Xcel Energy on Thursday reported better-than-expected earnings for the fourth quarter even as revenue declined.
The company, which is Minnesota's largest electric utility and has operations in seven other states, reported that quarterly revenue declined 0.7 percent to $2.55 billion from a year ago. Analysts had expected higher revenue and lower profit -- an average of 27.5 cents per share.
Across its service area, Xcel reported mixed results for the year, with higher earnings per share in Colorado and Texas regions, flat performance in Wisconsin, and a drop in the Minnesota region, which includes parts of North Dakota and South Dakota.
Xcel said electric sales across its eight-state territory in 2012 were flat when adjusted for weather variations and declined 0.3 percent when adjusted to exclude the extra day from leap year. Little growth in power sales is expected in 2013, and Minnesota likely will see another decline, executives said.
"We are not anticipating a tremendous amount of sales growth," CEO Ben Fowke said during a conference call with investment analysts. "Therefore, we are not anticipating a need for new generation."
For Xcel's Minnesota region, the company projects a 1.2 percent decline in electrical use in 2013. Xcel expects flat 2013 sales in Wisconsin, a 0.6 percent gain in Colorado and 3 percent growth in Texas.
The company said it intends to invest $3.1 billion in its system in 2013, including $1.4 billion in Minnesota.
Travis Miller, an analyst for Morningstar, said Xcel remains a strong utility for investors, in the top half among its peers, although many investment firms, including his, now rate the stock as "hold."
Xcel's slack demand growth is cause for concern by investors, though the effects may not be felt for two or three years, Miller said.
"Weak usage trends ... can have a long-term impact," reducing the need for new investment, he said. "And, ultimately, that leads to lower earnings."
During the quarter, Xcel took a $10 million charge for dropping a power-boosting upgrade of the Prairie Island nuclear power plant near Red Wing, Minn., but expects to recoup the investment in a future rate hike request.
The Minneapolis-based electric-and-gas utility said it earned 29 cents per share in the three months ending in December, beating estimates of investment analysts.
For the year, Xcel had ongoing diluted earnings of $1.82 per share, up 10 cents or 6 percent.
Fowke said it was the eighth consecutive year the company has met or beat its earnings guidance, which for 2013 is $1.85-$1.95 per share.
Xcel stock gained 1 percent during trading Thursday, closing at $27.78.
David Shaffer • 612-673-7900