Pnm Resources ((TXNM)) has held its Q1 earnings call. Read on for the main highlights of the call.
The recent earnings call for TXNM Energy painted a picture of steady financial performance, buoyed by strategic investments in infrastructure and favorable legislative changes in New Mexico. Despite these positive notes, the company acknowledged challenges such as lower transmission margins and the necessity for rate design adjustments in Texas.
Ongoing Earnings and EPS Growth Target
TXNM Energy reported ongoing earnings for the first quarter of 2025 at $0.19 per share, aligning with market expectations. The company reaffirmed its 2025 earnings per share (EPS) guidance range of $2.74 to $2.84 and maintained its long-term EPS growth target of 7% to 9%. This consistency in earnings underscores the company’s stable financial footing.
Rate Base Growth and Capital Investment
The company’s rate base growth is bolstered by an approved system resiliency plan, which facilitates the recovery of $546 million in capital improvements. Looking ahead, TNMP plans to invest approximately $750 million in projects related to ERCOT’s Permian Basin Reliability Study by 2030, indicating a strong commitment to infrastructure enhancement.
Legislative Success in New Mexico
New Mexico’s legislative session proved fruitful for TXNM Energy, with the passage of key bills aimed at expediting infrastructure development and improving wildfire response. These legislative successes are expected to support the company’s strategic objectives in the region.
Demand Growth in Texas
The first quarter of 2025 saw TNMP setting a new system peak, 22% higher than the previous year, with demand-based load increasing by 9.7%. This growth was primarily driven by the expanding needs in North and West Texas, highlighting the region’s burgeoning energy demands.
Lower Transmission Margins and Higher Costs
Despite the positive developments, the quarter was not without its challenges. Lower transmission margins, coupled with higher insurance premiums and the timing of plant outage costs, posed hurdles to the company’s overall earnings.
Regulatory Challenges and Rate Design
TNMP is preparing for an upcoming base rate case that will address rate design and capital structure adjustments. This case marks the first significant regulatory review in seven years, aiming to tackle the issue of regulatory lag.
Forward-Looking Guidance
During the earnings call, TXNM Energy affirmed its 2025 guidance range of $2.74 to $2.84 per share, with a long-term EPS growth target of 7% to 9%. The company outlined its five-year capital plan, projecting investments to grow from $600 million in 2025 to over $1 billion by 2028. Additionally, PNM’s 2028 resource filing includes plans for 450 megawatts of resources, further supported by New Mexico’s legislative advancements.
In conclusion, TXNM Energy’s earnings call reflected a balanced outlook with steady financial performance and strategic infrastructure investments. While legislative successes in New Mexico and demand growth in Texas present opportunities, challenges such as lower transmission margins and regulatory adjustments remain. The company’s reaffirmed guidance and long-term growth targets underscore its commitment to navigating these dynamics effectively.