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IdaCorp’s Earnings Call: Strong Growth Amid Challenges

IdaCorp’s Earnings Call: Strong Growth Amid Challenges

IdaCorp ((IDA)) has held its Q2 earnings call. Read on for the main highlights of the call.

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IdaCorp’s recent earnings call conveyed a generally positive sentiment, underscored by robust financial performance. The company reported increased earnings per share, a growing customer base, and successful equity transactions. However, challenges such as rising operational expenses and uncertainties in renewable projects due to regulatory and permitting hurdles were also acknowledged.

Increase in Diluted Earnings Per Share

IDACORP reported an increase in diluted earnings per share, rising from $1.71 in last year’s second quarter to $1.76 this year. For the first half of 2025, earnings per share increased from $2.67 in 2024 to $2.87, reflecting the company’s strong financial performance.

Raising Earnings Guidance

The company has raised the lower end of its full-year diluted earnings per share guidance by $0.05, setting a new range of $5.70 to $5.85. This adjustment is attributed to strong operational results observed in the second quarter.

Customer Growth

Idaho Power, a subsidiary of IDACORP, experienced a 2.5% increase in its customer base since last year’s second quarter. This growth includes a 2.7% rise in residential customers, indicating a healthy expansion in their consumer base.

Significant New Customer Investments

IDACORP made several significant new customer investments in sectors such as technology, food processing, mining, and distribution warehousing. Notably, Micron announced the establishment of a second high-volume fabrication plant in Boise, highlighting the region’s growing industrial appeal.

Equity Transaction Success

The company successfully entered into forward sale agreements to sell $575 million in gross amount of stock. This strategic move is intended to fund equity needs into 2027, showcasing IDACORP’s proactive financial planning.

Increased Operating Cash Flows

Operating cash flows for the first half of 2025 reached $301 million, marking an increase of $45 million compared to the first half of the previous year. This improvement underscores the company’s efficient cash management strategies.

Increased Operating Expenses

IDACORP faced higher operating and maintenance expenses, which increased by $11.1 million. This rise is attributed to increased labor costs, wildfire mitigation programs, and related insurance expenses.

Higher Depreciation and Interest Expenses

The company reported an increase in depreciation expense by $6.4 million and a rise in net nonoperating expenses by $7 million, driven by higher long-term debt balances.

Uncertainty in Renewable Projects

Recent legislation and executive orders have introduced new hurdles for renewable projects, impacting initiatives like the Jackalope Wind project in Wyoming. These regulatory challenges pose potential risks to future renewable energy developments.

Potential Regulatory Lag

IDACORP is experiencing regulatory lag due to historic test year approaches, which is impacting its earnings and credit metrics. This lag presents a challenge in aligning regulatory frameworks with current operational realities.

Challenges with Permitting and Federal Actions

Permitting processes and recent federal actions have introduced uncertainties in renewable energy projects. These challenges highlight the complex regulatory landscape that IDACORP must navigate.

Forward-Looking Guidance

During the earnings call, IDACORP provided detailed guidance for the fiscal year. The company raised its full-year diluted earnings per share guidance to a range of $5.70 to $5.85, driven by strong operational results. Capital expenditures are anticipated to be between $1 billion and $1.1 billion, with operating and maintenance expenses expected to range from $465 million to $475 million. Hydropower generation is projected to be between 7 million and 8 million megawatt hours, and tax credit amortization is expected to range from $60 million to $77 million. These forecasts assume normal weather and power supply expenses for the rest of the year.

In conclusion, IDACORP’s earnings call reflected a strong financial performance with positive growth indicators, despite facing operational and regulatory challenges. The company’s strategic initiatives and forward-looking guidance suggest a proactive approach to sustaining growth and addressing potential hurdles in the renewable energy sector.

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