Unitil Q2 2026 Earnings Report

Unitil EPS Results

• Actual EPS: $0.29
• Consensus EPS: $0.26
• Beat/Miss: Beat by +$0.03
• One Year Ago EPS: N/A

Unitil Revenue Results

• Actual Revenue: $113.19 million
• Expected Revenue: $113.19 million
• Beat/Miss: Met Expectations
• YoY Revenue Growth: N/A

Unitil Announcement Details

• Quarter: Q2 2026
• Date: 8/3/2026
• Time: After Market Closes
• Conference Call Date: Tuesday, August 4, 2026
• Conference Call Time: 2:00PM ET

Unitil (NYSE:UTL) (NYSE: UTL) is a regulated public utility holding company that provides electric and natural gas distribution services to customers in New England. Through its operating subsidiaries, the company delivers energy to residential, commercial and industrial customers and maintains the local utility infrastructure needed to support those services.

Unitil Energy Systems provides electric distribution service in southeastern New Hampshire. Fitchburg Gas and Electric Light Company serves customers in north-central Massachusetts with electric and natural gas distribution, while Northern Utilities provides natural gas distribution in parts of New Hampshire and southern Maine.

Headquartered in Hampton, New Hampshire, Unitil traces its history to the consolidation of smaller New England utilities and has operated as a publicly traded utility company since 1984. Its business is primarily conducted in geographically focused service territories under state-regulated utility frameworks.

Unitil Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Strong first-half results: Adjusted EPS rose nearly 7% year over year to $2.17, while management reaffirmed 2026 guidance of $3.20–$3.36 per share and long-term earnings growth of 5%–7%.
• Neutral Sentiment: New Hampshire water acquisition closed: Unitil completed its $55.8 million acquisition of Aquarion Water Company of New Hampshire and Abenaki Water Company, which is expected to be EPS-neutral in 2026 and accretive after new rates take effect.
• Positive Sentiment: Natural gas demand is strengthening: Customer inquiries about gas service increased 50% year over year in the first half, with approximately 1,500 customers under contract or in construction, particularly benefiting growth opportunities in Maine.
• Neutral Sentiment: Regulatory proceedings remain active: Northern Utilities filed for proposed revenue increases of $9.8 million in New Hampshire and $10.4 million in Maine, with New Hampshire permanent rates expected in April 2027.
• Neutral Sentiment: Investment and financing are expanding: Unitil’s five-year capital plan rose 24% to approximately $1.2 billion through 2030, supported by operating cash flow, equity issuance, and a planned $60 million holding-company debt offering.

Presentation

[Operator]

Good day, and thank you for standing by. Welcome to Q2 2026 Unitil Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker, Chris Goulding, Vice President of Finance and Regulatory. Please go ahead.

[Chris Goulding, VP of Finance and Regulatory at Unitil]

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 Hebert, 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 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 will refer to that information during this call. Moving to slide two. Some of the statements made during this call may be forward-looking. These statements are based on management's current expectation and are subject to risk and uncertainty, which may cause the actual results to differ materially from forecasts and projections.

[Chris Goulding, VP of Finance and Regulatory at Unitil]

We undertake no obligation to update or revise any of these statements. Additional information about the various factors that may cause actual results to differ, and our explanation of non-GAAP measures and how they reconcile to GAAP measures is contained within our news release, the slides we posted for this call, and in our most recent Form 10-Q and 10-K. I will now turn the call over to Chairman and CEO, Tom Meissner.

[Tom Meissner, Chairman and CEO at Unitil]

Great. Thanks, Chris. Good afternoon, everyone, and thanks for joining us today. Beginning on slide three, I am pleased to report outstanding performance through the first half of the year, both operationally and financially. Yesterday, we announced another strong quarter with adjusted net income of $5.2 million, or $0.29 per share. For the first half of the year, adjusted net income was $39 million or $2.17 per share, an increase of $0.14 or nearly 7% compared to the first six months of 2025. We are fully earning our authorized returns on a trailing 12-month basis with a GAAP return on equity of 9.6%.

[Tom Meissner, Chairman and CEO at Unitil]

Given the strong results for the first half of the year, we are reaffirming our 2026 earnings guidance of $3.20-$3.36 per share with a midpoint of $3.28. We are also reaffirming our long-term earnings guidance of 5%-7%. We have several positive business updates to share this quarter. As I'll cover in more detail on the following slide, the acquisition of the Aquarion Water Company of New Hampshire and Abenaki Water Company successfully closed on June 30th. We're excited to add these two companies to our portfolio of regulated distribution utilities. Our regulatory agenda remains active, and I'm pleased to report that the two Northern Utilities rate cases in Maine and New Hampshire are progressing as expected. Dan will provide additional details about these rate cases later during the call.

[Tom Meissner, Chairman and CEO at Unitil]

We pride ourselves on consistently delivering high-quality, reliable service to our customers. Recent customer survey results show that our customers continue to be highly satisfied with our service. Overall customer satisfaction remains high at 90%, which is slightly better than last year. Our overall customer satisfaction is the best among Northeast utilities and within the top quartile nationally. I'd also like to provide an update on our advanced metering infrastructure or AMI project that will replace all of our electric meters. This new metering system incorporates state-of-the-art smart meters that can provide near real-time information to customers and enable improved decision-making and grid optimization. The rollout in Massachusetts was completed last year with 31,000 m replaced at a total cost of approximately $10 million, which is currently being recovered in rates.

[Tom Meissner, Chairman and CEO at Unitil]

In New Hampshire, we have already replaced 21,000 m and expect to complete the remaining 59,000 m by the end of 2027. Total costs for this project in New Hampshire are expected to be approximately $30 million, with a portion of that amount included in the company's next step adjustment. We believe this project will help us deliver the advanced functionality and level of service that our customers expect. Turning now to slide four. The acquisition of the two Aquarion New Hampshire water utilities closed on June 30th for a total purchase price of $55.8 million. This includes the assumption of $13.7 million of long-term debt. We purchased these companies at an attractive valuation. This acquisition will strengthen our regulated utility portfolio. We entered into a five-year operating and transition services agreement with the Aquarion Water Authority to ensure a seamless transition and integration.

[Tom Meissner, Chairman and CEO at Unitil]

Similar to the purchase of the two gas companies in Maine last year, we initially financed this transaction with a holding company term loan. We anticipate the transaction will be earnings neutral in 2026 and accretive once new distribution rates take effect. We have also entered into a non-binding letter of intent with Eversource Energy to purchase the Massachusetts Aquarion company, pending satisfaction of certain conditions, including the successful resolution of a base rate case proceeding. We're excited to welcome Aquarion's experienced, locally managed teams to Unitil. We remain committed to delivering the same high-quality service that all of our customers expect. Moving now to slide five. Natural gas continues to enjoy a significant price advantage relative to competing fuels like oil and propane. Fuel oil prices have remained substantially higher than natural gas for an extended period of time.

[Tom Meissner, Chairman and CEO at Unitil]

As I've mentioned before, Maine has the highest percentage of homes heated with fuel oil in the nation. Roughly 2/3 of Maine homes are heated with oil, propane, or kerosene. Fuels that are much more expensive than natural gas. We believe natural gas conversions offer a compelling opportunity for customers to lower their energy costs while also helping states achieve their climate goals. Over the first half of the year, we've seen a 50% increase in customers calling to inquire about natural gas service compared to the same period last year. We currently have about 1,500 new customers under contract or in construction. In addition, we continue to see growth in adjusted margin across all of our natural gas companies compared to 2025. As a reminder, both Maine and New Hampshire have fuel choice statutes that preserve customers' rights to select their preferred energy source, including natural gas.

[Tom Meissner, Chairman and CEO at Unitil]

With that, I'll now pass it over to Dan, who will provide greater detail on our financial results.

[Dan Hurstak, SVP, CFO, and Treasurer at Unitil]

Thank you, Tom. Good afternoon, everyone. I'll begin on slide six. As Tom mentioned, we announced second quarter 2026 adjusted net income of $5.2 million and adjusted earnings per share of $0.29. Through the first six months of the year, adjusted net income was approximately $39 million, or $2.17 per share, representing an increase of $5.9 million in adjusted net income or $0.14 per share compared to the same period in 2025. We are reporting adjusted earnings that exclude transaction costs related to our gas and water acquisitions, which we do not view as indicative of the company's ongoing costs and operations. The results for the first half of the year were supported by the earnings contribution from Bangor Natural Gas and Maine Natural Gas, in addition to higher distribution rates and customer growth, partially offset by higher operating expenses.

[Dan Hurstak, SVP, CFO, and Treasurer at Unitil]

Turning to slide seven, I will discuss our electric and gas adjusted gross margins. I will begin with our electric operations. For the six months ended June 30th, 2026, electric adjusted gross margin was $61.2 million, an increase of $7.9 million, or 14.8% as compared to the same period in 2025. The increase in electric adjusted gross margin was driven by higher rates and customer growth. Higher rates were supported by the permanent rate award for our New Hampshire Electric subsidiary of $13 million, which took effect May 1st, 2026. Electric margin was also supported by performance-based rate adjustments in Fitchburg. As noted during prior calls, all our electric customers are under decoupled rates, which eliminates the dependency of distribution revenue on the volume of electricity sales. Moving to gas operations.

[Dan Hurstak, SVP, CFO, and Treasurer at Unitil]

For the six months ended June 30th, 2026, gas adjusted gross margin was $122.7 million, an increase of $14.6 million, or approximately 13.5% compared to the same period in 2025. The increase in gas adjusted gross margin reflects the contribution from Maine Natural Gas of $8.7 million, higher rates and customer growth of $4.5 million, and colder winter weather of $1.4 million. The company added approximately 6,600 new gas customers compared to the same period in 2025, with the majority of these new customers being attributable to the acquisition of Maine Natural Gas. As of June 30th, 2026, approximately 52% of the company's gas customers were under decoupled rates, with Maine representing our only non-decoupled service area. Moving to slide eight, we provide an earnings bridge comparing the results for the first six months of 2026 to the same period in 2025.

[Dan Hurstak, SVP, CFO, and Treasurer at Unitil]

As I just discussed, the combined adjusted gross margin for our electric and gas divisions increased $22.5 million and reflects the contribution of Maine Natural Gas, higher rates, colder winter weather, and customer growth. Operation and maintenance expenses increased $3.3 million due to higher utility operating costs of $2.6 million and higher labor and other costs of $1.5 million, partially offset by lower acquisition costs of $0.8 million. The increase includes $2.7 million of utility operating costs for Maine Natural Gas. Excluding Maine Natural Gas, operation and maintenance expenses increased $0.6 million, or just above 1% compared to the first half of 2025, which is well below the increase in inflation over the same period.

[Dan Hurstak, SVP, CFO, and Treasurer at Unitil]

The increases in depreciation and amortization expense and taxes other than income taxes primarily reflect higher levels of utility plant in service, as well as the inclusion of expenses associated with Maine Natural Gas in 2026. Moving to slide nine. As Tom noted earlier during the call, our Northern Utilities rate cases are progressing as expected in both New Hampshire and Maine. Starting with New Hampshire, on April 1st, we filed for a permanent rate increase of $9.8 million, and on June 1st, temporary rates of $5.5 million took effect. We have proposed a multi-year rate plan with two-step adjustments to recover all 2026 and 2027 system investments. The rate proposal also includes the continuation of revenue decoupling, but similar to our New Hampshire electric company, we have proposed a decoupling methodology change from a revenue-per-customer model to a total authorized revenue target.

[Dan Hurstak, SVP, CFO, and Treasurer at Unitil]

We are currently participating in technical sessions, and intervener testimony is due in November. Settlement conferences are currently scheduled for early 2027, with permanent rates expected to go into effect on April 1st, 2027. Turning to the Northern Utilities Maine division. We filed our rate case on June 1st for a proposed revenue increase of $10.4 million. The Maine revenue requirement is based on a historical test year with adjustments to forecast rate base, revenues, and expenses through the rate effective year. This approach is designed to reduce earnings attrition and is consistent with the revenue requirement approved in the company's previous Maine rate case. We are currently participating in technical conferences, and intervener testimony is expected by the end of this month. We look forward to working with all stakeholders in these rate proceedings, and we'll provide additional updates on future calls. Turning to slide 10.

[Dan Hurstak, SVP, CFO, and Treasurer at Unitil]

Our current five-year capital investment plan through 2030 totals approximately $1.2 billion, which is an increase of 24% over the previous five-year plan. This plan includes approximately $65 million in total for Bangor Natural Gas and Maine Natural Gas, and approximately $33 million for the New Hampshire water companies. Rate base has increased by $200 million, or 14.9%, compared to the same period in 2025, partly due to the additions of Maine Natural Gas and the New Hampshire water companies. Over the past five years, rate base growth has averaged 9.5%, which is above our long-term rate base growth rate range of 6.5%-8.5%. Moving to slide 11. We continue to prudently manage our balance sheet by maintaining a balanced mix of common equity and long-term debt to support our investment-grade credit ratings.

[Dan Hurstak, SVP, CFO, and Treasurer at Unitil]

The primary source of funding for our five-year investment plan is cash flow from operations, supplemented by long-term debt and equity. Our financial profile remains strong, and balance sheet strength continues to be a top priority. Our most recent FFO-to-debt metric is adjusted by S&P with 17.2%, squarely in the middle of our long-term target and well above our downgrade thresholds. During the second quarter, we issued approximately $11 million of equity under our ATM program. At the end of the second quarter, we had approximately $37.5 million of available capacity under that program. In June, we priced $60 million of holding company senior notes and expect that transaction to close in September. The proceeds from this issuance will be used to repay existing holding company debt and for general corporate purposes.

[Dan Hurstak, SVP, CFO, and Treasurer at Unitil]

After this debt issuance, holding company debt compared to total debt will continue to be in line with rating agency expectations. I will now turn the call back over to Tom.

[Tom Meissner, Chairman and CEO at Unitil]

Thank you, Dan. Ending on slide 13. The company's strong results through the first six months of the year reflects disciplined execution of our operating and strategic priorities and our long-standing commitment to delivering safe, reliable, and affordable service to our customers. The addition of the New Hampshire water companies marks another important milestone, expanding our regulated utility portfolio while remaining firmly focused on our existing states and jurisdictions. As we continue to grow, we remain committed to strategic execution of our plan and the delivery of exceptional value to our customers and stakeholders. With that, I'll pass the call back to Chris.

[Chris Goulding, VP of Finance and Regulatory at Unitil]

Thanks, Tom. That wraps up the prepared material for this call. Thank you for attending. I will now turn the call over to the operator, who will coordinate questions.

[Operator]

Thank you, sir. As a reminder, to ask a question, you will need to press star one one on your telephone. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. I show our first question comes from the line of Andrew Weisel from Scotiabank. Please go ahead.

[Andrew Weisel, Analyst at Scotiabank]

Hey, good afternoon, everyone.

[Tom Meissner, Chairman and CEO at Unitil]

Good afternoon.

[Andrew Weisel, Analyst at Scotiabank]

My first question on Aquarion, you've talked about it being neutral to EPS, at least in the near term, pending help from rate cases. I believe that comment was mostly on the assumption that you'd get both New Hampshire and Massachusetts, but so far only New Hampshire has closed. Does that affect the earnings accretion outlook? Obviously, it's smaller, but does that help or hurt? Am I right that the increased CapEx outlook is to reflect spending at Aquarion in New Hampshire? Any thoughts on the outlook for that business?

[Dan Hurstak, SVP, CFO, and Treasurer at Unitil]

Andrew, you're correct. The amount of incremental CapEx that we referenced in the slides only relates to the New Hampshire Aquarion companies. Just based on the New Hampshire Aquarion companies' results for the rest of the year, we would expect the earnings contribution from those companies to be neutral to consolidated EPS. That would be after we consider the effects of financing the transaction.

[Andrew Weisel, Analyst at Scotiabank]

Okay, great. How are things looking in Massachusetts? Any updates on where we stand, next steps, and maybe thoughts on your level of confidence?

[Dan Hurstak, SVP, CFO, and Treasurer at Unitil]

I think the next steps are, we understand Eversource Energy will file a rate case to address the two conditions in the previous approval order from the department that were unacceptable to the parties. One being a stay-out, which would obviously be addressed by the filing of a rate case. The second would be dealing with the gain on the sale of the Hingham assets as part of that proceeding.

[Andrew Weisel, Analyst at Scotiabank]

Okay. Looking forward, this has been a pretty drawn-out regulatory process. Does this change at all your risk appetite for additional acquisitions?

[Tom Meissner, Chairman and CEO at Unitil]

This is Tom. I would say no. We're still interested in further expansion of our footprint to the extent that it fits within our existing business model.

[Andrew Weisel, Analyst at Scotiabank]

Okay, very good. One more if I could. Switching gears to natural gas conversions. Obviously, as you show in the slides there, oil prices have been staying at these higher levels probably longer than I might have expected and maybe some others. You mentioned a big increase in customer inbounds. How is that changing the conversations maybe with regulators? Obviously, you've had the political support, like you mentioned. Are you maybe at a point where you might start to think of this as more of a structural change and maybe more sustainable higher levels of earnings and growth that you might build into your budgets?

[Tom Meissner, Chairman and CEO at Unitil]

Well, I guess I'll start by saying, I think the price advantage we have relative to other fuels, I think that's going to stay. It's going to be sustained over the long term, even if it narrows somewhat. Therefore, we do think that natural gas provides a tremendous opportunity to address affordability, especially in Maine, where there's the greatest opportunity due to penetration of alternative fuels. I think that's already generally recognized with our regulators. From our standpoint, we see this as an opportunity to continue to expand growth, especially in Maine.

[Andrew Weisel, Analyst at Scotiabank]

Okay, sounds good. Thank you so much.

[Tom Meissner, Chairman and CEO at Unitil]

Thank you.

[Operator]

Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone. To withdraw your question, please press star one one again. I'm showing no further questions in the queue at this time. This concludes our Q&A session and today's conference call. Thank you all for attending. You may all disconnect at this time.

[Tom Meissner, Chairman and CEO at Unitil]

Thank you.

Participants

Executives

• Chris Goulding, VP of Finance and Regulatory
• Tom Meissner, Chairman and CEO
• Dan Hurstak, SVP, CFO, and Treasurer

Analysts

• Andrew Weisel, Analyst at Scotiabank