Emera (EMA) Q3 2026 earnings review
Emera lifts its growth target, but new shares fund it
Emera's utilities earned more, but head-office costs and a larger share count left profit per share slightly lower. Profit per share excluding one-offs slipped 3% to $0.85, though by our math it rose about 3% without a hedge timing loss. Chief executive Scott Balfour unveiled a bigger five-year investment plan and a higher growth target, funded partly by new shares.
| Profit per share, excluding one-offs | $0.85 −3% from a year ago; +3% without the hedge timing, by our math |
|---|---|
| Five-year investment plan | $21.5B up $1.1B from the previous plan |
| Rate base growth outlook | 7.5–8.5% a year 7–8% in the previous plan |
| New shares to fund the plan | ~$600M a year 10–15% of funding |
⚖️ Verdict: 🟢 Bullish
The story got better because the investment plan and the growth target both rose, and the rating agencies eased their downgrade lines. The bad news: with asset sales finished, new shares now fund a bigger slice of the plan, and Emera will not say until February what that means per share.
The question now is whether faster rate base growth reaches shareholders after Emera counts the extra shares. If data centers and the merger spread costs over more demand, profit per share keeps pace; if not, new shares absorb much of the growth. February's restated profit target will tell.
🐂 Bull Case
Emera Raises Its Five-Year Investment Plan
Emera earns a regulated return on the power and gas assets it builds, so the size of its investment plan sets its growth. Chief executive Scott Balfour unveiled a new five-year plan of $21.5 billion, up $1.1 billion.
Balfour said the rate base, the assets regulators let Emera earn on, should grow 7.5% to 8.5% a year, up from 7% to 8%. The largest project is a 720 megawatt rebuild of the Big Bend 4 plant.
- Florida share: about 82%, or $17.5 billion
- Years 2027 to 2030: $930 million above the previous plan by our math, with 2027 alone up $500 million
This matters because every dollar added to the rate base earns a regulated return. Balfour said "the investment opportunities are outpacing that kind of growth, at least in the short term". But the comparison flatters a little: the window moved forward a year, and the target now starts from 2025, not 2024.
What to watch: the profit growth target Emera restates in February, once it counts the plan's share issuance. A target still at 5% to 7% would confirm the bigger plan reaches shareholders.
Credit Agencies Give Emera More Room
Emera carries about $21.6 billion of debt, and its thin credit cushion was the standing worry. Moody's downgrade line sat at 12% cash flow to debt, which Emera only expected to reach this year.
Finance chief Jared Green said "Moody's recently lowered our downgrade threshold from 12% to 11%", citing lower business risk. Fitch will follow once the merger closes, Green said.
This matters because a wider cushion means a storm or a rate setback no longer forces an emergency share sale. But 12% is still a plan, and the agencies count hybrid notes only half as equity.
What to watch: the year-end cash flow to debt ratio in February. At 12% or more, a full point would separate Emera from the downgrade line.
Tampa Electric Nears Its First Data Center Contract
Tampa Electric, Emera's Florida utility, says data centers can lower bills for everyone if they pay their way. On September 30 it filed a tariff for customers taking up to 1,000 megawatts.
Balfour said Tampa Electric has studied about 1,300 megawatts of potential demand and aims to sign the first 350 by year-end at Hillwood's Auburndale site. "The buildings are built," its management said; Green put connection costs "in the tens of millions of dollars".
Balfour said "each additional 100 MW represents approximately 2% growth in system demand". The plan counts only the first 350 megawatts, so anything more is growth not yet in the numbers.
What to watch: a signed Hillwood contract by year-end and the tariff decision in early 2027. Both would turn the pipeline into rate base.
🐻 Bear Case
New Shares Will Pay for the Bigger Plan
Emera funds its plan with cash from operations, utility debt and new shares. Green said that "despite the increase in capital, our funding strategy remains largely unchanged". The numbers say otherwise.
"Equity will continue to play a small role in our funding plan," Green said. That role is now about $600 million a year, "with issuances weighted towards the 2027 through 2029 period", since asset sales have ended.
- Shares outstanding: 307.7 million on average, up 2.6% from a year ago
- Profit excluding one-offs this quarter: down 1%; per share, down 3%
- Hybrid notes: about $1.25 billion, which the rating agencies count half as equity
Rate base growth only reaches shareholders after Emera counts the new shares. Its own target already turns 7% to 8% rate base growth into 5% to 7% profit growth; more shares widen that gap. Green said it was too early to say what the plan means for that target.
What to watch: the restated profit target in February, after $600 million a year of share sales. A target at the bottom of 5% to 7% would mean shareholders fund growth they do not fully receive.
Head-Office Costs Ate the Utilities' Growth
Emera's utilities earned more this quarter, but the holding company's own costs rose faster. Earnings before corporate costs rose 5% to $376 million. Corporate costs climbed to $116 million from $96 million.
- Corporate operating costs: $32 million, double a year ago, on a hedge loss and New York listing costs
- Incentive hedge timing: a $0.06 per share swing against last year
The hedge loss is timing and reverses, so by our math profit per share rose about 3% without it. Interest does not: it is up $31 million this year, because debt grew despite the New Mexico Gas proceeds.
What to watch: fourth-quarter corporate costs. A quarter where the hedge timing reverses but interest still grows would show how much of the drag is permanent.
Nova Scotia Power Still Misses Its Allowed Return
Nova Scotia Power, Emera's Canadian utility, may earn 8.75% to 9.25% on equity. But it "anticipates earning below its allowed ROE range in 2026", the filing said. Profit so far this year is $87 million, down from $119 million. The quarter's gain leaned on $12 million of deferred financing costs.
The utility has asked to securitise about $1 billion of retiring coal plant and other costs, which Balfour said saves customers about $265 million. The province also ordered a study of performance-based regulation, which Balfour said must recognise "earning a fair return and the financial health of the utility".
What to watch: the securitisation decision, due by early December, and the 2.5% rate rise on January 1. Both would give it a chance to earn its allowed return next year.
Risks This Quarter Didn't Answer
Two standing concerns got no decisive reading this quarter, because the events that would test them fall in the fourth quarter or later. Each item below names the reading that would move it.
- Florida concentration: 82% of the plan sits in one state. Weather cost $0.04 a share at Tampa Electric this quarter. The Florida Supreme Court heard the 2024 rate case appeal on October 7 and has not ruled.
- Trading and currency: Emera Energy Services lost $3 million this quarter. Its outlook of USD 60 million to 80 million needs a strong fourth quarter. A weaker Canadian dollar added $2 million, and Emera has hedged only 52% of next year's US earnings.
👓 Other Themes
Emera and Canadian Utilities Set a 2027 Closing
Emera announced on October 6 an all-share deal to buy Canadian Utilities and ATCO, valued at about $14.3 billion. Emera holders would own 60.8% of the combined company. Balfour called it "positioning us for the growth ahead" in Alberta. The main filing went to the Alberta Utilities Commission on October 27, and the companies expect to close in the second half of 2027. Deal costs were $5 million this quarter.
Emera Has Finished Selling Assets
Emera closed the New Mexico Gas sale in August for $940 million in cash and a $12 million gain after tax. It sold Grand Bahama Power in May at a $24 million loss. Green said "We are no longer forecasting proceeds from asset sales in this plan". Two appeals of the New Mexico approval sit with the state's Supreme Court, with a decision on a threshold issue expected in 2027.
💲 Other KPIs
Tampa Electric's profit slipped in US dollars, to $217 million from $220 million, though it rose in Canadian dollars. Growth has slowed from 20% a year ago as last year's rate rise laps. This quarter, weather cost $0.04 a share and a settlement cut fuel recovery by $10 million.
Cash from operations before working capital rose 7% to $2,113 million in nine months. Reported operating cash flow was $2,428 million because working capital added $315 million, mostly fuel over-recoveries at Tampa Electric that customers get back later. Capital spending of $2,748 million still exceeded both figures.
Total debt edged up $124 million since December despite $940 million of cash from the New Mexico Gas sale, because capital spending outran cash flow. Cash on hand was $600 million. By our math the holding company carries about 34% of the debt, against a stated aim of below a third.
🔮 Guidance
Unchanged. The plan still calls for two-year growth above 7% from the 2024 base. By our math that is a floor of about $3.37 for the year. After $2.90 in nine months, the fourth quarter needs only about $0.47. That compares with $0.55 a year ago, so the outlook tolerates a 15% drop while still reading as growth.
Unchanged. Emera kept the 5% to 7% target and will restate it from a new starting point in February. Last year's profit per share was $3.49. By our math the range for 2030 then needs only 2.5% to 5% a year from here, so the target is easier than it reads.
Raised. Emera now expects the rate base to grow 7.5% to 8.5% a year, up from 7% to 8%. The base year moved to 2025, so last year's 8% rise drops out. By our math the yearly path runs about 10% this year and slows to 6% by the end of the plan. The range describes the average, not the finish.
Raised. The plan is $1.1 billion, or 5%, above the one it replaces. It is the third raise in three updates and the largest: +$0.16B, +$0.24B, +$1.07B. The window also moved forward a year. On the overlapping years the increase is $930 million by our math, most of it in 2027.
Unchanged. Emera has spent $2.8 billion in nine months. By our math the fourth quarter needs about $1.2 billion, a fifth more than the third quarter. Spending has stepped up each quarter this year, so the plan looks reachable.
Unchanged. The board lifted the annual rate by 1% to $2.96, the twentieth straight increase and the bottom of the range. Balfour said "It's too soon to be thinking about changing the dividend growth rate." The slow rise is deliberate: dividends were 76% of profit excluding one-offs in the first nine months.
New. Green said reinvested cash flow stays the largest source and new shares a small one. But the asset sales that helped fund the last plan have ended, so share issuance rises in dollars and falls mostly in 2027 through 2029. Hybrid notes of about $1.25 billion fill the rest, which the rating agencies count half as equity.
❓ Key Questions
How much of the bigger plan is currency?
Every 5 cents on the exchange rate moves the five-year total by about $695 million, and the plan assumes a stronger Canadian dollar than today's. Readers need the increase at a constant rate to judge the real raise.
Is holding-company debt above the one-third ceiling?
The presentation puts holding-company debt at about 34% of the total by our math, while the funding slide says the aim is below 33%. Emera should say which measure it uses and how the hybrids count.
What profit growth does the new plan deliver per share?
Emera will restate its profit target in February. With about $600 million a year of new shares, the number that matters is growth per share, not rate base growth.
How large can the Auburndale data center site become?
Tampa Electric said the site can take 700 megawatts and may reach 1,000. The capital, timing and rate base effect beyond the first 350 megawatts are not in the plan.
Will Nova Scotia Power earn its allowed return in 2027?
The 2.5% rate increase and the securitisation both start in January. Emera has not said whether, together, they close the gap to the 8.75% to 9.25% allowed range.