion for stay at the D.C. Circuit, and a Section 205 filing proposing an 11.39% ROE, which is expected to take effect later in 2026 subject to refund. The outcome of these actions will determine whether the charge is ultimately reduced or reversed.
Is the dividend safe, and what is the current payout?
The Board approved a quarterly common dividend of $0.7875 per share, payable June 30, 2026, to holders of record on May 18, 2026. Management's financing plan includes dividends as a cash use, and with first-quarter non-GAAP EPS of $1.73, the quarterly payout is covered, though the GAAP payout ratio is higher given the FERC charge.
How will Eversource fund its $26.5 billion capital plan without diluting shareholders heavily?
Most of the financing is expected from cash from operations, which the company projects at $27.8 billion over 2026-2030. Remaining needs are covered by debt and alternative solutions such as equity-content hybrids, the Aquarion sale or a minority interest sale, and storm securitization proceeds. The company has said it prefers these alternatives to common equity issuance, and it issued no new shares through March 2026 under its at-the-market program.
What are the key catalysts investors should watch in 2026 and 2027?
Near-term catalysts include the Aquarion sale appeal period, Revolution Wind's commercial operation date in the second half of 2026, the Connecticut rate case and storm cost resolution around mid-2026, and the Massachusetts rate decision expected at year-end 2026, with earnings impact in 2027. The FERC ROE rehearing and court proceedings are also key, and the New Hampshire securitization proceeds are expected in late 2027 or early 2028.
04—Continue