Unitil Reaffirms 2026 Outlook as Nine-Month Earnings Rise

Unitil Corporation (NYSE: UTL) reaffirmed its 2026 adjusted earnings guidance after higher utility rates, customer growth and acquired operations helped lift nine-month profit, offsetting a wider third-quarter loss and rising operating, depreciation and financing costs.

The New England utility continues to expect 2026 adjusted earnings per share of $3.20 to $3.36, with a midpoint of $3.28. It also maintained its long-term targets for annual EPS growth of 5% to 7% and rate-base growth of 6.5% to 8.5%.

For the third quarter ended Sept. 30, Unitil reported a GAAP net loss of $1.5 million, or $0.08 per share, compared with a loss of $0.3 million, or $0.02 per share, a year earlier. Excluding acquisition-related transaction costs, the adjusted net loss was $0.7 million, or $0.04 per share, versus adjusted net income of $0.4 million, or $0.03 per share, in the prior-year period.

Results were stronger over the first nine months of 2026. GAAP net income increased to $36.4 million, or $2.02 per share, from $31.2 million, or $1.89 per share, a year earlier. Adjusted net income rose to $38.3 million from $33.5 million, while adjusted EPS increased 4.4% to $2.12 from $2.03.

Rate increases and acquisitions support margins

Combined adjusted gross margin and water revenue increased by $29.9 million in the first nine months, reflecting higher rates, colder winter weather and customer growth. The increase included contributions of $10.5 million from Maine Natural Gas and $3.1 million from the Aquarion water companies.

Electric adjusted gross margin rose 11.1% to $96.0 million. The company attributed the increase primarily to $10.3 million from higher rates, partly offset by a one-time $0.7 million reduction in Federal Energy Regulatory Commission transmission revenue. Rate measures included a $13.0 million permanent award for Unitil Energy Systems effective May 1, as well as grid-modernization and performance-based adjustments at Fitchburg Gas and Electric.

Electricity sales declined 0.6% to 1.20 billion kilowatt-hours, while the number of electric customers increased 0.4% to about 111,300. Unitil said all its electric customers are covered by revenue-decoupling mechanisms, which reduce the link between distribution revenue and sales volume.

Gas adjusted gross margin increased 12.8% to $151.9 million. Gas sales rose 11.9% to 223.6 million therms, and customer count increased 6.8% to approximately 103,100. The margin improvement included the Maine Natural Gas contribution and a $5.5 million temporary rate award for Northern Utilities in New Hampshire that took effect June 1. About 52% of Unitil’s gas customers are decoupled.

Higher expenses absorbed part of the margin growth. Operation and maintenance costs increased by $8.2 million, depreciation and amortization rose by $6.6 million, and taxes other than income taxes increased by $3.5 million. Net interest expense was $4.9 million higher because of increased long-term debt and short-term borrowings, partly offset by lower interest expense on regulatory liabilities.

Water expansion and regulatory proceedings

Unitil completed its acquisition of Aquarion Water Company of New Hampshire and Abenaki Water Company on June 30. The businesses serve roughly 10,700 customers in eight New Hampshire communities and have a combined rate base of $49 million. Unitil expects the transaction to be earnings-neutral in 2026 and said the ownership transition did not disrupt operations or customers.

The company has also signed a non-binding letter of intent with Eversource Energy to acquire Aquarion Water Company of Massachusetts. The proposed transaction depends on the completion of a base-rate proceeding expected to be filed on or after Nov. 16, 2026. If approved, updated water distribution rates are expected to take effect Oct. 1, 2027.

Separately, Northern Utilities is pursuing rate cases in New Hampshire and Maine. The New Hampshire filing seeks a $9.8 million permanent base-rate increase based on a requested $223 million rate base, a 52.14% equity ratio and a 10.6% return on equity. Permanent rates are scheduled for April 1, 2027.

The Maine proceeding seeks a $10.4 million increase based on a requested $360 million rate base, the same equity ratio and a 10.6% return on equity. Permanent rates are expected to take effect June 1, 2027, subject to regulatory approval.

Capital plan and financing

Unitil’s long-term rate-base target is supported by an approximately $1.2 billion five-year capital investment plan. Forecast annual capital spending rises from $227 million in 2026 to $259 million in 2030. The company expects cash flow from operations after dividends to fund most of the plan, with net debt accounting for about 30% of financing and equity for about 12%.

During 2026, Unitil and its subsidiaries arranged $200 million of debt financing at a weighted average rate of 5.76%. The company also raised $27.3 million through its at-the-market equity program through Sept. 30 and reported $21.3 million of remaining capacity. Acquisition term loans were fully repaid, primarily with equity and long-term debt proceeds.

Unitil reported a 9.0% GAAP return on average common equity for the 12 months ended Sept. 30. It maintained a long-term funds-from-operations-to-debt target of 16% to 18% and a dividend payout target of 55% to 65%.

Execution of the capital program and earnings targets remains subject to regulatory decisions, access to debt and equity financing, interest rates, severe weather, operating and cybersecurity risks, and the company’s ability to integrate acquired businesses. Its expanded water operations also introduce risks related to water quality, environmental compliance, supply limitations and infrastructure failures.