Yahoo Finance CenterPoint Energy Inc (CNP) (Q1 2024) Earnings Call Transcript Highlights: Strategic Growth ...
Non-GAAP EPS: Reported at $0.55 for Q1 2024, representing over 1/3 of the full year guidance midpoint.
Full Year Non-GAAP EPS Guidance: Range of $1.61 to $1.63, indicating 8% growth at the midpoint from 2023.
Long-Term Non-GAAP EPS Growth: Expected to grow at the mid- to high end of the 6% to 8% range annually through 2030.
Dividend Growth: Targeted to align with EPS growth through 2030.
Capital Expenditures: Anticipated investments of $2.2 billion to $2.7 billion over 2025-2027 for resiliency measures.
Total Capital Plan: Increased to $44.5 billion to $45 billion through 2030.
Revenue Requirement Increase: Texas Gas rate case settlement proposes an increase of approximately $5 million annually.
Minnesota Gas Rate Case: Requested revenue increase of approximately $85 million for 2024 and $52 million for 2025.
Houston Electric Rate Case: Filed for a revenue requirement increase of 2.6%, approximately $60 million.
GAAP and Non-GAAP EPS for Q1 2024: Both reported at $0.55, compared to $0.50 in Q1 2023.
Release Date: April 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you discuss the impact of the $500 million upside in terms of accretion versus the 10% rate base growth? A: (Jason P. Wells - President, CEO & Director) The $500 million is part of our ongoing resiliency efforts and is included in our plan for 10% rate base growth through the decade. We've been investing in resiliency because it's essential for our customers. This spending is already incorporated into our plan, and we see significant opportunities for further investments, especially in distribution resiliency and industrial electrification in Houston.
Q: How are you planning to finance the incremental CapEx related to the resiliency plan? A: (Christopher A. Foster - Executive VP & CFO) We aim to fund it in line with our enterprise capital structure. For the $500 million related to the resiliency filing, we're exploring federal and state-based loan and cost matching programs. If these are not successful, we'll continue to fund in accordance with our capital structure.
Q: Could you provide more details on the potential settlement in the Indiana electric rate case? A: (Jason P. Wells - President, CEO & Director) We've delayed the start of the hearing by a day to explore potential settlements. The case involves CapEx that has been previously discussed with stakeholders, focusing on transitioning from coal and enhancing transmission and distribution for better reliability and resiliency.
Q: What is the timeline for the approval of the resiliency plan? A: (Jason P. Wells - President, CEO & Director) The legislation calls for a 6-month approval period. We expect a decision towards the end of this year. This is the first of its kind, so the exact timeline may vary as parties review the plan.
Q: What are your thoughts on the S&P negative outlook and how do you plan to address it? A: (Christopher A. Foster - Executive VP & CFO) The negative outlook is based on past evaluations. We anticipate that as the impacts from Winter Storm Uri roll off, our metrics will naturally improve. We're targeting a 100 to 150 basis points cushion with Moody's and expect to grow into a better position with S&P over the next year.
Q: How does the potential use of state and federal incentives for the resiliency plan impact EPS? A: (Jason P. Wells - President, CEO & Director) The impact on EPS from these incentives is very small. Our focus is on achieving better outcomes for customers through more efficient financing. We'll provide a more comprehensive update on our earnings guidance after concluding our rate cases next year.
Q: Can you comment on the expected trajectory of regulatory lag and its impact? A: (Jason P. Wells - President, CEO & Director) Historically, we've seen about 150 basis points of regulatory lag on average in Texas. We've taken steps to reduce this, but it's challenging to provide a current view in the middle of our rate case filings. Post-rate case, we expect to have a clearer picture and reduced lag.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
