IDACORP Earnings Call: Strong Growth Amidst Challenges

IdaCorp ((IDA)) has held its Q4 earnings call. Read on for the main highlights of the call.

The recent earnings call for IDACORP left investors with a generally positive sentiment, bolstered by strong earnings growth and robust customer expansion. The company is on a successful trajectory of infrastructure advancement. However, challenges such as increased operational expenses and regulatory hurdles were acknowledged, indicating areas requiring strategic attention.

17th Consecutive Year of Earnings Growth

IDACORP celebrated its impressive milestone of achieving earnings growth for the 17th consecutive year. The company’s diluted earnings per share rose significantly to $5.50 from $5.14 the previous year, showcasing their ability to consistently deliver value to shareholders.

Strong Customer Growth

Idaho Power reported a 2.6% increase in its customer base, ending the year with nearly 650,000 customers. This growth is a testament to the strength of the local economy, which is expected to expand further with growth rates of 4.5% in 2025 and 3.7% in 2026.

Infrastructure and Capacity Expansion

IDACORP is advancing its infrastructure efforts with new projects, including a 600 MW wind project in Wyoming and a high-voltage line connecting Nevada to Idaho. These developments are crucial for supporting future demand and enhancing capacity.

Positive Regulatory Outcomes

The company achieved favorable results in regulatory matters, with a $50.1 million rate increase in Idaho and a $6.7 million increase in Oregon. These outcomes are effective from the beginning of the year and contribute positively to IDACORP’s financial health.

Hydropower Conditions and Snowpack

Hydropower operations are set to benefit from the current snowpack levels, which are over 120% of the average. This condition is expected to enhance hydropower generation efficiency.

Increased Operational and Depreciation Expenses

IDACORP faced challenges with increased operational expenses, up by $61.1 million due to pension costs and wildfire mitigation. Additionally, depreciation expenses saw a rise of $28.1 million from ongoing system investments.

Increased Interest Expenses

Interest expenses also saw an uptick, climbing by $2.2 million, driven by higher long-term debt balances, which the company is managing as part of its financial strategy.

Regulatory Lag Concerns

Regulatory lag remains a point of concern, with IDACORP actively addressing this through frequent rate filings and exploring new mechanisms to better align rates with infrastructure investments.

Forward-Looking Guidance

Looking ahead, IDACORP projects its earnings per share for 2025 to land between $5.65 and $5.85. This forecast is supported by anticipated tax credit amortizations and continued strong customer growth. The company plans an average capital expenditure of $1.1 billion annually over the next five years, targeting a 16.1% CAGR in rate base growth. IDACORP also aims to maintain a balanced debt-to-equity ratio, planning to raise substantial equity and debt.

In conclusion, IDACORP’s earnings call highlighted a promising future underpinned by strong growth metrics and strategic investments in infrastructure. While challenges such as increased expenses and regulatory concerns remain, the company’s forward-looking guidance provides a reassuring outlook for stakeholders.