Algonquin Power & Utilities Cor

Q2 2026 GAAP net earnings were $4.9 million versus $14.8 million in Q2 2025. Q2 adjusted net earnings were $29.2 million versus $33.6 million last year, and adjusted net EPS to common was $0.04 per share, flat year over year. The quarter included a $17.2 million write-down of a regulatory asset tied to the California WEMA proceeding, which management excluded from adjusted earnings. Year to date, GAAP net earnings were $88 million versus $107.6 million in 2025, and adjusted net earnings were $128.8 million versus $142.6 million. For drivers, higher CalPeco approved rates of $12.1 million were partly offset by higher wildfire insurance expenses of $5.7 million, and interest expense increased by $9.3 million. On the regulatory side, Missouri approved $97 million in annualized revenue adjustments effective August 3; Kansas approved an $8.8 million revenue adjustment; California WEMA proposed $58.1 million of wildfire cost recovery; and Apple Valley and Park Water saw a combined $2.7 million revenue reduction with a $3.1 million retroactive true-up. Management said the adjusted net EPS forecast is unchanged, and it expects no equity issuance through 2027.

Rod West framed the quarter as another step toward making Algonquin a "premier, pure-play, regulated utility," emphasizing consistent execution, constructive regulation, and disciplined financial management. He highlighted progress across multiple rate cases, approval for $5 million of AMI grant expense reimbursement, and Missouri CCN approval for a 250-megawatt gas-fired generation project with CWIP treatment. He also said the planned U.S. redomicile would better align the company with its asset footprint, reduce tax friction, broaden capital access, and potentially support index inclusion, while not changing how the utilities operate or serve customers.

Rob Stefani said Q2 adjusted net earnings were $29.2 million versus $33.6 million last year, with flat adjusted EPS at $0.04, and explained that higher rates were partly offset by financing costs, operating expenses, and nonrecurring items from 2025. He pointed to the $17.2 million WEMA-related regulatory asset write-down, the $9.3 million increase in interest expense tied to new debt and higher commercial paper use, and the company’s strong balance sheet. He said Algonquin raised about $1.15 billion at Liberty Utilities Company and used the proceeds to retire $1.15 billion of holding-company notes due June 15, and reiterated that no equity is expected through 2027. On redomiciling, he said the move could eliminate a 5% dividend-related tax on about $200 million of annual dividends and a roughly 10% BEAT-related tax on debt-service cash flows, which he estimated could amount to about 2 to 2.5 cents, or slightly more, on a run-rate basis.

Analysts focused on the U.S. redomicile, asking about IRS discussions, timing, one-time exit tax exposure, and the estimated recurring tax benefits. Management said it filed for a private letter ruling, expects an IRS decision in the back half of the year, and is also planning regulatory filings in multiple jurisdictions; it declined to disclose the one-time cost range but said the recurring savings should outweigh those costs. Questions also centered on Missouri large-load/data-center opportunity, FFO-to-debt cushion, and New Hampshire filing confidence; management said it expects to remain above the S&P downgrade threshold, believes system/data-quality improvements have addressed prior New Hampshire issues, and would not disclose customer-specific pipeline or capacity figures before it is aligned with stakeholders.