Chesapeake Utilities Corporation Reports Record 2025 Results with 12% Adjusted EPS Growth, Major Capital Investments, and 2026 Outlook

Chesapeake Utilities Corporation Reports 2025 Financial Results: Robust Growth, Major Projects, and 2026 Outlook

Key Financial Highlights for Investors

Record Earnings and Profit Growth: Chesapeake Utilities Corporation (NYSE: CPK) delivered exceptional financial results for fiscal year 2025. Diluted earnings per share (EPS) reached \$5.97, up from \$5.26 in 2024. Adjusted EPS, which excludes acquisition-related expenses from the Florida City Gas (FCG) deal, came in at \$6.01, marking an 11.5% increase year-over-year. For Q4 2025 alone, EPS was \$1.93, with adjusted EPS at \$1.94.
Strong Net Income and Margin Expansion: Net income for 2025 was \$140.3 million, up from \$118.6 million the prior year. Adjusted net income reached \$141.1 million. The company’s adjusted gross margin surged by \$71.1 million, primarily due to regulatory initiatives, infrastructure programs, organic natural gas growth, transmission expansion projects, and robust demand in Marlin’s services.
Record Capital Expenditure: Chesapeake Utilities invested a record \$470.4 million in capital spending in 2025, including over \$100 million in projects that will drive future earnings beginning in 2026.
Solid Capital Structure and Guidance: The company’s equity to total capitalization ratio approximated 50% at year-end, returning to its target structure ahead of schedule, even with increased capital spending. Management reaffirmed five-year (2024–2028) capital expenditure guidance of \$1.5–\$1.8 billion and 2028 EPS guidance of \$7.75–\$8.00 per share. For 2026, capital expenditures are projected in the range of \$450–\$500 million.

Key Drivers of Growth and Performance

Customer Growth: The company posted strong residential customer growth—4.1% in Delmarva and 2.8% in Florida.
Project Execution: Ten transmission capital projects went online in 2024 and 2025, delivering \$18.8 million in incremental adjusted gross margin (\$0.58 EPS).
Infrastructure Investment: \$121.2 million was invested in infrastructure, adding \$13.8 million in gross margin (\$0.43 EPS).
Regulatory Success: The completion of three rate cases in Delaware, Maryland, and Florida Electric contributed \$12.6 million in incremental margin (\$0.39 EPS).
Higher Consumption and New Services: Higher customer consumption and increased demand for CNG/LNG/RNG services provided further boosts to gross margin and earnings.

Major Projects and Strategic Initiatives

Pipeline Expansions: Significant projects include the Worcester Resiliency Upgrade (approved by FERC, in construction, expected mid-2026), Boynton Beach and New Smyrna Beach expansions (Florida PSC approved; New Smyrna Beach in service May 2025, Boynton Beach completion Q2 2026), Central Florida Reinforcement (Plant City completed Q4 2024; Lake Mattie in service July 2025), and the Miami Inner Loop (infrastructure build-out in Miami-Dade, interim services began August 2025, permanent facilities expected Q2 2026).
Renewable Natural Gas (RNG) Integration: Multiple RNG supply pipeline projects in Florida are underway, supporting FCG’s distribution system and expected to complete in the second half of 2026.
Duncan Plains Pipeline (Ohio): Agreement with American Electric Power to construct an intrastate pipeline for a new fuel-cell facility serving a data center, with service expected in 2027.

Regulatory and Rate Case Developments

Maryland Natural Gas Rate Case: A \$3.5 million cumulative annual base rate increase and consolidation of Maryland operations into Chesapeake Utilities of Maryland, Inc., were approved in 2025.
Delaware Natural Gas Rate Case: Approval for a \$6.1 million annual revenue increase, with rates effective March and October 2025.
Florida Electric Rate Case: Settlement approved for an \$8.6 million annual base rate increase, with potential for a further \$0.7 million increase pending completion of substation projects in December 2026.
Florida Mandatory Relocates: FPU and FCG received approval to establish a surcharge to recover costs for facility relocations, effective March 2026.
Pending Florida City Gas Rate Case: FCG intends to file for a general rate base increase in April 2026, with outcome subject to Florida PSC review.
Depreciation Studies: In 2025, FCG’s revised depreciation rates and a \$6.8 million reserve imbalance amortization were approved by the Florida PSC.

Operational and Financial Metrics

Segment Performance: Both regulated and unregulated energy segments posted strong adjusted gross margin growth (up 12.5% and 12.8%, respectively).
Higher Operating Expenses: Increases in depreciation, payroll, facilities, insurance, and credit costs were noted, largely associated with the company’s aggressive growth and project pipeline.
Balance Sheet Strength: As of December 31, 2025, total assets stood at \$3.99 billion, with equity at \$1.60 billion and long-term debt at \$1.33 billion. The company maintained a healthy capital structure, with a target equity-to-capitalization ratio between 50% and 60%.
Customer and Revenue Growth: Average residential customer counts and revenue increased across the Delmarva, Florida Natural Gas, and FPU Electric divisions. Operating revenue for 2025 reached \$930 million (up from \$787 million in 2024).

2026 Outlook and Guidance

Capital Expenditure Forecast: Management projects 2026 capital expenditures between \$450 million and \$500 million, with continued investment in regulated distribution, transmission, infrastructure, technology, and unregulated businesses.
Earnings Guidance Reaffirmed: Five-year capital expenditure guidance (\$1.5–\$1.8 billion) and 2028 EPS target (\$7.75–\$8.00) are reaffirmed, signaling confidence in sustained long-term growth.

Management Commentary

“We started the year with a simple mission: deliver with purpose and reach new heights, so I’m proud that our full-year performance and results demonstrate exactly that. We provided safe and reliable energy to over 450,000 customers, were active members of our communities, invested a record-breaking \$470 million of capital, and achieved nearly 12 percent year-over-year Adjusted EPS growth,” said Jeff Householder, Chair, President and CEO. “Looking forward to 2026, I am excited about the opportunities ahead as we build on the blueprint we’ve established and leverage the capabilities of our team to continually transform the Company for future growth.”

Potential Share Price Sensitivities and Investor Considerations

Continued Record Capital Deployment: Aggressive capital spending, particularly in regulated and high-growth markets, is likely to drive future earnings and may be viewed positively by the market.
Regulatory Success and Rate Case Outcomes: Recent and pending rate cases in Maryland, Delaware, and Florida Electric divisions, as well as the upcoming FCG rate case, could materially impact future revenue and profitability.
Integration and Realization of FCG Acquisition: Exclusion of integration costs from adjusted results highlights the company’s focus on underlying profitability. Successful realization of expected synergies could positively impact valuation.
Growth in Renewable Energy and Infrastructure: Investment in renewable natural gas and new pipeline projects positions Chesapeake Utilities for long-term growth in sustainable energy, potentially attracting ESG-focused investors.
Exposure to Weather and Consumption Trends: 2025 results were positively affected by colder weather and increased energy consumption. Variations in these factors could impact future performance.
Balance Sheet Discipline: Maintaining a strong equity ratio and prudent capital management supports credit quality and financial flexibility.

Conference Call and Further Information

Chesapeake Utilities will host a conference call on Thursday, February 26, 2026, at 8:30 a.m. ET to discuss the financial results. Investors may access the webcast via the company’s investor relations page. Contact details for the executive team and investor relations are provided for further inquiries.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors should consult the company’s SEC filings and their financial advisors before making any investment decisions. Past performance is not indicative of future results. The company’s forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected.