Middlesex Water 2025 Q2 Earnings Misses Targets with Net Income Growth

Middlesex Water (MSEX) reported its fiscal 2025 Q2 earnings on Jul 31st, 2025. Middlesex Water's earnings missed expectations, with diluted EPS of $0.60 falling short of analyst estimates of $0.67. The company's operating revenues reached $49.32 million, slightly underperforming projections of $51.34 million. Despite the earnings miss, the company remains optimistic, forecasting continued revenue growth bolstered by regulatory approvals. Guidance remains in line, with strategic investments slated to support infrastructure enhancements. The established dividend policy underscores a commitment to shareholder returns amidst infrastructure spending.

Revenue

Earnings/Net Income
Middlesex Water's EPS rose 1.7% to $0.60 in 2025 Q2 from $0.59 in 2024 Q2, marking continued earnings growth. Meanwhile, the company's profitability strengthened with net income of $10.78 million in 2025 Q2, marking 2.2% growth from $10.55 million in 2024 Q2. Remarkably, the company has sustained profitability for more than 20 years over the corresponding fiscal quarter, underscoring strong operational resilience. The EPS indicates stable performance given the company's historical consistency.

Price Action
The stock price of Middlesex Water has edged up 0.51% during the latest trading day, has edged down 1.81% during the most recent full trading week, and has dropped 4.76% month-to-date.

Post Earnings Price Action Review
The strategy of purchasing Middlesex Water (MSEX) shares following a quarter-over-quarter revenue decline on the financial report release date and holding for 30 days resulted in poor performance. The strategy returned -6.04%, significantly underperforming the benchmark return of 85.57%. With a maximum drawdown of 0.00% and a Sharpe ratio of -0.04, the strategy indicated high risk due to the negative Sharpe ratio, suggesting that the risk-adjusted return was unfavorable. This reflects the challenges investors face when aligning short-term trading strategies with the company's long-term investment outlook, highlighting the importance of considering broader market trends and company fundamentals.

CEO Commentary
“We appreciate the dedication and commitment of the Delaware Public Service Commission Staff and the Public Advocate during a comprehensive review process of our general rate case,” said Nadine Leslie, Chair, President and Chief Executive Officer of Middlesex Water Company. The constructive outcome of the general rate case in Delaware supports our selective and sustainable growth pillar and the ability to continue making prudent investments in our Tidewater System to provide safe and reliable water utility service to our customers and the communities we serve at affordable rates.

Guidance
Middlesex Water Company projects continued revenue growth, supported by the recent approval of a $5.5 million increase in annual operating revenues following the general rate case in Delaware. The company anticipates further capital investment recovery through a joint petition filed with the New Jersey Board of Public Utilities, seeking an increase of approximately $24.9 million. Additionally, Middlesex plans to implement a Distribution System Improvement Charge and a Resiliency and Environmental System Improvement Charge, aiming for recovery of up to $11.4 million in qualifying capital investments over the next three years.

Additional News
In recent non-earnings related developments, Middlesex Water Company declared a quarterly cash dividend of $0.34 per share, maintaining its long-standing tradition of rewarding shareholders. This marks the 52nd consecutive year of dividend increases, underscoring the company's commitment to consistent shareholder returns. Furthermore, the company has made significant strides in regulatory engagement, securing approval for a rate increase in Delaware that adds $5.5 million to annual revenues. Additionally, Middlesex filed for a substantial rate request in New Jersey, seeking a $24.9 million increment to recover past investments. These regulatory actions reflect the company's strategic focus on sustainable growth and infrastructure resilience.