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MIDDLESEX WATER CO (MSEX)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue rose 9.4% year over year to $44.3M, driven by NJ rate increases, higher consumption, and customer growth; operating income improved sequentially to $11.6M from $10.5M in Q4 2024 .
  • EPS was $0.53, down from $0.59 in Q1 2024 due to the absence of a prior-year one-time recovery related to Park Avenue water treatment costs; revenue modestly beat consensus while EPS modestly missed (EPS miss, revenue beat) . Wall Street consensus (S&P Global): EPS $0.57, revenue $43.79M*; actuals: EPS $0.53, revenue $44.30M .
  • Strategic actions underpinning forward growth: DSIC #3 filing expected to add $1.9M annual revenue starting June 2025; Ocean View acquisition closed (~900 customers added, $4.6M purchase price); dividend maintained at $0.34 per share .
  • Potential stock reaction catalysts: regulatory revenue mechanisms (DSICs, NJ base rate filing), inorganic expansion (Ocean View), and sustained capex ($19M in Q1; $93M planned for 2025) supporting rate base growth .

What Went Well and What Went Wrong

What Went Well

  • Rate increases, higher consumption, and customer growth drove $3.8M YoY revenue growth; Middlesex system contributed +$3.4M and Tidewater +$0.6M; management emphasized “selective and sustainable growth” with Ocean View close . Quote: “With the completion of the Ocean View acquisition, we are demonstrating our focus on selective and sustainable growth…” — CEO Nadine Leslie .
  • Sequential operating income improved (Q4 2024: $10.5M → Q1 2025: $11.6M), indicating early benefits from rate actions and demand backdrop .
  • Infrastructure investment momentum: $19M invested in Q1; DSIC #3 expected to add $1.9M annual revenues from June 2025, reinforcing earnings visibility .

What Went Wrong

  • EPS declined YoY (Q1 2025: $0.53 vs Q1 2024: $0.59) with a tough comp due to prior-year one-time recovery ($4.3M net of tax) tied to Park Avenue facilities; this also reduced Other Income vs Q1 2024 (Q1 2025: $1.8M vs Q1 2024: $5.4M) .
  • Operating expenses increased ~$2.0M YoY to $32.7M, including higher variable production costs and weather-driven main breaks, pressuring margins vs prior year .
  • Non-regulated supplemental contract services revenue fell $0.2M YoY, slightly offsetting regulated system gains .

Financial Results

Core Financials (Income Statement)

MetricQ1 2024Q3 2024Q4 2024Q1 2025
Operating Revenues ($USD Millions)$40.52 $55.10 $47.11 $44.30
Total Operating Expenses ($USD Millions)$30.66 $37.60 $36.58 $32.74
Operating Income ($USD Millions)$9.87 $17.50 $10.53 $11.56
Net Income ($USD Millions)$10.68 $14.32 $8.80 $9.48
Diluted EPS ($USD)$0.59 $0.80 $0.49 $0.53

Margins

MetricQ1 2024Q3 2024Q4 2024Q1 2025
EBIT Margin %27.47%*34.06%*25.03%*28.72%*
Net Income Margin %26.36%*25.99%*18.69%*21.40%*

Values retrieved from S&P Global.*

Estimates vs Actuals (Q1 2025)

MetricWall Street Consensus (S&P Global)*Actual
Revenue ($USD)$43.79M*$44.30M
EPS ($USD)$0.57*$0.53
# of Estimates (EPS)3*—
# of Estimates (Revenue)3*—

Values retrieved from S&P Global.*

Segment/Driver Breakdown (YoY Change Drivers, Q1 2025 vs Q1 2024)

DriverImpact ($USD Millions)Notes
Middlesex System+$3.4 Rate increases and higher consumption
Tidewater Utilities (DE)+$0.6 Customer growth and higher consumption
Non-Regulated Supplemental Services-$0.2 Lower supplemental contract services
Net Change+$3.8 Operating revenue: $44.3M vs $40.5M

KPIs and Investment

KPIQ1 2025Reference
Capex Invested ($USD)$19M Infrastructure resiliency
2025 Planned Capex ($USD)$93M Includes mains, hydrants, meters
DSIC #3 Incremental Annual Revenue$1.9M starting June 2025 Adds to existing $1.1M DSICs
Dividend per Share (Q2)$0.34; payable 6/2/2025 52 consecutive annual increases
Ocean View Acquisition~$4.6M; ~900 customers Closed April 2025

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
DSIC #3 Annual RevenueFrom Jun 2025N/A~$1.9M New
Dividend per ShareQ2 2025$0.34 (Q1 declared) $0.34 (declared Apr 25) Maintained
Capex PlanFY 2025~$93M (as of Feb 28) ~$93M reaffirmed Maintained
NJ Base Rate RequestFiled 6/30/2025N/ARequesting $24.9M annual increase New (post‑Q1 filing)

Earnings Call Themes & Trends

Note: A Q1 2025 earnings call transcript was not available in our document set; themes below reflect management communications in Q3/Q4 2024 and Q1 2025 press releases .

TopicPrevious Mentions (Q-2: Q3 2024)Previous Mentions (Q-1: Q4 2024)Current Period (Q1 2025)Trend
Regulatory/Rate ActionsNJ base rate increase took effect; Tidewater interim rates; DSIC filings Continued NJ rate impacts; momentum into Q4 DSIC #3 filed; NJ base rate request planned/ongoing activity Increasing regulatory activity
Infrastructure/CapexFocused capex, resiliency; RENEW program $75M in 2024; $93M planned 2025 $19M invested in Q1; $93M plan reaffirmed Sustained elevated capex
PFAS/ComplianceNJBPU case included PFOA settlement impacts $105M PFAS treatment at Olsen plant planned (2025–2027) Ongoing compliance investments Ongoing, sizable spend
Customer DemandWeather-driven demand uplift in NJ and DE Weather-driven demand cited Higher consumption; wholesale customer consumption supported Stable to improving
M&A/Footprint—Tidewater acquisition approvals underway Ocean View acquisition closed (~900 customers) Expanding
Dividend Policy+4.62% increase announced Oct 2024 Consistent payout $0.34 declared Apr 25 Stable/increasing over years

Management Commentary

  • “We are excited to welcome Ocean View residents as our customers… demonstrating our focus on selective and sustainable growth and continuing our mission of delivering clean and reliable drinking water for more customers.” — Nadine Leslie, President & CEO .
  • “Our strong financial results are a reflection of our commitment to operational excellence, delivering safe and reliable service to our customers and working constructively with regulators to recover prudent infrastructure investments in a timely manner.” — Nadine Leslie (Q3 2024) .

Q&A Highlights

  • No Q1 2025 earnings call transcript was available in our document set; the company provided detailed press releases and will file the Form 10‑Q, but no published Q&A content to analyze .

Estimates Context

  • Consensus EPS: $0.57* vs actual $0.53 (miss); Consensus revenue: $43.79M* vs actual $44.30M (beat). Three estimates contributed to both EPS and revenue consensus*.
  • Drivers of the EPS variance: lack of the Q1 2024 one-time recovery ($4.3M net of tax) and higher variable/maintenance costs, partially offset by rates, consumption, and customer growth .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Mixed headline: modest revenue beat but EPS miss vs consensus; comp headwind from the prior-year one-time recovery explains most EPS pressure . Values retrieved from S&P Global.*
  • Sequential operating improvement (OI up to $11.6M) amid higher expenses suggests regulated rate actions and demand backdrop are supporting trend-line earnings .
  • DSIC #3 unlocks ~$1.9M annual revenue from June 2025, adding near-term earnings visibility independent of macro .
  • Ocean View acquisition expands the Delaware footprint (~900 customers) and supports long-term rate base growth; integration risk appears low given Tidewater’s prior service provision .
  • Elevated capex ($19M in Q1; $93M planned for 2025) positions the company for resilient operations and future recovery mechanisms; PFAS compliance spend remains sizable through 2027 .
  • Dividend continuity ($0.34 declared) underscores steady capital return while the NJ base rate filing ($24.9M request) could be a medium-term catalyst if approved .
  • Near-term focus: monitor 10‑Q for margin details and DSIC implementation timing; medium-term thesis hinges on regulatory outcomes, disciplined capex execution, and demand trends .