H2O America Narrows Standalone 2026 Adjusted EPS Guidance to $3.10-$3.16 and Sets Deal-Inclusive Range of $2.91-$2.97

H2O America narrowed 2026 standalone adjusted diluted EPS guidance to $3.10-$3.16 from $3.08-$3.18 and set a first deal-inclusive range of $2.91-$2.97, below the organic number because the acquisitions and their financing are initially dilutive. The utility reported third-quarter net income of $43.0 million, or $0.99 a diluted share, as operating revenue rose 4% to $250.2 million from $240.6 million.

The third quarter ran on two tracks: revenue kept climbing with rates, while per-share earnings fell because there are far more shares. Guidance for the year now comes in two versions, one before the acquisitions and one after.

A larger diluted share count turns a modest profit dip into a double-digit EPS slide

GAAP net income fell 5% to $43.0 million from $45.1 million a year earlier, while diluted EPS dropped to $0.99 from $1.27 even though net income fell only modestly, because the diluted share count was 21.98% higher. Weighted-average diluted shares were 43,478,365, up from 35,643,826, reflecting an at-the-market program run through 2025 and a common stock issuance in early March 2026. Adjusted net income, which excludes merger, acquisition and integration costs and non-utility real estate gains, was $45.2 million against $45.5 million a year earlier, a decrease of 1%. Adjusted diluted EPS fell 18.11% to $1.04. The arithmetic is the share count: adjusted net income was barely changed, while diluted shares were 21.98% larger than a year earlier. The nine-month figures show the same split: adjusted net income of $95.3 million was an increase of 8% from $88.4 million, while adjusted diluted EPS fell to $2.30 from $2.53.

Revenue growth came mostly from rates: $16.2 million of increases, nearly half of it pass-through water costs, partly offset by $4.1 million of lower customer consumption and $2.6 million of regulatory mechanism adjustments. Operating expenses rose 8% to $189.7 million from $175.9 million, including $5.0 million more for water production, $3.7 million more of depreciation and amortization and $3.1 million more of merger and acquisition costs tied to Quadvest, most of the gap between the 5% decline in reported net income and the 1% decline in adjusted net income.

Guidance holds a $3.13 midpoint while the deal-inclusive range starts lower

The standalone 2026 adjusted diluted EPS range of $3.10-$3.16 keeps the $3.13 midpoint of the original $3.08-$3.18 guide, a range H2O America had reiterated in July. The new range of $2.91-$2.97 folds in Quadvest, which closed October 1, and the pending Cibolo Valley purchase together with their financing; its $2.94 midpoint is 6.07% below the standalone midpoint. Both ends of the deal-inclusive range sit below 2025's adjusted diluted EPS of $2.99, and the standalone range measured against that base works out to 3.68% to 5.69% growth.

"With the close of the Quadvest acquisition on October 1, we are providing 2026 adjusted diluted EPS guidance of $2.91-$2.97," the release says, adding that the deals "will be initially dilutive to EPS prior to our ability to implement new rates reflecting the ratemaking rate bases of the acquired assets". A consolidated Texas general rate case is expected in the first half of 2027.

H2O America also affirmed a 6-8% long-term adjusted diluted EPS compound growth target anchored off 2025's $2.99 and said it still expects to deliver at or above the top of that range over 2026-30. A year earlier the company had guided 2025 to $2.95 to $3.00 and targeted 5% to 7% growth through 2029 off 2022's $2.43, so the long-term frame has since been re-based.

Capital plan trimmed as Quadvest connections move onto the books

Infrastructure investment through September 30, 2026 was $325.1 million, and the company cut its full-year 2026 company-funded capital plan to approximately $465 million from $483 million, citing more developer-funded capital at the Texas subsidiary, partly offset by Quadvest capex now inside the plan. The $2.7 billion total planned for 2026-30 is unchanged.

Quadvest closed for $542.7 million of cash and had 62,200 active connections at September 30, up 7,700, or 14%, in the first nine months of 2026, against 7,400, or 16%, for the whole of 2025; connections under contract and pending development grew by 11,300 to more than 98,000 since December 31, 2025. H2O America expects Texas to rise from 8% of its consolidated customer base at the end of 2025 to 26% by 2029.

Rate cases carry the recovery story into 2027

Connecticut Water asked for $28.8 million of annual revenue to recover about $145 million of investment; evidentiary hearings finished earlier this month and a proposed decision is expected in mid-December, ahead of new rates in February 2027. Maine Water seeks $9.5 million for roughly $36 million of investment, with new rates expected by the second quarter of 2027, and San Jose Water's $176 million PFAS project has a proposed decision expected in the same quarter.

Texas went the other way: the October 1 order on the system improvement charge produced a $200,000 decrease in annual revenue against the $5.1 million increase sought. Cibolo Valley, cleared by regulators in September, is expected to close November 2, 2026.

A steady $0.44 dividend and the dates that decide the rest of the year

The board declared a $0.44 quarterly dividend on October 23, payable December 1 to holders of record November 9. That keeps the annualized rate at $1.76, compared with $1.68 in 2025; the nine-month figure of $1.32 a share shows the higher quarterly rate was already in place before this declaration, and the company counts the streak at 58 consecutive years of increases.

Management reviews the quarter on a webcast at 10 a.m. Eastern on October 27, 2026. After that, the dated markers are the Cibolo Valley close on November 2, the Connecticut proposed decision in mid-December and a Texas general rate case filing in the first half of 2027.