Dominion Energy Reports Positive Earnings Amid Strategic Growth

Dominion Energy Inc ((D)) has held its Q4 earnings call. Read on for the main highlights of the call.

Dominion Energy’s earnings call offered an optimistic outlook as the company embarks on its strategic plans, backed by robust financial performance and increased capital investments. The call also highlighted significant advancements in data center expansion and the Coastal Virginia Offshore Wind (CVOW) project. However, the discussion was not without its challenges, as increased project costs and regulatory delays in South Carolina were acknowledged.

Strong Financial Performance

Dominion Energy reported operating earnings per share for 2024 at $2.77, placing it in the upper half of their guidance range despite a $0.03 impact from adverse weather conditions. Additionally, GAAP earnings for the full year were recorded at $2.44 per share, illustrating strong financial health in the face of challenging circumstances.

Increased Capital Investment

In response to growing demand and to ensure reliability, Dominion Energy has updated its five-year capital forecast to $50 billion. This represents a 16% increase from previous guidance, indicating a significant commitment to future growth and infrastructure development.

Data Center Expansion

Data centers have become a substantial part of Dominion Energy Virginia’s sales, now accounting for 26% of total sales. The company has seen an 88% increase in contracted capacity since July 2024, showcasing the expanding footprint and importance of data centers in their business model.

Safety and Regulatory Achievements

Dominion Energy achieved near-record levels of employee safety performance and has secured favorable regulatory outcomes across South Carolina, North Carolina, and Virginia. These achievements underscore the company’s commitment to safe operations and effective regulatory engagement.

Progress on Coastal Virginia Offshore Wind Project (CVOW)

The CVOW project is progressing well, currently 50% complete and on schedule for a 2026 completion. With bipartisan support, this project is expected to have a significant economic impact, demonstrating Dominion Energy’s leadership in renewable energy initiatives.

Increased Project Costs

The cost for the CVOW project has risen from $9.8 billion to $10.7 billion due to higher network upgrade expenses. This increase highlights the complexities and financial challenges associated with large-scale renewable projects.

Interest Rate Headwinds

Dominion Energy is facing financial planning challenges due to higher interest rates, which serve as a headwind against the company’s financial outlook. This situation necessitates careful management to mitigate potential impacts on their financial stability.

Regulatory Lag in South Carolina

A regulatory framework in South Carolina has created a lag affecting Dominion Energy’s ability to earn the allowed return. This regulatory delay could lead to potential under-earning by 100 to 200 basis points, presenting a notable challenge for the company.

Forward-Looking Guidance

During the earnings call, Dominion Energy narrowed its 2025 operating earnings guidance to a range of $3.28 to $3.52 per share, maintaining the midpoint at $3.40. The company reaffirmed its long-term annual operating earnings growth rate of 5% to 7% through 2029. A significant 16% increase in their five-year capital investment forecast from 2025 to 2029, totaling $50 billion, is planned with a primary focus on Dominion Energy Virginia.

In conclusion, Dominion Energy’s earnings call highlighted a positive sentiment with strong financial results and strategic investments aimed at future growth. The company is making significant strides in data center expansion and renewable energy projects, albeit with some challenges such as project cost increases and regulatory lags. Overall, Dominion Energy is poised for continued growth and success in the coming years.