Eversource's Q4 Earnings Miss, Offshore Wind Business Exit, Eyes Water Distribution Business Sale & More

Eversource Energy ES shares are trading higher after the company reported fourth-quarter FY23 revenue of $2.69 billion, missing the consensus of $3.24 billion.

Adjusted earnings rose to $333.5 million from $322.3 million a year ago. Adjusted EPS of $0.95 missed the consensus of $0.97. 

Electric Transmission segment earnings rose to $167.0 million from $140.7 million a year ago, led by higher investment in electric transmission systems.

Electric Distribution segment earnings increased to $103.7 million from $97.9 million the prior year, aided by higher revenues from investments in the distribution system and a base distribution rate increase for Massachusetts electric business.

On the other hand, Natural Gas Distribution segment earnings fell to $76.5 million from $87.1 million the prior year, owing to higher depreciation, interest expense, and increased tax rate.

Also, the Water segment posted earnings of $5.7 million vs. $7.4 million a year ago.

FY24 Outlook: Eversource expects the adjusted EPS of $4.50-$4.67 vs. consensus of $4.49. 

The company expects its long-term compound annual EPS growth rate from its regulated businesses to be 5%-7% through 2028 vs. $4.34 in 2023.

Offshore Wind Business Exit: The company disclosed a deal to sell its 50% ownership share in South Fork Wind and Revolution Wind to Global Infrastructure Partners (GIP).

The divestiture will help the company realize cash proceeds of about $1.1 billion upon closure and exit these projects while retaining certain cost-sharing obligations for the construction of Revolution Wind.

Eversource expects the transaction to close in mid-2024 and plans to use the proceeds from the sale to repay the parent company’s debt.

Bayo Ogunlesi, Global Infrastructure Partners’ Chairman and Chief Executive Officer, said, “We are pleased to announce our acquisition of a 50% stake in two significant offshore wind projects from Eversource. This acquisition marks our fourth strategic joint venture with Ørsted, further solidifying our strong partnership with leading industry players. The South Fork Wind and Revolution Wind projects benefit from long-term offtake agreements and play a pivotal role in addressing the increasing demand for clean electricity.”

Water Business Sale: Eversource is looking for a possible sale of the water business to reduce equity needs and improve regulatory diversity.

Price Action: ES shares are trading higher by 1.10% at $55.10 premarket on the last check Wednesday.