Fortis (NYSE:FTS) Posts Quarterly Earnings Results, Beats Estimates By $0.01 EPS

Key Points

• Fortis beat quarterly earnings estimates: The company reported EPS of $0.56 versus the $0.55 consensus, although revenue of $1.67 billion fell short of analysts’ $1.83 billion expectation.
• Growth outlook remains intact: Fortis reaffirmed its target for roughly 7% annual rate-base growth through 2030 and plans CAD 5.6 billion in 2026 capital spending. British Columbia’s approval of the Tilbury LNG expansion could add approximately CAD 2 billion to the regulated rate base, subject to further approvals.
• Income appeal continues: Fortis declared a $0.64 quarterly dividend, equal to a 4.5% indicated yield, while analysts maintain a consensus “Hold” rating with an average price target of $61.

Fortis (NYSE:FTS - Get Free Report) announced its quarterly earnings data on Friday. The utilities provider reported $0.56 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.55 by $0.01, Zacks reports. Fortis had a return on equity of 7.25% and a net margin of 14.21%.The firm had revenue of $1.67 billion during the quarter, compared to analysts' expectations of $1.83 billion. During the same period last year, the business posted $0.76 earnings per share.

Here are the key takeaways from Fortis' conference call:

• Second-quarter EPS rose to CAD 0.78, up CAD 0.02 year over year, supported by rate-base growth at ITC and higher retail electricity sales at UNS. Fortis invested CAD 2.7 billion in the first half and remains on track for CAD 5.6 billion of 2026 capital spending.
• Fortis maintained its outlook for 7% average annual rate-base growth through 2030 and 4%-6% annual dividend growth, backed by its regulated utility portfolio and 52-year record of consecutive dividend increases.
• British Columbia approved a larger Tilbury LNG Phase 1B expansion, potentially adding approximately CAD 2 billion to regulated rate base versus CAD 350 million currently included in the plan. Construction could begin in 2027, although further permitting and regulatory approvals remain necessary.
• Fortis highlighted substantial additional growth opportunities, including up to USD 3.3 billion-$3.8 billion of ITC transmission investment beyond 2030 and potential USD 1.5 billion-$2 billion of new generation investment at TEP to serve expanding data-center demand. Management said customer agreements are structured to prevent cost shifting and could provide rate benefits to other customers.
• The TEP rate case decision was delayed until November 17, with implementation expected in December; management remains optimistic about recovery of its requested return on equity and formula-rate mechanisms. Fortis also noted that funding the expanded capital plan will require a review of all financing options while preserving investment-grade credit metrics.

Fortis Price Performance

Shares of NYSE:FTS traded down $0.54 during midday trading on Friday, hitting $56.93. 941,706 shares of the stock were exchanged, compared to its average volume of 724,343. Fortis has a twelve month low of $48.64 and a twelve month high of $59.40. The company has a current ratio of 0.49, a quick ratio of 0.41 and a debt-to-equity ratio of 1.25. The company has a 50 day moving average price of $57.01 and a 200-day moving average price of $56.19. The stock has a market cap of $29.08 billion, a P/E ratio of 23.14 and a beta of 0.43.

Fortis Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Tuesday, September 1st. Shareholders of record on Wednesday, August 19th will be issued a $0.64 dividend. The ex-dividend date of this dividend is Wednesday, August 19th. This represents a $2.56 annualized dividend and a yield of 4.5%. Fortis's dividend payout ratio is 76.83%.

Wall Street Analyst Weigh In

FTS has been the topic of several research analyst reports. Wall Street Zen lowered Fortis from a "hold" rating to a "sell" rating in a report on Saturday, May 23rd. Canadian Imperial Bank of Commerce lowered shares of Fortis from an "outperform" rating to a "hold" rating in a research report on Friday, July 17th. BMO Capital Markets restated a "market perform" rating on shares of Fortis in a report on Thursday, May 7th. TD Securities reissued a "buy" rating on shares of Fortis in a research report on Thursday, May 7th. Finally, Barclays cut their target price on Fortis from $62.00 to $61.00 and set an "overweight" rating for the company in a research note on Friday, May 8th. Five equities research analysts have rated the stock with a Buy rating and six have issued a Hold rating to the company's stock. According to MarketBeat, Fortis has a consensus rating of "Hold" and an average price target of $61.00.

Trending Headlines about Fortis

Here are the key news stories impacting Fortis this week:

• Positive Sentiment: Earnings beat estimates: Fortis reported quarterly EPS of $0.78, up from $0.76 a year earlier and well above the consensus estimate of $0.56 in the company’s earnings release. A separate Zacks report cited adjusted EPS of $0.56 versus a $0.55 consensus, indicating the precise figure varies by accounting measure, but both measures reflected an earnings beat. Fortis earnings conference call
• Positive Sentiment: Tilbury LNG expansion approved: British Columbia approval of FortisBC’s Tilbury LNG expansion improves the outlook for a major infrastructure and growth project, potentially supporting long-term rate-base expansion and utility earnings. Fortis Q2 earnings and Tilbury LNG approval
• Positive Sentiment: Dividend maintained: Fortis declared a quarterly dividend of $0.64 per share, payable September 1 to shareholders of record August 19. The annualized payout implies an approximately 4.5% yield, reinforcing the stock’s appeal to income-focused investors. Fortis third-quarter dividend announcement
• Neutral Sentiment: Profitability remains steady: Fortis reported a 7.25% return on equity and a 14.21% net margin. These metrics support financial stability but do not indicate a material change in operating profitability.
• Negative Sentiment: Leverage and liquidity remain considerations: Fortis has a debt-to-equity ratio of 1.25, a current ratio of 0.49 and a quick ratio of 0.41. Elevated leverage and limited near-term liquidity could weigh on valuation, particularly if interest rates remain high or project costs increase.

Institutional Inflows and Outflows

Several institutional investors have recently added to or reduced their stakes in FTS. Public Sector Pension Investment Board increased its position in shares of Fortis by 0.6% during the 2nd quarter. Public Sector Pension Investment Board now owns 48,548 shares of the utilities provider's stock valued at $2,313,000 after purchasing an additional 300 shares during the period. Wellington Management Group LLP lifted its holdings in shares of Fortis by 0.8% in the fourth quarter. Wellington Management Group LLP now owns 37,822 shares of the utilities provider's stock valued at $1,969,000 after purchasing an additional 316 shares in the last quarter. Royal London Asset Management Ltd. boosted its position in Fortis by 0.9% during the 2nd quarter. Royal London Asset Management Ltd. now owns 34,938 shares of the utilities provider's stock worth $1,668,000 after acquiring an additional 325 shares during the period. Parallel Advisors LLC increased its stake in Fortis by 17.2% in the 4th quarter. Parallel Advisors LLC now owns 2,499 shares of the utilities provider's stock valued at $130,000 after buying an additional 366 shares during the period. Finally, Larson Financial Group LLC raised its holdings in shares of Fortis by 123.9% during the third quarter. Larson Financial Group LLC now owns 739 shares of the utilities provider's stock worth $37,000 after acquiring an additional 409 shares in the last quarter. Institutional investors and hedge funds own 57.77% of the company's stock.

Fortis Company Profile

Fortis Inc is a Canadian diversified electric and gas utility holding company headquartered in St. John's, Newfoundland and Labrador. Through a portfolio of regulated utility subsidiaries, the company develops, owns and operates electricity and natural gas transmission, distribution and generation assets. Fortis serves customers across multiple jurisdictions in Canada, the United States and the Caribbean, focusing on the delivery of safe, reliable energy to residential, commercial and industrial users.

The company's core activities include operation and maintenance of transmission and distribution networks, ownership of generation facilities, and investment in grid modernization and system resilience.

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