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August 4, 2025 • 4 min read
Today, we're diving into the latest quarterly report from Eversource Energy ([ES]), a major utility holding company providing electricity, natural gas, and water to millions of customers across New England. The company's Form 10-Q filing for the second quarter of 2025 gives us a detailed look at its financial health and operational performance through the midpoint of the year. Let's break down the numbers and see what they tell us.
At first glance, Eversource's top line shows robust growth. For the first six months of 2025, the company reported operating revenues of $6.96 billion, a significant jump from $5.87 billion in the same period last year. However, this impressive revenue growth didn't translate into a proportional increase in profit.
Net income attributable to common shareholders for the first half of the year was $903.5 million, or $2.45 per diluted share. This is a modest increase from the $857.2 million, or $2.43 per diluted share, reported in the first half of 2024.
So, where did all that extra revenue go? A closer look at the income statement reveals several key factors at play. The following flow diagram provides a visual breakdown of how revenues are converted to profits, highlighting the major cost centers.
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As the visualization shows, a few key expenses stand out.
Two major items on the income statement explain why the bottom line didn't keep pace with the top line: regulatory amortization and interest expenses.
Amortization: This is a non-cash expense related to regulatory accounting. Utilities often defer certain costs and recover them from customers over time through rates. The timing of these recoveries can cause large swings in reported income. In the first half of 2025, Eversource recorded an amortization expense of $564.6 million, a stark contrast to the negative amortization (a credit to expenses) of $116.5 million in the same period of 2024. This massive $681 million swing against operating income is the single largest factor constraining profit growth.
Depreciation and Interest: Depreciation expense rose by $70.7 million in the first half of 2025, a direct result of the company's significant investments in its infrastructure. Similarly, interest expense climbed by $71.9 million. The filing notes this increase is partly due to higher debt levels needed to fund these projects and the absence of capitalized interest from their former offshore wind projects, which were sold in 2024.
Eversource is a capital-intensive business, and its spending on infrastructure is the primary engine for future earnings. In the first half of 2025, the company invested nearly $2.05 billion in property, plant, and equipment.
The spending breakdown reveals a clear strategy:
Within the distribution segment, over $713 million was dedicated to replacing "Aging Infrastructure," highlighting the ongoing need to modernize the grid for reliability and safety. This continuous investment is fundamental to the utility business model, as companies earn a regulated rate of return on their approved capital base. To fund this, Eversource issued $1.73 billion in new long-term debt during the first half of the year.
Eversource's operations are divided into several key segments, with the electric businesses serving as the profit powerhouses.
Eversource's second-quarter results paint a picture of a classic utility in action: investing heavily, growing its revenue base through approved rates, and navigating a complex web of operating costs and regulatory mechanisms. While top-line growth is strong, the muted increase in net income underscores the pressures from rising interest rates and the intricacies of regulatory cost recovery.
The company's path forward depends on its ability to continue executing its large-scale capital plan efficiently while successfully managing its costs and securing favorable outcomes in its ongoing regulatory proceedings. For investors, the story of Eversource is one of long-term, capital-driven growth, where the ability to build, maintain, and earn a return on its vast infrastructure network is paramount.
Last updated: August 4, 2025