On August 1, 2024, Xcel Energy Inc (XEL, Financial) released its 8-K filing for the second quarter of 2024. Xcel Energy, a major utility company serving 3.8 million electric and 2.1 million natural gas customers across eight states, reported GAAP and ongoing diluted earnings per share (EPS) of $0.54, compared to $0.52 in the same period last year. The company reaffirmed its 2024 EPS guidance of $3.50 to $3.60 per share.
Company Background
Xcel Energy Inc (XEL, Financial) manages utilities serving customers in Minnesota, North Dakota, South Dakota, Wisconsin, Michigan, Colorado, Texas, and New Mexico. It is one of the largest renewable energy owners and suppliers in the US, with more than half of its electricity sales coming from carbon-free energy.
Financial Performance and Challenges
For the second quarter of 2024, Xcel Energy reported earnings of $302 million, or $0.54 per share, compared to $288 million, or $0.52 per share, in the same period in 2023. The increase in earnings was driven by the recovery of increased infrastructure investments and warmer than normal weather, partially offset by higher depreciation, interest charges, and operating and maintenance (O&M) expenses.
“Xcel Energy continues to meet the growing demand for energy from our customers while driving forward the clean energy transition and adapting to changing regulatory and environmental conditions,” said Bob Frenzel, chairman, president, and CEO of Xcel Energy.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Operating Revenues | $3,028 million | $3,022 million |
| Operating Income | $449 million | $418 million |
| Net Income | $302 million | $288 million |
| Diluted EPS | $0.54 | $0.52 |
Income Statement Highlights
Operating revenues for the second quarter were $3,028 million, slightly up from $3,022 million in the same period last year. Operating expenses decreased to $2,579 million from $2,604 million, primarily due to lower costs for electric fuel and purchased power, and cost of natural gas sold and transported. However, these were offset by increased depreciation and amortization expenses.
Balance Sheet and Cash Flow
Xcel Energy's balance sheet remains robust, with significant investments in infrastructure and renewable energy projects. The company reported an increase in depreciation and amortization expenses due to system expansion and recognition of previously deferred costs. Interest charges also rose due to higher debt levels and increased interest rates.
Operational Insights
Xcel Energy's performance is crucial as it continues to invest in infrastructure and renewable energy projects. The company's ability to recover costs through regulatory mechanisms and its focus on clean energy transition are key factors for its long-term growth. However, challenges such as increased O&M expenses and higher interest charges could impact profitability.
Conclusion
Xcel Energy Inc (XEL, Financial) delivered solid financial results for the second quarter of 2024, with earnings per share meeting analyst estimates. The company's ongoing investments in infrastructure and renewable energy, coupled with its ability to navigate regulatory challenges, position it well for future growth. Investors should keep an eye on the company's ability to manage rising costs and interest rates as it continues to drive forward the clean energy transition.
Explore the complete 8-K earnings release (here) from Xcel Energy Inc for further details.
