On August 8, 2024, Chesapeake Utilities Corp (CPK, Financial) released its 8-K filing reporting its financial results for the second quarter of 2024. Chesapeake Utilities Corp is a diversified energy delivery company engaged in natural gas transmission and distribution, electricity generation and distribution, propane gas distribution, mobile compressed natural gas utility services and solutions, and other businesses. The company operates in two reportable segments: Regulated Energy and Unregulated Energy.
Performance Overview
Chesapeake Utilities Corp (CPK, Financial) reported net income of $18.3 million, or $0.82 per share, for the second quarter of 2024, surpassing the analyst estimate of $0.69 per share. Adjusted net income, which excludes transaction and transition-related expenses from the acquisition of Florida City Gas (FCG), was $19.3 million, or $0.86 per share. This represents a significant improvement from the $16.1 million, or $0.79 per share, reported in the same period last year.
For the first half of 2024, net income was $64.4 million, or $2.89 per share, compared to $52.5 million, or $2.36 per share, in the prior-year period. Adjusted net income for the first half was $66.1 million, or $2.96 per share, compared to $52.5 million, or $2.36 per share, in the same period in 2023.
Key Financial Achievements
Chesapeake Utilities Corp (CPK, Financial) achieved an adjusted gross margin growth of $61.8 million during the first half of 2024, driven by contributions from FCG, natural gas organic growth, continued pipeline expansion projects, regulatory initiatives, and increased customer consumption. The company also received approval for multiple pipeline projects, supporting continued natural gas demand in Delaware and Florida, which is expected to drive incremental margins for 2025 and beyond.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Income (GAAP) | $18.3 million | $16.1 million |
| Adjusted Net Income (Non-GAAP) | $19.3 million | $16.1 million |
| Earnings Per Share (GAAP) | $0.82 | $0.79 |
| Adjusted Earnings Per Share (Non-GAAP) | $0.86 | $0.79 |
Balance Sheet and Cash Flow
Chesapeake Utilities Corp (CPK, Financial) reported capital expenditures of $159.5 million for the first half of 2024. The company continues to affirm its 2024 EPS guidance of $5.33 to $5.45 and capital expenditure guidance of $300 million to $360 million. The company also projects a 2025 EPS guidance range of $6.15 to $6.35 and a 2028 EPS guidance range of $7.75 to $8.00, implying an EPS growth rate of approximately 8 percent from the 2025 EPS guidance range.
Commentary and Analysis
"Our results this quarter demonstrate the opportunities in our high-growth service areas, the value of our unregulated businesses, and our commitment to operational excellence," said Jeff Householder, chair, president, and CEO. "We continue to remain on-track with the integration of FCG, experienced continued strong customer growth of approximately 4 percent across our Delmarva and Florida footprints, and managed expenses prudently, driving 41 percent of adjusted gross margin to operating income on a year-to-date basis."
The company's performance is significant as it highlights the successful integration of FCG and the effectiveness of its growth strategy. The increase in adjusted gross margin and net income underscores the company's ability to capitalize on organic growth opportunities and regulatory initiatives.
Conclusion
Chesapeake Utilities Corp (CPK, Financial) has demonstrated robust financial performance in the second quarter of 2024, exceeding analyst estimates and showcasing strong growth driven by strategic acquisitions and organic expansion. The company's continued focus on regulatory initiatives and capital investments positions it well for sustained growth in the coming years.
Explore the complete 8-K earnings release (here) from Chesapeake Utilities Corp for further details.
