Algonquin Power & Utilities’ Investor Day Disappoints on EPS Outlook

Algonquin Power & Utilities Corp. (NYSE:AQN) is a company that operates in the utility sector, focusing on providing electric power. Recently, AQN has been transitioning to a pure-play utility by selling its Renewables and Atlantica divisions. This strategic shift aims to streamline operations and focus on core utility services, positioning the company for future growth.

On March 7, 2025, AQN reported earnings per share (EPS) of $0.06, missing the estimated $0.10. This represents a 25% negative surprise compared to the Zacks Consensus Estimate of $0.08. The EPS also marks a significant decline from the $0.16 reported in the same quarter last year, highlighting the company's ongoing financial challenges.

AQN's revenue for the quarter was $584.8 million, falling short of the estimated $644.7 million. This revenue miss is consistent with the company's recent performance, as it has failed to meet consensus revenue estimates over the last four quarters. The reported revenue also decreased from $666.9 million a year ago, indicating a downward trend in sales.

The price-to-sales ratio is about 1.35, meaning investors pay $1.35 for every dollar of sales. Additionally, the enterprise value to sales ratio is 4.23, and the enterprise value to operating cash flow ratio is 17.17, indicating valuation challenges.

AQN's financial health is also impacted by its debt levels. The debt-to-equity ratio stands at about 1.54, suggesting a relatively high level of debt compared to equity. The current ratio is approximately 0.92, indicating potential difficulties in covering short-term liabilities with short-term assets. These financial metrics underscore the challenges AQN faces as it navigates its transition to a pure-play utility.

Algonquin Power & Utilities Corp. (NYSE:AQN) is a company that operates in the utility sector, focusing on providing electric power. Recently, AQN has been transitioning to a pure-play utility by selling its Renewables and Atlantica divisions. This strategic shift aims to streamline operations and focus on core utility services, positioning the company for future growth.

On March 7, 2025, AQN reported earnings per share (EPS) of $0.06, missing the estimated $0.10. This represents a 25% negative surprise compared to the Zacks Consensus Estimate of $0.08. The EPS also marks a significant decline from the $0.16 reported in the same quarter last year, highlighting the company's ongoing financial challenges.

AQN's revenue for the quarter was $584.8 million, falling short of the estimated $644.7 million. This revenue miss is consistent with the company's recent performance, as it has failed to meet consensus revenue estimates over the last four quarters. The reported revenue also decreased from $666.9 million a year ago, indicating a downward trend in sales.

The price-to-sales ratio is about 1.35, meaning investors pay $1.35 for every dollar of sales. Additionally, the enterprise value to sales ratio is 4.23, and the enterprise value to operating cash flow ratio is 17.17, indicating valuation challenges.

AQN's financial health is also impacted by its debt levels. The debt-to-equity ratio stands at about 1.54, suggesting a relatively high level of debt compared to equity. The current ratio is approximately 0.92, indicating potential difficulties in covering short-term liabilities with short-term assets. These financial metrics underscore the challenges AQN faces as it navigates its transition to a pure-play utility.

Analysts at RBC capital believe that investors positively viewed the significant growth in the 5-year capital plan of Algonquin Power & Utilities Corp. (NYSE:AQN) during the investor day, but were disappointed by the 2022 and 5-year EPS outlook. Management released its 2022 EPS guidance range of $0.72-0.77, which compares to the consensus estimate of $0.78. Management noted that due to the above-average EPS growth in 2021, the 7-9% EPS CAGR in the 2022-26 period is consistent with the 8-10% EPS CAGR in the 2021-25 period.

The company rolled forward its 5-year capital plan, which totals $12.4 billion, up from last year's 5- year capital plan of $9.4 billion, which is higher than what the analysts expected given that $3.4 billion was already invested in the first nine months of 2021.

Analysts at RBC capital believe that investors positively viewed the significant growth in the 5-year capital plan of Algonquin Power & Utilities Corp. (NYSE:AQN) during the investor day, but were disappointed by the 2022 and 5-year EPS outlook. Management released its 2022 EPS guidance range of $0.72-0.77, which compares to the consensus estimate of $0.78. Management noted that due to the above-average EPS growth in 2021, the 7-9% EPS CAGR in the 2022-26 period is consistent with the 8-10% EPS CAGR in the 2021-25 period.

The company rolled forward its 5-year capital plan, which totals $12.4 billion, up from last year's 5- year capital plan of $9.4 billion, which is higher than what the analysts expected given that $3.4 billion was already invested in the first nine months of 2021.