Black Hills Corp. Earnings Call Highlights Positive Outlook

Black Hills ((BKH)) has held its Q3 earnings call. Read on for the main highlights of the call.

Black Hills Corp. Earnings Call: Positive Outlook Amid Challenges

The recent earnings call for Black Hills Corp. conveyed a generally positive sentiment, underscored by the reaffirmation of earnings guidance, successful rate reviews, and progress on key capital projects. Despite facing challenges such as weather impacts, increased operational and maintenance (O&M) costs, and higher financing and depreciation expenses, the overall tone was optimistic, highlighting significant progress on strategic initiatives and growth opportunities.

Earnings Guidance Reaffirmed

Black Hills Corp. reaffirmed its 2025 earnings guidance, projecting an adjusted EPS range of $4 to $4.20. This represents a 5% growth rate at the midpoint over the 2024 EPS, demonstrating the company’s confidence in its financial trajectory and strategic initiatives.

Successful Completion of Rate Reviews

The company has successfully completed seven rate reviews since the beginning of last year, including a recent settlement for its rate review in Nebraska. This achievement underscores Black Hills Corp.’s ability to navigate regulatory landscapes effectively and secure favorable outcomes.

Progress on Key Capital Projects

Significant progress has been made on key capital projects, with the 260-mile Ready Wyoming transmission expansion project on track for completion by year-end. Additionally, the company has commenced work on the Lange II generation project in Rapid City, marking important milestones in their infrastructure development.

Merger with NorthWestern Energy

Black Hills Corp. is making strides in its merger with NorthWestern Energy, having submitted joint applications to regulators in Montana, Nebraska, and South Dakota. This merger is poised to enhance the company’s market position and operational capabilities.

Data Center Demand Growth

The company is witnessing growing demand from large load customers, particularly data centers, with signed nondisclosure agreements for more than 3 gigawatts of demand. This surge in demand is expected to bolster the company’s growth trajectory significantly.

Weather Impact on Earnings

Weather conditions posed a $0.07 headwind compared to the same quarter last year, primarily due to lower agricultural irrigation demand in Nebraska. This impact highlights the challenges posed by external environmental factors on the company’s earnings.

Increased O&M Costs

Operational and maintenance costs increased by $0.08 per share, including $0.10 of merger-related transaction costs. This rise in expenses reflects the financial implications of strategic initiatives and ongoing operations.

Higher Financing and Depreciation Expenses

The company experienced a $0.03 per share increase in financing costs, driven by higher interest expenses and share dilution, along with a $0.02 increase in depreciation expenses. These factors indicate the financial pressures associated with growth and expansion.

Forward-Looking Guidance

During the Q3 2025 earnings call, Black Hills Corp. reaffirmed its 2025 earnings guidance, with an adjusted EPS range of $4 to $4.20, reflecting a 5% growth rate at the midpoint over 2024 EPS. The company outlined a $4.7 billion capital plan, including a $1 billion capital plan for 2025, with projects such as the Ready Wyoming transmission expansion and the Lange II generation project. They anticipate achieving the upper half of their 4% to 6% long-term EPS growth target starting in 2026. Additionally, the merger with NorthWestern Energy is expected to close in the second half of 2026, pending regulatory approvals.

In summary, the Black Hills Corp. earnings call reflected a positive outlook, with reaffirmed earnings guidance and significant progress on strategic initiatives. Despite challenges such as weather impacts and increased costs, the company remains optimistic about its growth trajectory, driven by successful rate reviews, capital projects, and expanding demand from data centers. The forward-looking guidance further reinforces the company’s confidence in achieving its financial goals.