Fortis Q1 2025 slides: EPS rises 7.5% as capital plan execution continues

Fortis Inc. (NYSE:FTS) reported first quarter 2025 earnings per share of $1.00, representing a 7.5% increase from $0.93 in the same period last year, according to the company’s Q1 2025 earnings presentation delivered on May 7, 2025. The North American utility company highlighted continued execution of its capital plan with $1.4 billion in expenditures during the quarter.

Quarterly Performance Highlights

Fortis delivered a solid first quarter with earnings rising to $499 million, up from $459 million in Q1 2024. The $0.07 EPS improvement was driven by contributions across multiple business segments, with particularly strong performance from U.S. Electric & Gas operations.

"We’ve started 2025 with strong execution across our business," said David Hutchens, President and CEO of Fortis Inc (TSX:FTS)., during the presentation. "Our focus on delivering safe and reliable service while advancing our capital investments has translated into solid financial results."

The company also highlighted a constructive regulatory outcome in British Columbia as a key achievement for the quarter.

As shown in the following chart of quarterly earnings and EPS performance:

A detailed breakdown of the EPS drivers reveals that U.S. Electric & Gas, U.S. Transmission ( ITC (NSE:ITC)), Western Canadian Electric & Gas, and Other Electric segments all contributed positively to the year-over-year growth, partially offset by the impact of weighted average shares:

The segment-by-segment analysis shows growth across most of Fortis’ business units:

Capital Plan & Growth Strategy

Fortis reaffirmed its $26 billion five-year capital plan for 2025-2029, with the company on track to meet its $5.2 billion annual capital expenditure target for 2025. The plan is expected to drive a 6.5% compound annual growth rate (CAGR) in the company’s rate base, which is projected to increase from $39 billion in 2024 to $53 billion by 2029.

The capital plan includes a balanced mix of investments, with 23% allocated to major capital projects (individually costing $200 million or more) and 77% to smaller projects. Virtually all investments are in regulated businesses, reinforcing the company’s low-risk profile.

The following slide illustrates the company’s capital plan and rate base growth trajectory:

Major capital projects include the MISO Long-Range Transmission Plan (LRTP) at ITC, generation investments at UNS Energy related to its Integrated Resource Plan, and the Eagle Mountain Pipeline Project at FortisBC:

Beyond the current capital plan, Fortis identified several opportunities for additional growth, including:

• ITC MISO LRTP Tranche 2.1 (~US$3.7-$4.2B)
• UNS Energy retail load growth and transmission investments (~US$2.5-$5.0B through 2038)
• FortisBC Tilbury LNG expansion and renewable gases initiatives
• Central Hudson (NYSE:HUD) transmission investments

Dividend Growth & Shareholder Returns

Fortis highlighted its impressive track record of 51 consecutive years of dividend increases, a testament to the company’s financial stability and commitment to shareholder returns. Looking ahead, management reaffirmed its annual dividend growth guidance of 4-6% through 2029, supported by the company’s long-term growth strategy and predictable earnings from regulated utilities.

The following chart illustrates Fortis’ dividend growth history:

Financial Position & Funding

During Q1 2025, Fortis raised over $1 billion in long-term debt, including $600 million in 7-year notes at 4.09% and US$300 million in 30-year notes at 5.90%. The company maintains strong investment-grade credit ratings from major agencies, with Moody’s rating Fortis at Baa3 (Stable), S&P Global at A- (Negative), and DBRS at A (low) (Stable).

The $26 billion capital plan for 2025-2029 is expected to be funded primarily through cash from operations (59%), with net debt (30%) and equity (11%) making up the remainder:

Regulatory Updates

Fortis reported several important regulatory developments across its business units:

For FortisBC, the company received a decision on its 2025-2027 rate framework, which included updates to depreciation rates and continuation of the innovation fund.

Tucson Electric Power (TEP) is preparing to file a general rate application this summer, which will include annual formulaic rate adjustment mechanisms.

Central Hudson filed a general rate application in August 2024, requesting an allowed return on equity (ROE) of 10%.

Investment Thesis

Fortis continues to position itself as a low-risk utility with sustainable growth prospects. The company’s investment thesis centers on strong rate base growth, a robust transmission investment pipeline, transparent funding, and a commitment to the clean energy transition.

The following slide summarizes the key reasons to invest in Fortis:

Forward-Looking Statements

Looking ahead, Fortis remains focused on executing its capital plan and exploring additional growth opportunities. The company’s rate base is expected to grow at a 6.5% CAGR through 2029, supporting continued dividend growth of 4-6% annually.

Management expressed confidence in the company’s ability to navigate regulatory environments across its diverse geographic footprint and capitalize on opportunities related to the clean energy transition.

Fortis shares closed at $49.04 on May 6, 2025, near its 52-week high of $49.65, and were trading slightly higher in pre-market activity on the day of the earnings presentation.

Full presentation:

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