Evergy, Inc. ((EVRG)) has held its Q1 earnings call. Read on for the main highlights of the call.
Evergy, Inc.’s recent earnings call painted a picture of balance between stability and growth potential, tempered by some short-term challenges. The sentiment expressed during the call highlighted a stable earnings performance, bolstered by strategic investments and legislative support, while acknowledging hurdles such as reduced industrial demand and adverse weather impacts. Overall, the call conveyed a cautiously optimistic outlook, with an emphasis on long-term growth prospects.
Stable Earnings Year-Over-Year
Evergy reported first-quarter adjusted earnings of $0.54 per share, mirroring the performance from the same period last year. This stability was primarily attributed to regulated investments that helped counterbalance the dip in industrial demand.
Reaffirmed Earnings Guidance
The company reaffirmed its 2025 adjusted EPS guidance range of $3.92 to $4.12 per share, with a midpoint of $4.02. This reaffirmation underscores Evergy’s confidence in its strategic direction and operational efficiencies to meet its financial targets.
Strong Operational Performance
Evergy’s generation team demonstrated commendable operational performance by achieving strong availability and setting a new winter peak load record of over 48 gigawatts in the Southwest Power Pool.
Legislative Success
Constructive legislative measures in Kansas and Missouri have been instrumental in enhancing regulatory frameworks, thereby supporting infrastructure investments that are crucial for Evergy’s growth trajectory.
Robust Customer Pipeline
The company expanded its customer pipeline by 1 gigawatt to a total of 12.2 gigawatts. Notably, 300 megawatts have transitioned from finalizing agreements to active construction, indicating significant progress in project development.
Integrated Resource Plan Update
Evergy’s 2025 Integrated Resource Plan (IRP) outlines the addition of 2.1 gigawatts of new generation capacity from 2025 to 2035, reflecting the company’s anticipation of increased demand growth.
Lower Industrial Demand
A significant unplanned maintenance shutdown at a major customer’s refinery led to a decrease in industrial demand, impacting Evergy’s overall sales.
Weather-Related Sales Impact
The company faced sales challenges due to two heavy snow events that disrupted business activities in January and February, highlighting the vulnerability of sales to weather conditions.
Interest and Depreciation Expense Increase
Increased infrastructure investments resulted in higher interest and depreciation expenses, which negatively impacted Evergy’s earnings for the quarter.
Weather-Normalized Demand Decline
Despite a 2.7% absolute demand growth, weather-normalized demand saw a decline of 3%, underscoring the complexities of demand forecasting in variable weather conditions.
Forward-Looking Guidance
Looking ahead, Evergy remains committed to achieving the midpoint of its 2025 EPS target by year-end, supported by operational efficiencies and a rebound in demand growth. The company maintains a long-term EPS growth target of 4% to 6% through 2029, driven by strategic regulatory frameworks and a robust customer pipeline. Major projects are expected to significantly enhance demand growth post-2026.
In conclusion, Evergy’s earnings call reflected a balanced sentiment of stability and growth potential, with strategic investments and legislative support paving the way for future expansion. Despite facing short-term challenges such as lower industrial demand and weather-related impacts, the company remains optimistic about its long-term growth trajectory.