Fortis (FTS) delivered a clean third-quarter beat, but the earnings were the smaller part of the story. On Earnings Whispers' normalized basis, the company earned $0.66 per share on $2.226 billion in revenue. That topped the $0.63 consensus by 4.8% and the $2.17 billion revenue estimate by 2.6%. Earnings grew 11.9% year over year and revenue rose 4.3%. The bigger development was a new $32.2 billion 2027-2031 capital plan, $3.4 billion larger than its predecessor and the biggest in company history. It lifts targeted rate base growth to 7.5% from 7%. That is the central tension: the growth runway lengthened meaningfully, but funding it now explicitly involves issuing new equity, something management had previously avoided.

Investors comparing figures should note a reporting difference. Fortis reports in Canadian dollars, posting net earnings of C$474 million, or C$0.92 per share, against C$0.81 a year ago. The normalized $0.66 appears to reflect a U.S.-dollar presentation. The quality of the year-over-year comparison also deserves scrutiny. Last year's third quarter absorbed a C$32 million (C$0.06 per share) tax and closing charge on the FortisTCI sale. On management's adjusted basis, EPS rose a more modest C$0.05, to C$0.92 from C$0.87. That adjusted gain was driven by rate base growth and stronger retail electricity sales at UNS Energy, with some help from the timing of operating costs. Several factors offset it:

• the 2025 sales of FortisTCI and Fortis Belize, which diluted adjusted EPS by C$0.02;
• higher holding-company finance costs;
• a larger share count from dividend reinvestment and the at-the-market (ATM) program;
• costs tied to rate base growth not yet reflected in customer rates.

Still, the quarter shows improvement in pace. Year-to-date adjusted EPS is up only C$0.06, so the third quarter supplied nearly all of the 2026 gain after a flat first half.

The call marked a clear step up from the 'on track' messaging of recent quarters. CEO David Hutchens called it one of the busiest and most positive quarters. The plan increase is concentrated in a few areas:

• **ITC transmission:** five-year capex rose $1.7 billion to $11.6 billion, supporting an 8.6% rate base growth rate. MISO awarded ITC the competitively bid Iowa project worth roughly US$1.0 billion, about half of which is in the plan. Its large-load interconnection pipeline grew to 10 GW from 8 GW.
• **FortisBC:** capex rose $1 billion to $6 billion, lifting its rate base growth to 7.9% from 6%. Tilbury jumped from roughly $350 million in the plan to the $1.7 billion Phase 1B expansion plus up to $1.1 billion for the LNG storage tank.
• **2026 spending:** capex was raised to about C$6.0 billion from C$5.6 billion as major projects were pulled forward.

Optionality beyond the plan remains substantial. ITC sees US$2.9-3.4 billion in further MISO Tranche 2.1 work, a range trimmed partly because some of it moved into the plan. Environmental approval for Tilbury Phase 2 opens a C$2-4 billion liquefaction opportunity, mostly after 2031. In Arizona, TEP's new resource plan assumes 5.7% annual sales growth and identifies above-plan upside. The Arizona data-center opportunity was, however, reframed somewhat smaller, at up to US$1.5 billion in a high-growth scenario.

Bears have legitimate ammunition on the funding side. Fortis issued about C$260 million of ATM equity and US$1.0 billion of junior subordinated notes in the quarter. It plans roughly C$250 million more equity over the next 12 months and intends to re-establish the ATM program in early 2027. That dilution helps explain why EPS growth trails the rate base growth rate, and why dividend guidance sits at 4-6%.

Regulatory risk is also meaningful:

• **TEP rate case:** the administrative law judge's recommended order is constructive. It proposes a 9.65% ROE, a 55.5% equity ratio and a formula-rate mechanism, an improvement on current terms though short of the 9.75% ROE request. Final Arizona Corporation Commission approval is still pending.
• **Regulatory lag:** TEP's lag persists until the first formula adjustment in April 2028.
• **Other headwinds:** UNS wholesale margins remain weak, the Alberta rate-framework appeal was dismissed, and political backlash against data centers could temper some load-growth assumptions.

The market entered the report already leaning optimistic. Shares closed at $59.29 the day before the release, up 3.9% since the open after the July report. That put the stock 6% above its 200-day moving average and just 0.3% below a 52-week high set on November 2. It had rallied 13.6% from its October 1 low. Earnings Whispers trend signals are broadly positive across price, sequential growth, momentum and AVWAP. Investor sentiment, however, cooled, remaining positive but slipping from 0.26 to 0.16 heading into the print. With the stock pressing its highs, the market setup is more demanding than a routine utility beat would suggest.

The bottom line is that Fortis used the quarter to materially extend its growth visibility, with a larger plan, faster rate base growth, a 4% dividend increase and dividend guidance extended through 2031. Management is even considering issuing EPS guidance once the TEP case is resolved. The trade-off is a return to equity issuance and continued regulatory lag in Arizona, which will keep per-share growth below rate base growth. For a stock already trading at its highs with softening sentiment, the next tests are the final ACC decision and evidence that the expanded plan can be funded without eroding the earnings growth investors are now paying for.