Algonquin Power & Utilities (AQN) Q1 2026 earnings summary

Executive summary

• Achieved a solid start to 2026 with a focus on operational improvements, regulatory settlements, and advancing strategic priorities, including enhanced gas safety, customer billing accuracy, and onboarding new executive leadership.

• Advanced regulatory proceedings and settlements in Missouri, California, Massachusetts, Arizona, New England Gas, CalPeco Electric, and ESSAL in Chile, supporting the 'Back to Basics' strategy.

• Exploring tax optimization strategies, including a potential redomicile to the U.S. for tax and index inclusion benefits, pending IRS ruling and stakeholder approvals, with 82% of revenues already U.S.-based.

• Closed a $1.15 billion senior unsecured syndicated delayed draw term facility, undrawn and available for refinancing 2026 senior notes.

Financial highlights

• Q1 2026 GAAP net earnings were $83.1 million, down from $92.8 million in Q1 2025; adjusted net earnings were $99.6 million versus $109 million year-over-year.

• Adjusted net EPS was $0.13, down from $0.14, mainly due to non-recurrence of favorable 2025 adjustments and slightly unfavorable weather.

• CalPeco rate case resolution contributed $60.7 million in retroactive revenues, partially offset by $28.5 million in wildfire insurance expenses.

• Operating expenses increased by $41 million, driven by wildfire insurance, gas safety costs, and higher labor and property taxes.

• Regulated Services Group net earnings were $119.4 million, Hydro Group $2.1 million, and Corporate Group posted a net loss of $38.4 million.

Outlook and guidance

• CapEx guidance for 2026 remains at $800 million, with Q1 spend of $88 million reflecting seasonal timing.

• $3.2 billion in regulated capital investment planned from 2026–2028, with rate base expected to grow to ~$9.7 billion by 2028.

• Expectation to refinance $1.15 billion in unsecured notes due June 2026 via a 144A bond issuance or delayed draw credit facility.

• No equity issuances expected through 2027; dividend expected to be maintained at $0.26 per share annually, subject to Board approval.

• Ongoing IRS private letter ruling process for potential U.S. redomicile, with a decision expected in 6–9 months.