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In a move aimed at enhancing its financial flexibility, Essential Utilities, Inc. (market capitalization: $10.76 billion) has announced the establishment of a commercial paper program on Wednesday, allowing it to issue short-term unsecured notes up to $1 billion. According to InvestingPro data, the company’s current ratio of 0.5 indicates that short-term obligations exceed liquid assets, making this program particularly strategic for managing working capital needs.
The Pennsylvania-based water supply company detailed in a recent SEC filing that it may issue notes with maturities of up to 364 days under the new program. The proceeds from the sale of these notes are earmarked for general corporate purposes, which include working capital, capital expenditures, potential water and wastewater utility acquisitions, and repaying existing debt. With annual revenue of $2.09 billion and a solid track record of 32 consecutive years of dividend increases, Essential Utilities maintains a strong financial foundation despite its debt management needs.
The commercial paper, which has not been registered under the Securities Act or state securities laws, will be offered or sold under an exemption from the registration requirements, making it available only to certain institutional investors.
Under this program, commercial paper dealers will act as dealers, and a national bank will serve as the issuing and paying agent. The company emphasized that this financial maneuver is not an offer to sell or a solicitation of an offer to buy any notes.
This initiative reflects Essential Utilities’ strategic approach to financial management, as it seeks to maintain liquidity and fund its operations and growth efficiently. The company’s common stock is listed on the New York Stock Exchange under the ticker symbol (NYSE:WTRG).
The information provided in this article is based on the statements from a press release.
In other recent news, Essential Utilities Inc. reported its fourth-quarter 2024 earnings, slightly exceeding analysts’ expectations with an earnings per share (EPS) of $0.67, compared to the projected $0.665. However, the company’s revenue fell short of forecasts, reaching $604.38 million against an expected $609.43 million. Despite the revenue miss, Essential Utilities completed a $1.3 billion capital plan on schedule, underscoring its focus on infrastructure investments. The company also announced a full-year GAAP EPS of $2.17, an increase from $1.86 in 2023, attributed to rate hikes and surcharges.
Looking forward, Essential Utilities has set its 2025 EPS guidance between $2.07 and $2.11, with an anticipated annual EPS growth of 5-7% through 2027. The company plans to invest $7.8 billion in infrastructure over the next five years. In acquisition news, Essential Utilities recently closed the Greenville Wastewater acquisition in Pennsylvania, marking a milestone in its acquisition strategy. Analyst firms have not reported any upgrades or downgrades following these announcements.
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