The analyst inquired if the drawn-out regulatory process for the Massachusetts acquisition changes Unitil's risk appetite for additional acquisitions.

Management stated that the regulatory process does not change their risk appetite, and they remain interested in further expansion of their footprint within their existing business model. “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.”

The analyst asked if the sustained high oil prices and increased customer inquiries for natural gas conversions indicate a structural change that could lead to more sustainable higher levels of earnings and growth.

Management believes the price advantage of natural gas will be sustained long-term, providing a significant opportunity to address affordability, especially in Maine. They see this as an opportunity to continue expanding growth, which is generally recognized by regulators. “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.”

UTL

Unitil (UTL) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Utilities· Aug 4, 2026

Source: earnings call transcript

Executive summary

Unitil Corporation Q2 FY26 — Strong H1 Performance and Strategic Acquisitions

Unitil reported strong financial and operational performance in Q2 FY26, driven by higher rates and customer growth, and reaffirmed its full-year and long-term EPS guidance. The company successfully closed the acquisition of two New Hampshire water utilities and is progressing with rate cases in Maine and New Hampshire, while also seeing increased interest in natural gas conversions.

Highlights

Adjusted net income for H1 FY26 was $39 million, or $2.17 per share, an increase of $0.14 or nearly 7% compared to H1 FY25.
GAAP return on equity was 9.6% on a trailing 12-month basis, fully earning authorized returns.
Acquisition of Aquarian Water Company of New Hampshire and Abenaki Water Company successfully closed for $55.8 million.
Overall customer satisfaction remains high at 90%, ranking best among Northeast utilities and within the top quartile nationally.
Natural gas customer inquiries increased 50% year-over-year, with 1,500 new customers under contract or in construction.

Concerns

Regulatory process for Massachusetts Aquarian acquisition

Guidance & targets

Category	Target	Timeline	Confidence
Adjusted EPS	$3.20 to $3.36 per share high materiality	FY26	High
Long-term EPS growth rate	5% to 7% high materiality	Long-term	High

Orderbook & backlog

New natural gas customers under contract or in construction 1,500 Q2 FY26

Deals & partnerships

Aquarian Water Company of New Hampshire and Abenaki Water Company Acquisition of two regulated distribution water utilities. $55.8 million

Includes assumption of $13.7 million of long-term debt. Initially financed with holding company term loan. Entered into a five-year operating and transition services agreement with Aquarian Water Authority.

Eversource Energy Non-binding letter of intent to purchase the Massachusetts Aquarian Company.

Pending satisfaction of certain conditions, including the successful resolution of a base rate case proceeding.

Capital programs

Five-year capital investment plan underway $1.2 billion

Funding: cash flow from operations supplemented by long-term debt and equity

Benefit:Includes $65 million for Bangor Natural Gas and Maine Natural Gas, and $33 million for New Hampshire Water Companies.

This plan represents an increase of 24% over the previous five-year plan.

Advanced Metering Infrastructure (AMI) project underway $30 million

Spent to date: 21,000 meters replaced

Benefit:59,000 meters remaining to be replaced; state-of-the-art smart meters providing near real-time information and grid optimization.

Portion of the amount included in the company's next step adjustment.

Risks & headwinds

Regulatory process for Massachusetts Aquarian acquisition

Drawn out regulatory process

Mitigation:Eversource Energy is expected to file a rate case to address conditions (stay-out, gain on sale of Hingham assets).

What to watch in Q3 FY26

New Hampshire Northern Utilities rate case progress

early 2027

Current Technical sessions underway, intervener testimony due November 2026, settlement conferences scheduled for early 2027.

Target Progress towards settlement conferences and permanent rates taking effect April 1, 2027.

Why it matters

The outcome of this rate case will significantly impact future revenues and earnings for the New Hampshire electric subsidiary.

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. 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 1, 2027.

Find out whether UTL delivers this. Inve re-checks your case every morning.

Q&A highlights

The analyst asked about the EPS neutrality of the Aquarian acquisition, specifically if the comment assumed both New Hampshire and Massachusetts acquisitions, and how the New Hampshire-only closure affects the outlook. They also inquired about the status and next steps for the Massachusetts Aquarian acquisition.

Management confirmed that the incremental CapEx referenced only relates to the New Hampshire Aquarian Companies and that their earnings contribution is expected to be neutral to consolidated EPS after financing. For Massachusetts, Eversource Energy is expected to file a rate case to address conditions from the previous approval order, including a stay-out and dealing with the gain on sale of Hingham assets.

“Andrew, you're correct. The amount of incremental CapEx that we referenced in the slides only relates to the New Hampshire Aquarium Companies. And just based on the New Hampshire Aquarium Companies results for the rest of the year, we would expect the earnings contribution from those companies to be neutral to consolidated EPS.”

asked by Andrew Weasel from Scotiabank · answered by Unknown Speaker

2 min read 5 chapters

Detailed narrative

Q2 FY26 Financial Performance

Unitil reported adjusted net income of $5.2 million, or $0.29 per share, for Q2 FY26. For the first half of 2026, adjusted net income reached $39 million, or $2.17 per share, marking a $0.14 or nearly 7% increase compared to the same period in 2025.

The company is fully earning its authorized returns, with a GAAP return on equity of 9.6% on a trailing 12-month basis.

Strategic Acquisitions and Regulatory Agenda

The acquisition of Aquarian Water Company of New Hampshire and Abenaki Water Company successfully closed on June 30th for a total purchase price of $55.8 million, including $13.7 million in assumed debt. This acquisition is expected to be earnings neutral in 2026 and accretive once new distribution rates take effect.

Additionally, Unitil has a non-binding letter of intent to purchase the Massachusetts Aquarian Company from Eversource Energy, pending a base rate case resolution. Regulatory proceedings for Northern Utilities in Maine and New Hampshire are progressing as expected.

Customer Satisfaction and AMI Project Update

Customer satisfaction remains a high priority, with overall satisfaction at 90%, which is slightly better than the previous year and positions Unitil as best among Northeast utilities and within the top quartile nationally. The Advanced Metering Infrastructure (AMI) project in Massachusetts was completed last year, replacing 31,000 meters at a cost of approximately $10 million.

In New Hampshire, 21,000 meters have been replaced, with the remaining 59,000 expected to be completed by the end of 2027, at an estimated total cost of $30 million.

Natural Gas Conversion Opportunities

Natural gas continues to hold a significant price advantage over competing fuels like oil and propane, particularly in Maine where a high percentage of homes use more expensive alternatives. This has led to a 50% increase in customer inquiries for natural gas service year-over-year, with 1,500 new customers currently under contract or in construction.

The company also noted growth in adjusted margin across all natural gas companies compared to 2025, supported by fuel choice statutes in Maine and New Hampshire.

Capital Investment and Balance Sheet Management

Unitil's current five-year capital investment plan through 2030 totals approximately $1.2 billion, representing a 24% increase over the previous plan. This includes $65 million for Bangor Natural Gas and Maine Natural Gas, and $33 million for the New Hampshire Water Companies.

The company maintains a strong balance sheet with an S&P adjusted FFO to debt metric of 17.2%, well within its long-term target. Equity issuance under the ATM program totaled $11 million in Q2, with $37.5 million capacity remaining.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.