Q2 2026 Unitil Corp Earnings Call Transcript
Key Points
- Adjusted EPS for the first half of 2026 increased by 7% to $2.17 per share, driven by strong operational and financial performance.
- The acquisition of Aquarion Water Company of New Hampshire and Abenaki Water Company closed on June 30, expanding the regulated utility portfolio at an attractive valuation.
- Natural gas conversions are surging, with a 50% increase in customer inquiries and 1,500 new customers under contract, supported by a significant price advantage over oil and propane.
- Electric and gas adjusted gross margins grew by 14.8% and 13.5%, respectively, in the first half of 2026, reflecting higher rates, customer growth, and colder winter weather.
- The company reaffirmed its 2026 earnings guidance of $3.20-$3.36 per share and long-term growth of 5%-7%, with a strong balance sheet and FFO-to-debt ratio of 17.2%.
- The Massachusetts Aquarion acquisition remains pending, subject to regulatory conditions, including a base rate case, which could delay or jeopardize the deal.
- Operation and maintenance expenses increased by $3.3 million in the first half of 2026, driven by higher utility operating costs and labor expenses, partially offset by lower acquisition costs.
- The company faces ongoing regulatory uncertainty with rate cases in New Hampshire and Maine, with permanent rates not expected until 2027, potentially impacting near-term earnings.
- The New Hampshire water acquisition is expected to be earnings neutral in 2026, providing no immediate EPS contribution until new rates are implemented.
- Higher depreciation and amortization expenses, along with increased taxes, reflect higher utility plant in service, which could pressure margins if rate recovery lags.
Good day and thank you for standing by. Welcome to the Q2 2026 Unitil earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your first speaker, Chris Goulden, Vice President of Finance and Regulatory. Please go ahead.
Good afternoon, and thank you for joining us to discuss Unitil Corporation's second quarter 2026 financial results. Speaking on the call today will be Tom Meissner, Chairman and Chief Executive Officer; and Dan Hurstak, Senior Vice President, Chief Financial Officer and Treasurer. Also with us today are Bob Hevert, President and Chief Administrative Officer; and Todd Diggins, Chief Accounting Officer and Controller. We will discuss financial and other information on this call. As we mentioned in the press release announcing today's call, we have posted information, including a presentation, to the investor section of our website at unitil.com. We
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