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Introduction & Market Context
Eversource Energy (NYSE:ES) reported modest earnings growth in its Q2 2025 financial results, with earnings per share (EPS) increasing to $0.96 from $0.95 in the same quarter last year. The company reaffirmed its full-year EPS guidance of $4.67-$4.82 and maintained its long-term EPS growth target of 5-7% through 2029.
The utility company’s stock has shown resilience in 2025, trading at $73.81 with a 0.38% increase on the day of the earnings release. This represents a significant recovery from its 52-week low of $52.28, though still below the 52-week high of $75.25.
Quarterly Performance Highlights
Eversource’s Q2 2025 results showed improvements across all its business segments. The company highlighted its operational success during challenging weather conditions, including top decile reliability during record-breaking heatwaves and efficient power restoration following a significant storm over the Fourth of July weekend.
The financial breakdown reveals steady growth across all segments. Electric transmission contributed $0.56 per share (up $0.02 from Q2 2024), while electric distribution added $0.44 (up $0.02). Natural gas distribution contributed $0.10 (up $0.02), and water distribution added $0.04 (up $0.02). These gains were partially offset by higher parent company costs of $0.18 (up $0.07 from Q2 2024).
Strategic Initiatives & Capital Plan
Eversource outlined its key strategic priorities centered on a fully regulated business model. The company is focusing on aligning investments with state policies while maintaining customer reliability and affordability. Central to this strategy is a robust five-year capital investment plan totaling $24.2 billion through 2029, with potential for an additional $1.5-$2 billion in incremental investments.
The capital expenditure plan shows a balanced approach across Eversource’s business segments, with significant investments in electric distribution (43%), electric transmission (28%), natural gas distribution (24%), and IT and facilities (5%). This represents a strategic shift from previous allocations, with increased emphasis on transmission investments.
The company is making substantial progress on infrastructure modernization, including:
1. Advanced Metering Infrastructure (AMI) deployment in Massachusetts, with the communication network substantially complete in Western MA and smart meter installation underway
2. Cambridge underground substation construction, with excavation completed to 60 feet below ground and work continuing to reach the final depth of approximately 105 feet
3. Revolution Wind Onshore Substation development, supporting renewable energy integration
Regulatory Updates
Eversource reported significant regulatory progress across its service territories. In New Hampshire, the company received approval for a permanent rate increase of $100 million, effective August 1, 2025. The regulatory decision included a 9.5% return on equity with a 50% equity capital structure, and approval of Performance Based Ratemaking (PBR) with a 4-year term.
In Massachusetts and Connecticut, the company secured several rate adjustments. EGMA will receive rate increases of $77 million in November 2024 and $62 million in November 2025. NSTAR Gas will see a $12 million increase in November 2024, while NSTAR Electric received a $56 million increase effective January 2025. In Connecticut, Yankee Gas has a rate case pending with a final decision expected in October for rates effective November 1, 2025.
Financial Outlook & Balance Sheet Strength
A key focus for Eversource is strengthening its balance sheet and enhancing its funds from operations (FFO) to debt ratio. The company is implementing a comprehensive cash flow enhancement strategy that includes multiple initiatives to improve financial metrics.
The cash flow enhancement drivers include both near-term and long-term elements. For 2024-2025, major contributors include the sale of the water business ($1.6 billion), proceeds from the Orsted sale ($230 million) and GIP sale ($875 million), ATM equity issuances ($1.2 billion), and rate increases ($300-400 million). Beyond 2025, the company will focus on additional rate increases, constructive cost recovery for incremental distribution investments, deferred storm cost recovery, and operational cost discipline.
Eversource projects significant rate base growth from $26.4 billion in 2023 to $41.9 billion by 2029, representing an 8.0% compound annual growth rate (CAGR). This growth will be driven primarily by investments in transmission and electric distribution infrastructure, with Massachusetts increasing its share of the rate base from 30% to 37% by 2029.
Conclusion
Eversource Energy’s Q2 2025 results demonstrate the company’s ability to deliver steady performance while advancing its strategic priorities. With a clear focus on regulated businesses, substantial capital investments, and constructive regulatory outcomes, the company appears well-positioned to achieve its long-term growth targets.
The utility’s emphasis on infrastructure modernization and clean energy transition aligns with broader industry trends, while its financial strategy aims to strengthen the balance sheet and maintain strong credit metrics. For investors, Eversource offers a combination of modest near-term growth with the potential for more substantial returns over the long term, supported by its extensive capital investment program and regulated business model.
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