Fortis Q2 2025 slides: EPS up 13.4%, maintains $26B capital plan through 2029

Fortis Inc. (FTS) reported robust Q2 2025 earnings, with EPS increasing 13.4% year-over-year to $0.76, driven by rate base growth and strong subsidiary performance. The North American utility reaffirmed its $26 billion five-year capital plan through 2029, projecting a 6.5% compound annual rate base growth to $53 billion, largely in regulated assets. Strategic initiatives, including a substantial data center power agreement and a path to coal-free generation by 2032, support its 51-year dividend growth track record and guidance for 4-6% annual increases, reinforcing investor confidence in its stable, regulated business model.

Analysis

Fortis Inc. (FTS) demonstrated robust financial performance in its Q2 2025 results, reporting a 13.4% year-over-year increase in earnings per share to $0.76. This growth was primarily fueled by rate base expansion and stronger earnings from its regulated subsidiaries, including a $0.04 EPS contribution from U.S. Electric & Gas and $0.03 from Western Canadian operations. The company is executing on its $26 billion five-year capital plan, which is projected to drive a 6.5% compound annual growth rate in its rate base to $53 billion by 2029, with nearly all investments directed towards regulated assets, enhancing earnings predictability. A significant new growth catalyst has emerged with a power agreement for an Arizona-based data center, initially demanding 300 MW with potential for substantial expansion. This complements the company's established commitment to shareholder returns, underscored by a 51-year history of dividend increases and explicit guidance for 4-6% annual dividend growth through 2029. While the outlook is strong and supported by investment-grade credit ratings, future returns are contingent on the outcomes of pending rate applications for its Tucson Electric Power and Central Hudson subsidiaries.

Key Decisions for Investors

• Given the predictable earnings from its regulated asset base and a clear 6.5% rate base CAGR outlook, FTS warrants consideration as a core holding for portfolios focused on stable growth and income.
• Investors should closely monitor the progress of the Arizona data center power agreement, as its potential expansion represents a material growth opportunity beyond the company's baseline forecast.
• The 51-year track record and explicit guidance for 4-6% annual dividend growth through 2029 make the stock particularly attractive for dividend-growth and income-focused strategies.
• The outcomes of the pending General Rate Applications for Tucson Electric Power and Central Hudson are key upcoming catalysts that will directly impact the company's ability to earn its allowed returns on capital, and should be monitored closely.