EVERSOURCE ENERGY (ES) Q4 2023 Earnings Summary

Executive Summary

Q4 2023 GAAP EPS was $(3.68) driven by a non-cash after-tax offshore wind impairment; recurring EPS was $0.95, up vs $0.92 in Q4 2022, reflecting solid regulated utility performance despite higher interest and depreciation costs .
Management executed a full exit pathway for offshore wind: agreement to sell 50% stakes in South Fork and Revolution to GIP (~$1.1B cash proceeds) and a conditional Sunrise Wind sale to Ørsted, with total 2023 after-tax impairments of ~$1.95B to reset carrying values .
2024 non-GAAP EPS guidance: $4.50–$4.67; dividend raised 6% (to $0.715 quarterly; $2.86 annualized); long-term EPS CAGR of 5–7% through 2028 reaffirmed, underpinned by a $23.1B 2024–2028 core capex plan (up $1.6B vs prior) .
Balance sheet plan targets S&P FFO/Debt of 14–15% by 2025, aided by offshore wind proceeds (~$1.6B including tax equity) and potential Aquarion (water) sale to reduce equity needs; equity plan “up to $1.3B” via ATM over several years provides flexibility .

What Went Well and What Went Wrong

What Went Well

Offshore wind exit roadmap finalized: sale agreement with GIP for South Fork and Revolution (~$1.1B proceeds) and conditional Sunrise sale to Ørsted, reducing future funding needs and simplifying the story to core regulated utilities .
Regulated execution: recurring 2023 EPS was $4.34 (+~6% YoY) with Electric Transmission and Distribution growing segment EPS; Board approved a 6% dividend increase for Q1’24 to $0.715 per share .
Operational excellence: top-decile electric reliability (22.3 months between interruptions; SAIDI 58.6) and 98% on-time gas emergency response support constructive regulatory outcomes and customer trust .

Quoted management:

“We are pleased to be in the final stage of this long journey, and we feel confident that we are turning over the reins of the wind business to capable and committed parties.” — CEO Joe Nolan .
“We are projecting a non-GAAP recurring earnings per share range of $4.50 to $4.67 per share for 2024.” — CFO John Moreira .

What Went Wrong

Offshore wind charges: additional Q4 impairment (~$1.77B pre-tax) primarily due to Sunrise OREC repricing denial and higher costs; total 2023 pre-tax impairments ~$2.17B (after-tax ~$1.95B) .
Connecticut remains challenging: earned ROEs trending lower (CNP ~8%, Yankee ~7%); large deferred storm balances require multi-year recovery and prudency review .
Equity and cost pressures: higher interest, depreciation, and property taxes remain headwinds, partially offsetting rate and O&M benefits; 2024 equity issuance “up to $1.3B” via ATM dilutes over time .

Financial Results

Note on revenue and margins: The company’s Q4 2023 earnings materials and call focused on EPS and segment results; they did not disclose consolidated revenue or margin metrics in the press release/slides, and S&P Global consensus data was unavailable via tools at this time. As a result, revenue and margin comparisons are omitted. Values below reflect company disclosures.

EPS – GAAP vs Non-GAAP (older → newer)

Metric	Q2 2023	Q3 2023	Q4 2023
GAAP EPS ($)	$0.04	$0.97	$(3.68)
Recurring/Adjusted EPS ($)	$1.00	$0.97	$0.95

Year-over-Year EPS (Q4 only)

Metric	Q4 2022	Q4 2023
GAAP EPS ($)	$0.92	$(3.68)
Recurring/Adjusted EPS ($)	$0.92	$0.95

Segment EPS (Q4)

Segment (EPS contribution)	Q4 2022	Q4 2023
Electric Transmission	$0.40	$0.47
Electric Distribution	$0.28	$0.30
Natural Gas Distribution	$0.25	$0.22
Water Distribution	$0.02	$0.01
Parent & Other (Non-GAAP)	$(0.03)	$(0.05)
Recurring EPS total	$0.92	$0.95

KPIs

KPI	Value
Customers served	~4.4 million
Electric reliability	22.3 months between interruptions; SAIDI 58.6
Gas emergency response	98% on-time within 45 minutes

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Non-GAAP EPS	FY 2024	—	$4.50 – $4.67	New
Dividend	2024 annualized	$2.70 (2023)	$2.86	Raised ~6%
Long-term EPS CAGR	Through 2028	5%–7%	5%–7%	Maintained
Core capex plan	2024–2028	~$21.5B (Feb-2023)	$23.1B	Raised +$1.6B
FFO/Debt (S&P)	2024–2025	—	14%–15% target	New

Earnings Call Themes & Trends

Topic	Q2 2023 (Prior-2)	Q3 2023 (Prior-1)	Q4 2023 (Current)	Trend
Offshore wind exit	Strategic review; initial impairment; progressing sale docs	Near “goal line”; Sunrise OREC denial; still optimistic on rebid; plan to split sale timing if needed	Agreements to sell South Fork & Revolution to GIP; conditional Sunrise sale to Ørsted; full exit pathway; detailed impairment drivers	Execution progressing; de-risking
Capex & rate base	$21.5B plan; focus on grid modernization	Reaffirm capex; MA ESMP emphasized	$23.1B plan (+$1.6B); incremental opportunities not included	Upward
CT regulatory/ROE	Prudency filing approach; deferred storm balances	Cautious tone on CT backdrop	CT earned ROEs CNP ~8%, Yankee ~7%; prudency filing $635m; Aquarion appeal argued	Still challenging
Balance sheet & equity	$1B ATM remaining; focus on FFO/Debt improvement	Still $1B; timing flexible; target 15% FFO/Debt by end-2024	Up to $1.3B ATM over several years; FFO/Debt 14–15% 2024–2025; leverage aided by OSW proceeds and potential water sale	Improving metrics
Water business	—	—	Exploring Aquarion sale to reduce equity needs and improve regulatory diversity	New strategic lever
Operations/ESG	Emissions targets; grid reliability focus	Top-decile reliability messaging	Reliability KPIs, safety, ESG recognition reiterated	Consistent strength

Management Commentary

Offshore wind exit: “By taking this impairment charge, we are accounting for our full exit from Offshore Wind... I am pleased to say that we have the pathway in place to finalize a full exit.” — CEO Joe Nolan .
2024 outlook: “We are projecting a non-GAAP recurring earnings per share range of $4.50 to $4.67 per share for 2024.” — CFO John Moreira .
Equity flexibility: “Up to $1.3 billion of equity over the next several years... we will be executing through our ATM program to give us the flexibility that we need.” — CFO John Moreira .
Dividend alignment: “We expect to grow our dividend in line with our earnings growth.” — CFO John Moreira .

Q&A Highlights

Equity plan and alternatives: Management emphasized flexibility to pace “up to $1.3B” ATM issuance over several years and consider blocks if valuations improve . Proceeds from potential Sunrise sale to Ørsted are not in the plan and would further reduce equity needs .
Cost sharing and contingencies (Revolution): Exposure capped via capital overrun sharing (Eversource shares Buyer’s obligations up to a threshold; IRR true-up around 13% at COD) — reflected in impairment and financing plan .
FFO/Debt trajectory: 2023 “low double digits”; target 14–15% by 2025 at S&P aided by offshore wind proceeds, rate increases, storm recovery, and potential water sale .
Connecticut storm costs: MA and NH recoveries rolling into rates; CT prudency filing ($635m) underway with longer timing; not assumed near-term .

Estimates Context

S&P Global consensus estimates were unavailable via tools at the time of analysis. As such, formal S&P comparisons could not be performed.
Third-party reporting indicated adjusted EPS of $0.95 vs consensus ~$0.97 (a ~2c miss); revenue reportedly ~$2.84B with a revenue miss, though the company did not provide revenue in its press release . When S&P Global data becomes available, we recommend updating the table to anchor on S&P for EPS and revenue.

Key Takeaways for Investors

The offshore wind exit significantly de-risks the equity story and cash flow profile; impairment resets book values and reduces future capex exposure. Focus shifts to regulated growth where the company has strong execution .
2024 guide ($4.50–$4.67) and dividend hike (+6%) signal confidence in the core plan despite higher financing costs; sustained 5–7% EPS CAGR through 2028 is underpinned by a larger $23.1B capex program .
Balance sheet actions (offshore wind proceeds, potential Aquarion sale, staged ATM) target S&P FFO/Debt of 14–15% by 2025, mitigating dilution risk and supporting ratings .
Regulatory risk in Connecticut remains the key watch item (earned ROEs and storm cost timing), but Massachusetts and New Hampshire trends are constructive with confirmed storm cost recoveries and PBR mechanisms .
Near-term catalysts: close of GIP transaction, Sunrise RFP outcome and potential Ørsted sale, Aquarion process launch, and Massachusetts ESMP decision (Aug 2024) .
Tactical: The narrative has pivoted to a cleaner, regulated utility with clearer capital allocation and dividend visibility; stock reaction should track execution on deal closes, FFO/Debt progress, and CT regulatory outcomes .

Supporting references:

Q4 2023 earnings press release (Feb 13, 2024)
Q4 2023 earnings call transcript (Feb 14, 2024) –
Q4 2023 earnings slides
Ørsted–Sunrise Wind agreement 8-K (Jan 24, 2024)
Offshore wind impairment 8-K and press release (Jan 8, 2024)