Chesapeake Utilities Corporation

What they do

The company distributes natural gas and electricity to retail customers through subsidiaries including Florida Public Utilities, Pivotal Utility Holdings (doing business as Florida City Gas, acquired from Florida Power & Light on November 30, 2023), Elkton Gas and Central Florida Gas. It also operates FERC-regulated interstate and intrastate transmission through Eastern Shore Natural Gas and Peninsula Pipeline, and unregulated or lightly regulated businesses including Aspire Energy of Ohio, Aspire Energy Express, Marlin Gas Services (compressed natural gas and LNG), Eight Flags (a combined heat and power plant) and propane operations, including assets acquired from Diversified Energy in North Carolina, South Carolina, Virginia and Pennsylvania.

Revenue drivers

• Regulated natural gas distribution — Retail gas distribution in Florida, Delaware, Maryland, Virginia and Ohio, including Florida City Gas; the largest part of the regulated footprint and a primary source of rate-base growth through infrastructure programs such as GUARD.
• Natural gas transmission — Eastern Shore Natural Gas and Peninsula Pipeline provide FERC- and state-regulated transmission service; expansion projects here are cited as a main driver of recent adjusted gross margin growth.
• Propane and unregulated energy services — Propane distribution, including assets acquired from Diversified Energy, plus Marlin Gas Services (CNG/LNG) and Aspire Energy of Ohio; the earnings release cites improved contributions from unregulated businesses.
• Regulated electric — Electric distribution through Florida Public Utilities, a smaller segment within the regulated portfolio.

Recent performance

For the second quarter of 2026, net income was $25.4 million and diluted EPS was $1.05; year-to-date net income was $84.7 million and diluted EPS was $3.51. Adjusted gross margin grew $7.4 million in the quarter and $31.2 million year to date, a 9.6 percent growth rate for the six months ended June 30, 2026, driven largely by transmission expansion projects, regulatory initiatives, infrastructure programs, natural gas organic growth and improved unregulated contributions. Year-to-date adjusted EPS growth was 8.0 percent, excluding FCG transaction and transition-related expenses. Capital investment was $139.7 million in the second quarter and $261.6 million year to date. Quarterly revenue has been uneven, at $353.1 million in 2026-03-31 and $201.9 million in 2026-06-30.

Strategy

Management is increasing 2026 capital expenditure guidance to $550-$600 million, up $100 million, primarily for transmission (including initial spending on the Florida Energy Pathway project), distribution and infrastructure. The Florida Energy Pathway is a $1.2 billion south Florida natural gas pipeline with approximately 250,000 Dts/d of committed capacity and a targeted in-service date in 2030. The company reaffirmed its 2028 earnings guidance of $7.75-$8.00 per share and now expects roughly $1.4 billion of capital investment through 2026 and more than $2.2 billion for the five years ending 2028. It also increased its revolving credit facility to $650 million to support capital growth, and interim rates of $16.2 million annualized took effect in July 2026 in the ongoing Florida City Gas rate case.

Risks

• Capital program execution — The company depends on completing large projects such as the $1.2 billion Florida Energy Pathway on time and at estimated cost, with certification timing and construction risk noted in its forward-looking disclosure.
• Regulatory outcomes — Results depend on state and federal rate proceedings, including the ongoing Florida City Gas rate case where interim rates of $16.2 million annualized are in effect, and on cost recovery for infrastructure programs.
• Weather and demand variability — As a gas and electric utility, results are sensitive to heating and cooling degree-days and to adverse weather such as hurricanes and ice storms in its service territories.
• Financing and interest rates — The business is capital-intensive, with $1.32 billion of long-term debt at June 30, 2026, so access to credit and capital markets on favorable terms affects the funding of its investment plan.

Outlook

Management reaffirmed 2028 earnings guidance of $7.75-$8.00 per share and said it expects capital investment of approximately $1.4 billion through 2026 and more than $2.2 billion for the five-year period ending 2028. It plans to provide a long-term guidance update, including a capital range and EPS growth rate for 2027-2031, during its full-year 2026 earnings call in February 2027. The company is still in discussions with potential partners for the Florida Energy Pathway project.