Chesapeake Utilities 2025 Q1 Earnings Strong Performance as Net Income Rises 10.2%
Thursday, May 8, 2025 7:02 am ET
54min read Chesapeake Utilities (CPK) reported its fiscal 2025 Q1 earnings on May 7th, 2025. The company experienced a notable increase in net income, which rose to $50.90 million from $46.20 million in the previous year. Revenue growth was also impressive, increasing by 21.6% to $298.70 million. Chesapeake Utilities reaffirmed its 2025 EPS guidance and projected further growth by 2028, maintaining a positive outlook. The results indicate a mixed performance, with some areas exceeding expectations while others remained in line with forecasts.
Revenue
Chesapeake Utilities' revenue for 2025 Q1 increased by 21.6% to $298.70 million, driven by robust contributions across all segments. Regulated Energy led with $199.60 million, while Unregulated Energy added $106.70 million. Other businesses and eliminations amounted to a negative $7.60 million, culminating in total operating revenues of $298.70 million.
Earnings/Net Income
The company reported a 7.2% increase in EPS to $2.22 from $2.07, supported by a 10.2% rise in net income to $50.90 million. The EPS growth indicates a solid financial performance.
Price Action
The stock price of Chesapeake Utilities edged up 0.34% during the latest trading day, rose 1.81% over the most recent full trading week, and increased 2.70% month-to-date.
Post-Earnings Price Action Review
The strategy of purchasing Chesapeake Utilities shares following a quarter with increased revenue and holding them for 30 days has historically resulted in underperformance over the past five years. This approach yielded a return of -1.38%, significantly lagging behind the benchmark return of 84.08%, with an excess return of -85.47%. The compound annual growth rate was -0.28%, underscoring the strategy's lack of success. Furthermore, the strategy experienced a substantial maximum drawdown of -15.02% and a Sharpe ratio of -0.04, suggesting high risk coupled with negative returns. This track record indicates that investors following this strategy faced significant challenges in achieving favorable outcomes.
CEO Commentary
"Our results for the quarter are in line with our expectations and demonstrate approximately 11 percent growth in adjusted gross margin and approximately 6 percent growth in adjusted EPS relative to the first quarter of 2024," said Jeff Householder, Chair of the Board, President, and Chief Executive Officer. He noted the company has made significant progress in driving value through capital deployment, regulatory management, and business transformation. In the first quarter, the company invested nearly $113 million in infrastructure projects and is well-positioned to meet targets and achieve new heights in 2025.
Guidance
The Company continues to reaffirm its 2025 EPS guidance range of $6.15 to $6.35 per share, along with the 2028 EPS guidance range of $7.75 to $8.00 per share, implying an annual EPS growth rate of approximately 8 percent. These projections are based on a five-year capital expenditure guidance of $1.5 billion to $1.8 billion, with anticipated capital expenditures of $325 million to $375 million for 2025.
Additional News
Chesapeake Utilities Corporation recently announced a 7% increase in its quarterly dividend, raising it from $0.64 to $0.685 per share. This adjustment elevates the annualized dividend from $2.56 to $2.74 per share. The dividend will be payable on July 7, 2025, to shareholders of record as of June 16, 2025. This decision reflects the Board's focus on sustained dividend growth, supported by earnings growth and a commitment to strategic capital investment. Chesapeake Utilities has consistently paid dividends for 64 years and has increased its annualized dividend every year since 2004, demonstrating its dedication to delivering shareholder value.
Revenue
Chesapeake Utilities' revenue for 2025 Q1 increased by 21.6% to $298.70 million, driven by robust contributions across all segments. Regulated Energy led with $199.60 million, while Unregulated Energy added $106.70 million. Other businesses and eliminations amounted to a negative $7.60 million, culminating in total operating revenues of $298.70 million.
Earnings/Net Income
The company reported a 7.2% increase in EPS to $2.22 from $2.07, supported by a 10.2% rise in net income to $50.90 million. The EPS growth indicates a solid financial performance.
Price Action
The stock price of Chesapeake Utilities edged up 0.34% during the latest trading day, rose 1.81% over the most recent full trading week, and increased 2.70% month-to-date.
Post-Earnings Price Action Review
The strategy of purchasing Chesapeake Utilities shares following a quarter with increased revenue and holding them for 30 days has historically resulted in underperformance over the past five years. This approach yielded a return of -1.38%, significantly lagging behind the benchmark return of 84.08%, with an excess return of -85.47%. The compound annual growth rate was -0.28%, underscoring the strategy's lack of success. Furthermore, the strategy experienced a substantial maximum drawdown of -15.02% and a Sharpe ratio of -0.04, suggesting high risk coupled with negative returns. This track record indicates that investors following this strategy faced significant challenges in achieving favorable outcomes.
CEO Commentary
"Our results for the quarter are in line with our expectations and demonstrate approximately 11 percent growth in adjusted gross margin and approximately 6 percent growth in adjusted EPS relative to the first quarter of 2024," said Jeff Householder, Chair of the Board, President, and Chief Executive Officer. He noted the company has made significant progress in driving value through capital deployment, regulatory management, and business transformation. In the first quarter, the company invested nearly $113 million in infrastructure projects and is well-positioned to meet targets and achieve new heights in 2025.
Guidance
The Company continues to reaffirm its 2025 EPS guidance range of $6.15 to $6.35 per share, along with the 2028 EPS guidance range of $7.75 to $8.00 per share, implying an annual EPS growth rate of approximately 8 percent. These projections are based on a five-year capital expenditure guidance of $1.5 billion to $1.8 billion, with anticipated capital expenditures of $325 million to $375 million for 2025.
Additional News
Chesapeake Utilities Corporation recently announced a 7% increase in its quarterly dividend, raising it from $0.64 to $0.685 per share. This adjustment elevates the annualized dividend from $2.56 to $2.74 per share. The dividend will be payable on July 7, 2025, to shareholders of record as of June 16, 2025. This decision reflects the Board's focus on sustained dividend growth, supported by earnings growth and a commitment to strategic capital investment. Chesapeake Utilities has consistently paid dividends for 64 years and has increased its annualized dividend every year since 2004, demonstrating its dedication to delivering shareholder value.
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