May 6 (Reuters) - Eversource Energy ES.N trimmed its forecast for annual profit on Wednesday, following expectations of lower rates for electricity in New England and final approval for the sale of its water utility business.

Shares of the company fell 1.6% after the bell.

The company said its annual earnings would be hit by the Federal Energy Regulatory Commission's decision to lower rates for electricity in New England.

CEO Joe Nolan said the decision was "arbitrary and flawed" and comes as New England needs significant investments to increase power generation.

Regulated utilities like Eversource have been filing requests to increase rates, citing a need for spending on infrastructure as the country's electrical grids face extreme weather and growing demand from industry electrification and data center expansion.

The rapid proliferation of data centers has led to rising electricity prices for a large swath of the country.

"Eversource will continue to vigorously pursue all actions against punitive decisions imposed by our regulators that jeopardize our ability to complete this critical work for customers," Nolan said.

The forecast was also revised after approval for the $2.4 billion sale of its water utility business, which was announced in 2025. The transaction faced regulatory hurdles before finally being cleared earlier this year.

Eversource serves about 4.6 million customers across the U.S. Northeast.

The utility now expects annual adjusted profit to range between $4.57 per share and $4.72 per share, the midpoint of which missed analysts' expectations of $4.68 per share, according to data compiled by LSEG.

It had previously forecast earnings of $4.80 per share to $4.95 per share.

For the first quarter, its net income came in at $606.8 million, or $1.61 per share, compared with $550.8 million, or $1.50 per share, a year earlier.

The rise in quarterly earnings was driven by higher distribution rates across its electric and natural gas segments.