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01/11 03:34
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The company reported a strong EPS increase and reaffirmed its earnings guidance, suggesting financial stability. The dividend track record and new partnerships with major companies like Meta and Microsoft are positive indicators. The Q&A revealed confidence in growth, particularly in data centers, despite some uncertainties. The stable insurance costs and recovery from outages further support a positive outlook. Given the market cap, the stock is likely to experience a moderate positive movement of 2% to 8%.
Earnings Per Share (EPS) for Q2 2025 $0.38 per share, a 15.15% increase from $0.33 per share in Q2 2024. The increase was driven by new margins, including $0.17 of new rates and rider recovery, which offset higher operating expenses, financing costs, and depreciation expenses.
Year-to-date EPS for 2025 $2.24, a 2.28% increase from $2.19 in the same period of 2024. This was due to $0.49 of new rates and rider recovery and $0.14 of weather favorability, which offset $0.29 of higher O&M, $0.24 of higher financing costs, and $0.07 of higher depreciation expense.
Wyoming Electric Peak Load 379 megawatts in June 2025, a 21% increase from 2024 and a 10% increase from earlier in Q2 2025. This growth was attributed to increased demand from data center and blockchain customers.
Ready Wyoming Transmission Project Costs $350 million, with $40 million already placed in service and recovered through Wyoming transmission rider. The remaining costs will be recovered starting January 2026.
Kansas Gas Rate Review Revenue Increase $10.8 million annually, effective August 1, 2025. This increase supports safety and reliability-focused rider and includes a new insurance cost tracker.
Nebraska Rate Review Revenue Request $35 million annually, with interim rates effective August 1, 2025. Final rates are expected by Q1 2026.
Ready Wyoming transmission expansion: 260-mile $350 million project on track for completion by year-end, enhancing system resiliency and reducing reliance on third-party transmission.
Lange II generation project: 99-megawatt natural gas-fired generation resource in South Dakota, expected to be operational in the second half of 2026.
Colorado Clean Energy Plan: Includes 350 megawatts of renewable resources (100 MW solar, 50 MW battery storage, 200 MW solar PPA) to reduce emissions by 80% by 2030.
Data center and blockchain demand: Wyoming Electric recorded a 21% increase in peak load due to growing demand from data centers and blockchain customers. Meta and Microsoft are key contributors, with Meta's new data center expected to begin operations in 2026.
Pipeline for data center demand: Developing plans to serve over 1 gigawatt of demand, including a new data center in Southeast Wyoming by Crusoe and Tallgrass.
Wildfire mitigation: Launched an emergency Public Safety Power Shutoff program to mitigate wildfire risks, involving proactive de-energizing of power lines in high-risk areas.
Regulatory strategy: Seven rate reviews since 2024, recovering over $1.3 billion in new system investments. Recent approvals include Kansas Gas rate review and active Nebraska rate review.
Capital investment plan: $4.7 billion capital plan through 2028, focusing on safety, reliability, and growth, with annual investments of $700-$750 million.
Earnings growth: Reaffirmed 2025 EPS guidance of $4-$4.20, representing 5% growth over 2024, with long-term EPS growth target of 4%-6% starting in 2026.
Unplanned Generation Outages: The company experienced approximately $5 million in additional pretax O&M costs related to unplanned generation outages, which impacted operational expenses and required offsetting measures.
Higher Operating and Financing Costs: The company faced $0.05 per share of higher O&M driven by increased insurance premiums and unplanned outages, $0.08 per share of higher financing costs, and $0.04 of higher depreciation expense from new assets placed in service.
Wildfire Risk: The company has implemented an emergency Public Safety Power Shutoff program to mitigate wildfire risks, reflecting the potential operational and safety challenges posed by extreme weather conditions.
Regulatory and Rate Review Challenges: The company is actively managing multiple rate reviews, including a $35 million revenue request in Nebraska and preparing for a rate review in Arkansas, which could pose challenges in achieving favorable outcomes.
Equity Issuance and Capital Needs: The company plans to issue $215 million to $235 million of new equity in 2025 to finance investments, which could dilute shareholder value and reflects reliance on external funding for capital projects.
Supply Chain and Project Execution Risks: The company is managing large-scale projects like the Ready Wyoming transmission expansion and Colorado Clean Energy Plan, which could face delays or cost overruns.
Economic and Market Demand Uncertainty: The company’s growth is tied to data center and blockchain demand, which could be impacted by broader economic conditions or shifts in market demand.
Earnings Guidance: Reaffirmed 2025 earnings guidance range of $4 to $4.20, representing a 5% growth rate at the midpoint over 2024 EPS. Long-term EPS growth target of 4% to 6% starting in 2026, with expectations to deliver in the upper half of this range.
Capital Plan: $4.7 billion capital plan through 2028, with annual investments ranging from $700 million to $750 million. Key projects include Ready Wyoming transmission expansion (completion by year-end 2025), Lange II generation project (completion in 2026), and solar and battery projects for the Colorado Clean Energy Plan (completion in 2027-2028).
Customer Growth: Strong demand from data center and blockchain customers, with data center load expected to contribute more than 10% of total EPS by 2028. Current forecast includes 500 megawatts of data center demand by 2029, with plans to serve over 1 gigawatt of demand in the future.
Regulatory Progress: Active rate reviews and approvals in Kansas and Nebraska, with plans for a rate review in Arkansas in Q4 2025. Rate reviews support recovery of over $1.3 billion in new system investments.
Dividend Strategy: Targeting a 55% to 65% payout ratio, with a focus on delivering long-term value for shareholders through dependable and increasing dividends.
Dividend Track Record: Black Hills Corporation has an industry-leading dividend track record of 55 consecutive years. The company continues to target a 55% to 65% payout ratio. A dependable and increasing dividend is an important component of their strategy to deliver long-term value for shareholders.
The earnings call highlights strong financial performance with a 28.6% YoY EPS increase, driven by regulatory efforts. Despite weather and cost headwinds, the company maintained positive guidance, supported by strong demand and strategic projects. The Q&A revealed no major concerns, with management confident in regulatory processes and economic conditions. The reaffirmed growth guidance and capital plan, alongside a dividend strategy, further bolster sentiment. Given the market cap, the stock is likely to see a positive movement, albeit not exceedingly strong, due to the absence of groundbreaking announcements.
The company reported a strong EPS increase and reaffirmed its earnings guidance, suggesting financial stability. The dividend track record and new partnerships with major companies like Meta and Microsoft are positive indicators. The Q&A revealed confidence in growth, particularly in data centers, despite some uncertainties. The stable insurance costs and recovery from outages further support a positive outlook. Given the market cap, the stock is likely to experience a moderate positive movement of 2% to 8%.
The earnings call presents mixed signals: positive elements include a strong dividend track record, new revenue from rate adjustments, and optimistic guidance. However, there are concerns about increased O&M expenses and equity issuance, which may dilute shares. The Q&A reveals uncertainties around the capital structure and potential litigation impacts. The market cap suggests moderate volatility, leading to a neutral prediction. Despite positive long-term growth targets, immediate factors like equity needs and cost increases balance the outlook.
The earnings call presents a mixed picture: positive EPS growth and dividend increase are offset by operational risks like unplanned outages and rising insurance costs. The Q&A reveals some concerns over CapEx timing and unclear management responses, particularly regarding future data center investments. However, the strong liquidity position and strategic initiatives, like the Meta data center, provide optimism. Given the company's market cap, these factors suggest a neutral stock price movement, with potential volatility due to economic and regulatory uncertainties.
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