Emera Incorporated (EMA:CA) Q3 2025 Earnings Call Transcript
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Overview
The earnings call summary shows mixed signals. While there is strong capital investment and positive contributions from Tampa Electric, there are declines in Canadian utilities and gas utilities. The Q&A section reveals cautious management with uncertainties in guidance extension and data center opportunities. The acceleration of solar investments due to policy uncertainties also indicates caution. Overall, the sentiment is balanced between positive investments and cautious outlook, leading to a neutral prediction.
Key Financial Performance
Third Quarter Adjusted Earnings Per Share $0.88, a nearly 9% increase over the same period in 2024. The increase was driven by disciplined execution, customer-focused investments, and the strength of the company's strategy and portfolio.
Year-to-Date Adjusted Earnings Per Share $2.94, representing a 14% increase over the same period in 2024. This growth reflects strong operational performance and strategic investments.
Third Quarter Adjusted Earnings $263 million, compared to $236 million in the third quarter of 2024, representing a 9% increase. The increase was driven by new rates at Tampa Electric, customer growth, and favorable weather conditions.
Year-to-Date Adjusted Earnings $878 million, compared to $603 million in 2024, representing a 40% increase. This growth was supported by favorable weather conditions, new rates at Tampa Electric, and strategic investments.
Operating Cash Flow A 23% increase year-over-year when normalized for fuel and storm deferrals. This growth was driven by robust earnings and effective cash flow management.
Capital Investment $3.6 billion in 2025, with more than $2.6 billion already deployed. Investments were focused on solar and reliability projects at Tampa Electric, energy storage and transmission upgrades in Nova Scotia, and gas infrastructure at Peoples Gas.
Tampa Electric Contributions Increased by $0.16 per share in Q3 2025 compared to Q3 2024, driven by new rates reflecting capital investments and customer growth.
Canadian Electric Utilities Contributions Decreased by $0.04 per share in Q3 2025 compared to Q3 2024, primarily due to higher operating costs and depreciation expenses.
Emera Energy Contributions Modestly increased due to favorable weather conditions leading to higher natural gas prices and increased volatility, though partially offset by lower earnings at Bear Swamp due to an outage.
Gas Utilities Contributions Decreased by $0.02 per share in Q3 2025 compared to Q3 2024, due to lower contributions from New Mexico Gas and Peoples Gas.
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Operating Highlights
Solar Investments: Investments in Florida have saved customers more than USD 350 million in avoided fuel costs.
Energy Storage Projects: Ongoing energy storage projects in Nova Scotia have received investment tax credits.
Florida Market Growth: Florida has experienced nearly 38% GDP growth in the last 5 years, with robust population and economic expansion driving increased demand for electricity and natural gas.
Nova Scotia Market Expansion: Investments in Nova Scotia are driven by growth in the province, severe weather reliability needs, and government policies to close coal plants.
Capital Investment: Record USD 3.6 billion in capital investment in 2025, with a USD 20 billion capital plan through 2030.
Customer Cost Management: Tampa Electric's rate base has grown by over 8% annually since 2016, while bill increases have remained below the national average.
Regulatory Approvals: Florida Public Service Commission approved USD 67 million in new rates for Peoples Gas in 2026, with subsequent year adjustments.
Asset Securitization: Nova Scotia Power proposed USD 700 million in securitization related to thermal generation assets to minimize customer cost impacts.
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Risk or Challenges
Regulatory Risks: The company faces regulatory risks, including the need for approval of rate increases and asset securitization in Nova Scotia and Florida. Delays or unfavorable decisions could impact financial performance and investment plans.
Customer Affordability: Balancing the need for significant capital investments with customer affordability is a challenge. Rising costs could lead to customer dissatisfaction or regulatory pushback.
Economic and Market Conditions: Economic uncertainties, such as inflation and fluctuating energy prices, could impact customer demand and operational costs.
Execution Risks: The execution of a $20 billion capital plan through 2030 requires precise management. Any delays, cost overruns, or operational inefficiencies could adversely affect financial performance.
Weather-Related Risks: Severe weather conditions in Nova Scotia and other regions could disrupt operations and increase costs for infrastructure repairs and upgrades.
Supply Chain Disruptions: Potential supply chain disruptions could delay key projects, impacting timelines and costs.
Asset Sale Uncertainty: The pending sale of New Mexico Gas is subject to regulatory approval, and any delays or unfavorable outcomes could affect funding plans.
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Guidance & Outlook
Capital Investment: Emera plans to invest $20 billion in capital from 2026 to 2030, focusing on reliability, resilience, modernization, and generation capacity. This includes $1.2 billion for transmission expansion and capacity improvements at Tampa Electric and over $2 billion for solar and energy storage projects, aiming for 2,100 megawatts of solar capacity by 2028.
Rate Base Growth: The company expects a 7% to 8% rate base growth trajectory through 2030, with Florida utilities projected to achieve 8% to 9% growth due to robust population and economic expansion.
Earnings Growth: Emera maintains its 5% to 7% adjusted earnings per share growth guidance through 2027 and plans to update this guidance in February 2026.
Regulatory Approvals: The Florida Public Service Commission approved a $67 million rate increase for Peoples Gas in 2026, with subsequent adjustments in 2027 and 2028. Tampa Electric's 2026 base rate increase of $88 million was also formalized. Nova Scotia Power filed for new rates for 2026 and 2027, with a decision expected in early 2026.
Customer Affordability: Emera is focused on balancing affordability with necessary investments. For example, solar investments in Florida have saved customers over $350 million in avoided fuel costs.
Funding Plan: The $20 billion capital plan will be funded through reinvested cash flows (45%-50%), operating company debt, equity markets (10%), and hybrid capital (5%). Proceeds from the sale of New Mexico Gas and asset securitization in Nova Scotia will also contribute.
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Shareholder Return Plan
Dividend Increase: In September, the Board of Directors approved a 1% dividend increase, marking the 19th consecutive year of annual increases. This reflects confidence in the strength of the asset portfolio and the ability to deliver consistent earnings and cash flow growth.
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Key Q&A
Q:Can you explain the changes in the capital forecast compared to the prior one, particularly the shift in capital allocation over the years?
A:Some planned capital at Tampa Electric for 2026 and 2027 has been accelerated into 2025, especially for solar investments, to address policy uncertainties. Additionally, as part of the rate settlement at Peoples Gas, some capital spending was reprofiled over a longer period.
Q:How do you view credit metrics as a factor in capital deployment, and would you consider issuing equity for additional capital projects?
A:Credit metrics are considered alongside execution ability, customer rate impacts, regulatory lag, and funding. The company is open to issuing equity to fund accretive capital projects if needed.
Q:What is Emera's involvement in the Wind West initiative, and what opportunities does it present?
A:Emera is interested in supporting the initiative, particularly in transmission and subsea connections to Mainland Nova Scotia. However, it is early days, and the company is monitoring developments and engaging with stakeholders.
Q:How do federal tax credits and policy uncertainties influence the timing of solar investments in Florida?
A:Federal tax credits and potential policy uncertainties have led to the acceleration of planned solar investments to realize customer savings earlier and mitigate risks.
Q:What is the status of the Nova Scotia rate case, and how is the company engaging with the government?
A:The rate case is a consensus filing with customer representatives, balancing reliability and affordability. Discussions with the government are ongoing, and the company is preparing for a hearing in January.
Q:What are the company's views on credit metrics and payout ratios, and how do they align with the funding and CapEx plans?
A:The funding plan supports a 50 bps annual improvement in cash flow to debt metrics and a payout ratio towards 80% by 2027. The company is on track with these goals and has stable ratings from Fitch and S&P.
Q:What are the priorities and expectations for the leadership transition at Emera?
A:The leadership transition aims to strengthen the team and ensure succession planning. The company is focused on maintaining strong performance and continuity.
Q:What growth opportunities exist in Florida, particularly in data centers?
A:Emera sees potential in data center growth in Florida, which could support rate base growth and affordability. However, the company is balancing capital investment with customer affordability and execution capacity.
Q:Will Emera extend its EPS guidance to align with the capital plan?
A:The company is likely to stick with a 3-year EPS guidance for now, normalizing for factors like Emera Energy's earnings and foreign exchange rates.
Q:What is the strategic value of the Maritime Link asset?
A:The Maritime Link is considered a strategic asset and an extension of Nova Scotia Power, supporting energy import and regulated by the same authority. There are no current plans for a minority sale.
Q:What is driving the rate base growth in Nova Scotia Power?
A:Investments in reliability, transmission, distribution, and battery storage are driving rate base growth, supporting renewable energy targets and system upgrades.
Q:What is the status of BlockEnergy, and why was there a positive contribution?
A:The positive contribution was due to a favorable settlement on a contract, adjusting for an over-accrual from 2024.
Q:Review of Unclear Management Responses
A:Management avoided providing a direct answer on whether they would extend EPS guidance to align with the capital plan, stating they had not fully decided but would likely stick with a 3-year forecast. Additionally, they did not provide specific details on potential data center opportunities in Florida, only mentioning ongoing discussions without material updates.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Emera
Energy
Florida
Mexico Gas
New Mexico
Nova Scotia
Peoples Gas
Scotia Power
Tampa Electric
USD
addition
asset
capital plan
cash flow
contribution
cost
customer
date
debt
demand
energy
equity
funding
gas
increase
investment
market
need
period
portfolio
rate base
reliability
sale
share
weather
EMA Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
