Earnings call transcript: H2O America Q3 2026 misses estimates, stock rises

H2O America reported third-quarter adjusted earnings of $1.04 per share on revenue of $250.23 million, falling short of Wall Street's expectations. Despite this, the company's stock rose by 3.8%, trading at $60.71, indicating that investors are focusing on the utility's long-term growth strategy, Texas acquisitions, and steady guidance for the full year.

The adjusted earnings per share (EPS) missed the $1.20 estimate by 13.3%, while revenue fell 4.1% from the forecast. H2O America has narrowed its adjusted EPS guidance for 2026 to a range of $3.10 to $3.16, with the midpoint remaining at $3.13. Despite the shortfall, the company expects full-year 2026 adjusted EPS of $2.91 to $2.97, which includes the effects of Texas acquisitions and financing.

Active connections for H2O America increased by 14% in 2026, driven by growth at Quadvest and other Texas operations. The company's stock has now reached near the top of its 52-week range, reaching $60.71, which is 90.5% of the way from its 52-week low of $43.75 to its high of $67.09.

H2O America's adjusted diluted EPS for the quarter decreased to $1.04 from $1.27 a year earlier, an 18% decline. Year-to-date, adjusted EPS stands at $2.30, down from $2.53 in the same period of 2025. The company reported an 8% increase in adjusted net income through September 30, but this was offset by a 20% increase in weighted average diluted shares outstanding due to the company's automatic tender offer (ATM) program and a March equity issuance.