Eversource Energy Q2 2026 results show adjusted EPS at $0.87, down from $0.96 YoY. A proposed $451M rate increase in Connecticut highlights ongoing regulatory challenges.
Eversource Energy reported Q2 2026 adjusted earnings per share of $0.87, down 9% from $0.96 in the same quarter last year and slightly below the consensus estimate of $0.90. The decline is attributed to lower earnings in the electric transmission and gas distribution segments, alongside significant non-cash charges impacting GAAP earnings.
Key Takeaways
- GAAP earnings fell to $0.14 per share, impacted by a $0.30 charge from the sale of Aquarion Water Co. and a $0.43 charge related to offshore wind liabilities.
- Recurring earnings decreased from $0.96 to $0.87 per share year-over-year, primarily due to reduced revenue from the electric transmission and gas distribution segments.
- Regulatory activities include a proposed $451 million rate increase in Connecticut, marking the first general rate request since 2017.
- Storm cost securitization is advancing, with approximately $670 million expected to be securitized, following a final decision from PURA.
- Long-term EPS guidance remains unchanged at $4.57 to $4.72 per share for 2026, assuming a base ROE rate of 9.57%.
Adjusted Earnings Decline Points to Regulatory Headwinds
Eversource Energy's adjusted earnings per share for Q2 2026 were $0.87, down from $0.96 in Q2 2025. The decline was chiefly due to lower performance in the electric transmission and gas distribution segments, which saw reduced revenues following regulatory changes. The company’s GAAP earnings were notably affected by significant non-cash after-tax charges totaling $275.4 million, impacting the reported figure of $0.14 per share.
| Metric | Q2 2026 | YoY | QoQ |
|---|---|---|---|
| GAAP EPS | $0.14 | -85% | -91% |
| Adjusted EPS | $0.87 | -9% | - |
The decline in recurring earnings reflects lower earnings in the transmission business due to a base ROE rate reduction ordered by FERC in March. This rate cut is a critical factor in Eversource's financial outlook, as it directly impacts the company's capacity to generate revenue from its transmission assets.
Proposed Rate Increase Signals Ongoing Regulatory Challenges
In response to evolving cost structures and regulatory frameworks, Eversource has filed for a $451 million rate increase in Connecticut, the first such filing in nearly a decade. This proposed increase would raise customer bills by approximately 11%, with 90% of the deficiency linked to capital investments and storm restoration costs. Management expressed confidence that their investments in reliability and infrastructure would support the need for this increase, emphasizing their commitment to balancing affordability and reliability for customers.
“Our approach has been to make proactive, strategic investments that address aging infrastructure in a cost-effective manner long before they fail,” stated John Nolan, President and CEO.
Storm Cost Securitization Progresses
A significant update this quarter is the final decision from the Public Utilities Regulatory Authority (PURA) regarding storm costs, approving approximately $870 million of Eversource's requested funding. This approval allows the company to move forward with securitization, with an expected cash inflow of about $670 million anticipated in approximately one year. The company plans to file its financing plan with PURA in the upcoming fall, marking a pivotal step in recovering costs associated with storm restoration efforts.
Long-Term Growth Projections Remain Steady
Despite the challenges faced this quarter, Eversource reaffirmed its long-term earnings growth target of 5% to 7% CAGR through 2028. This guidance assumes the utilization of the 9.57% base ROE rate for future transmission investments. The company remains optimistic about achieving growth toward the upper end of this range, driven by regulatory outcomes, strategic investments, and operational efficiencies.
Frequently Asked Questions
Did Eversource Energy beat earnings estimates in Q2 2026?
No, Eversource Energy reported adjusted earnings per share of $0.87, missing the consensus estimate of $0.90 by $0.03.
What impact did the regulatory environment have on Eversource's earnings?
The regulatory environment significantly impacted Eversource’s earnings, with a base ROE rate reduction from FERC leading to decreased revenues in the electric transmission segment.
When can we expect cash from the storm cost securitization?
Eversource anticipates cash inflow of approximately $670 million from storm cost securitization in about one year, following the filing of its financing plan with PURA this fall.
What is Eversource's long-term EPS guidance for 2026?
Eversource has reaffirmed its non-GAAP EPS guidance range for 2026 at $4.57 to $4.72 per share, factoring in the lower base ROE rate.
In conclusion, Eversource Energy faces considerable regulatory challenges that have impacted its recent earnings, with a focus on balancing affordability and reliability for its customers. The upcoming quarter will be critical in determining how well the company can navigate these issues and maintain its growth trajectory.
This analysis is based on public earnings call materials and is not investment advice.
