Xcel Energy ((XEL)) has held its Q1 earnings call. Read on for the main highlights of the call.
Xcel Energy’s recent earnings call painted a picture of both optimism and caution. The company showcased its robust infrastructure investments and strong regulatory engagements, which are positioning it well for future growth. However, concerns were raised due to declines in earnings, increased operating expenses, and rising liability estimates for wildfire claims. Despite these challenges, Xcel Energy remains confident, bolstered by positive sales growth and ongoing data center expansion.
Record Investment in Energy Infrastructure
Xcel Energy has made a significant commitment to enhancing its energy infrastructure, with a record investment of $2.3 billion in the first quarter of 2025. This investment underscores the company’s dedication to delivering energy efficiently and reliably, setting a strong foundation for future growth.
Strong Regulatory Outcomes
The company achieved constructive settlements on wildfire mitigation and system resiliency plans in Colorado and Texas. These agreements are expected to receive commission decisions by the third quarter of 2025, reflecting Xcel Energy’s proactive approach to regulatory challenges.
Positive Sales Growth
Xcel Energy reported a 2% increase in weather and leap year adjusted electric sales for the first quarter of 2025. The company anticipates a 3% increase in full-year weather-adjusted electric sales, indicating a positive trend in demand for its services.
Data Center Expansion
The expansion of Xcel Energy’s data center footprint continues to gain momentum, with significant interest across states such as Minnesota, Colorado, and Wisconsin. This expansion is supported by robust pipeline management, highlighting the company’s strategic growth in this sector.
Earnings Decline
Despite positive developments, Xcel Energy faced a decline in earnings, with a decrease to $0.84 per share in the first quarter of 2025 from $0.88 per share in the same period of 2024. This decline was attributed to higher operating and maintenance expenses, depreciation, and interest costs.
Wildfire Liability Increase
The estimated liability related to Smokehouse Creek increased to $290 million, although it remains under the $500 million insurance coverage. This increase highlights the ongoing challenges Xcel Energy faces in managing wildfire-related risks.
Higher Operating Expenses
Operating and maintenance expenses rose by $81 million to $686 million in the first quarter of 2025. This increase was driven by factors such as nuclear outage amortization, insurance premiums, and benefit costs, impacting the company’s overall financial performance.
Forward-Looking Guidance
Xcel Energy remains optimistic about its future, projecting annual earnings per share between $3.75 and $3.85. The company plans to deliver between 15,000 and 29,000 megawatts of new generation by 2031, supported by a $2.3 billion investment in energy infrastructure. Additionally, Xcel Energy is focused on tariff mitigation efforts and maintaining its commitment to clean energy, having saved customers over $5 billion in avoided fuel costs and production tax credits since 2018.
In conclusion, Xcel Energy’s earnings call highlighted a blend of strategic investments and challenges. While the company faces hurdles such as declining earnings and increased liabilities, its strong regulatory engagements and infrastructure investments position it well for future growth. Investors and stakeholders will be keenly watching how Xcel Energy navigates these dynamics in the coming quarters.