Fortis Inc Q2 2025 Earnings Call Highlights: Strong Financial Performance and Strategic Growth Plans

Fortis Inc reported Q2 2025 EPS of $0.76, a $0.09 increase YoY. The company made progress on regulatory fronts, achieved a 34% reduction in scope one greenhouse gas emissions, and completed the first phase of the Roadrunner reserve battery storage project. However, regulatory lag at UNS Energy, tempered growth at Fortis Alberta, and higher finance costs impacted earnings. The company faces potential challenges in meeting its greenhouse gas targets and conversion of coal-fired generation to natural gas at the Springerville generating station.

Fortis Inc. (NYSE: FTS) reported its second-quarter (Q2) 2025 financial results, showcasing a robust performance with earnings per share (EPS) of $0.76, a $0.09 increase year-over-year (YoY). The company's net earnings for the quarter stood at $384 million [1]. Fortis Inc. also achieved significant milestones in its regulatory and sustainability efforts.

The company made notable progress on the regulatory front, including Tucson Electric Power's general rate application and Central Hudson's multi-year rate settlement agreement [2]. Additionally, Fortis Inc. reported a 34% reduction in scope one greenhouse gas emissions compared to 2019 levels, reflecting its commitment to sustainability [3]. The first phase of the Roadrunner reserve battery storage project was completed, enhancing renewable energy integration with a 200 megawatt energy storage system [2].

However, Fortis Inc. faced several operational challenges. Regulatory lag at UNS Energy offset transmission revenue increases, impacting earnings growth. Fortis Alberta faced tempered growth due to the expiration of a PVR efficiency mechanism and a lower allowed return on equity (ROE) of 8.97% effective January 1, 2025. Higher finance costs and the timing of income tax recoveries also negatively impacted the corporate and other segment [2].

The company faces potential challenges in meeting its 2030 and 2035 interim greenhouse gas targets due to changes in resource planning. The conversion of coal-fired generation to natural gas at the Springerville generating station may not have a material impact on the five-year plan but requires careful management of costs and resources [2].

Looking ahead, Fortis Inc. is committed to annual dividend growth of 4 to 6% through 2029, with a rate base growth expected to increase by approximately $14 billion to $53 billion by 2029, supporting an average annual rate-based growth of 6.5% [1]. The company continues to execute its capital plan effectively, with $2.9 billion invested in the first half of the year, keeping it on track to meet its annual capital expenditure target of $5.2 billion [2].

References:
[1] https://finance.yahoo.com/news/fortis-inc-fts-q2-2025-030049179.html
[2] https://www.theglobeandmail.com/investing/markets/stocks/FTS/pressreleases/33845321/fortis-inc-reports-strong-q2-2025-financial-results/
[3] https://www.newswire.ca/news-releases/realizing-energy-savings-and-emissions-reductions-through-rebates-888509933.html