Eversource Energy Financial Report Analysis: Q4 2024 Insights

Key Financial Highlights

• Total Revenue: $9.01 billion
• Net Income: $811.7 million
• Earnings Per Share (EPS): $2.27
• Total Assets: $32.03 billion
• Long-term Debt: $26.70 billion

Overview

Eversource Energy, identified by SEC CIK number 0000072741, has released its Q4 2024 financial report, showcasing strong performance amidst challenging market conditions. This analysis will delve into the revenue streams, profitability, and outlook for the upcoming year, providing comprehensive insights for investors.

Revenue Breakdown

1. Total Revenues:

• Electric Distribution: $8.97 billion
• Natural Gas Distribution: $2.22 billion
• Electric Transmission: $1.92 billion
• Water Distribution: $232.5 million
• The company noted a total operating revenue of $9.01 billion, reflecting a steady income generation primarily from electric and natural gas services.

2. Customer Segments:

• Residential Sales: $5.05 billion
• Commercial Sales: $2.89 billion
• Industrial Sales: $352.4 million
• Eversource's diverse customer base remains a significant strength, with residential sales constituting the largest revenue portion.

Profitability Analysis

1. Net Income:

• Eversource reported a net income of $811.7 million, a notable recovery from a loss of $(442.2 million) in 2023. This turnaround indicates effective cost management and operational efficiencies.

2. Earnings Per Share (EPS):

• The EPS for 2024 stands at $2.27, a significant improvement from $(1.27) in 2023, reflecting the company's strong recovery and profitability trajectory.

3. Operating Income:

• Total operating income reached $944.1 million, with a strong contribution from electric distribution, showcasing the firm's ability to manage costs effectively while driving revenue growth.

Costs and Expenses

1. Total Operating Expenses:

• The operations and maintenance expenses totaled $(1.31 billion), indicating a critical area for ongoing management to enhance profitability.
• Notable storm costs incurred were $(76.8 million), reflecting external challenges impacting operational expenses.

2. Interest Expenses:

• Interest expenses were reported at $(291.7 million), a significant cost that impacts net income and reflects the company’s leverage strategy.

3. Depreciation and Amortization:

• Total depreciation and amortization costs amounted to $(970.4 million), which is necessary for maintaining the company’s asset base but also a substantial ongoing cost.

Deferred Tax Assets and Liabilities

• Eversource reported total deferred tax assets of $3.28 billion and deferred tax liabilities of $8.13 billion, indicating significant tax considerations that could impact future cash flows and net income.

Cash Flow Management

1. Operating Cash Flows:

• Cash flows provided by operating activities totaled $1.03 billion, reflecting healthy liquidity and operational efficiency.

2. Investment Activities:

• Cash used for capital investments in plant and other assets was recorded at $1.81 billion, showing the company's commitment to growth and infrastructure expansion.

Future Outlook

• Renewable Energy Commitments: Eversource's commitment to renewable energy continues to grow, with significant investments anticipated in the upcoming years.
• Operational Improvements: The company is focused on improving operational efficiency and managing costs effectively to enhance profitability further.

Conclusion

Eversource Energy's Q4 2024 financial performance reflects a strong recovery from the previous year, showcasing robust revenue generation and improved profitability metrics. The strategic focus on electric and natural gas distribution, alongside ongoing investments in renewable energy, positions the company well for future growth. Investors should continue to monitor Eversource's performance in managing operational costs and leveraging its assets effectively as it navigates the evolving energy landscape.

Recommendation

Buy: Given the recovery in earnings and stable revenue streams, Eversource presents a solid investment opportunity for those looking to engage with a utility company committed to sustainability and operational efficiency.