Essential Utilities, Inc. (WTRG) · Nov 4, 2026 · Earnings

Essential Utilities earnings beat as merger approvals advance

Beat — Adjusted diluted EPS $0.38 vs ~$0.33-$0.34 published consensus

Essential Utilities’ Q3 earnings beat published estimates, helped by regulatory recoveries and lower operating costs, while merger approvals continue.

Essential Utilities is a regulated water and natural-gas utility investing heavily in infrastructure while working toward its planned American Water combination, still targeted for the first quarter of 2027. The company is on track for $1.7 billion of 2026 infrastructure investment, while the merger has already received approvals in Kentucky, Ohio and Virginia and has reached settlements in Pennsylvania, North Carolina and Texas.

The quarter beat the market’s modest earnings bar. Available published Q3 EPS estimates clustered around $0.33-$0.34, although the estimates are not consistently labeled as GAAP or adjusted; Essential delivered adjusted diluted EPS of $0.38. That makes this a real, but not dramatic, earnings beat rather than merely a favorable presentation. Essential reported GAAP net income of $103.8 million and earnings per share of $0.36 for the third quarter of 2026.

The operating improvement was mostly regulatory and cost-driven, not a sudden change in demand. Revenue rose 6.6%, with regulatory recoveries and purchased-gas costs providing much of the increase, while quarterly operations and maintenance expense fell 0.6%; insurance recoveries and lower bad-debt expense were important contributors. Essential said, “Revenues for the quarter were $508.3million compared to $477.0million in the third quarter of 2025, an increase of 6.6%.” That is healthy execution, but some of the margin help looks less repeatable than pure customer or volume growth.

The broader year-to-date picture remains less clean. Nine-month revenue increased 7.1%, but net income fell to $434.0 million from $483.7 million as merger costs accumulated and interest expense rose. The filing identifies $22.5 million of merger-related expense through the third quarter, so the headline decline overstates the underlying operating deterioration, but it still shows that the transaction is consuming earnings before delivering any combination benefits.

The merger story advanced, but not enough to reset expectations. Essential continues to target a first-quarter 2027 close, with three state approvals and several settlements now in place; that reduces execution uncertainty at the margin, but the timetable and general direction were already known. The release says, “The Company is in the process of obtaining the consents and approvals needed to successfully consummate the proposed merger with American Water.” 〔0〕

Capital investment and rate recovery remain the durable business supports. Essential invested approximately $1.1 billion in the first nine months and expects to invest $1.7 billion during 2026, supported by completed rate awards and a sizable pipeline of pending cases. “Essential invested approximately $1.1billion in the first nine months of 2026 to improve its regulated water and natural gas infrastructure systems and to enhance customer service across its operations.”

Bottom line: This is a modest earnings beat that confirms Essential is executing reasonably well while the American Water merger moves through approvals. It improves the near-term operating read, but the year-to-date profit decline and ongoing transaction costs keep it from materially rewriting the company’s story.

What to watch next

American Water merger approvals and Q1 2027 closing

Original filing on SEC EDGAR

More Essential Utilities, Inc. news

• Essential Utilities files non-unanimous PA merger settlement, leaving final PUC approval
• Essential Utilities reaches non-unanimous merger settlement; PaPUC approval still pending
• Merger paperwork moves forward—but the biggest question remains unanswered