Buoyed by hot weather, Xcel Energy posted a 16 percent increase in second-quarter profits, beating Wall Street estimates.
The Minneapolis-based utility company Thursday announced earnings of $265 million, or 52 cents per share, up from $227 million, or 45 cents per share, during last year’s second quarter. Those results exclude effects from last year’s federal corporate tax cut.
Analysts polled by Zacks Investment Research were forecasting quarterly profits of 47 cents per share.
“Xcel Energy achieved strong quarterly and year-to-date results and is well-positioned to deliver earnings within our revised guidance range for the year,” Xcel CEO Ben Fowke said in a media statement.
The company Thursday raised its 2018 earnings guidance range from $2.37 to $2.47 per share to $2.41 to $2.51 per share. Xcel’s second-quarter revenue was $2.66 billion. Its weather-adjusted sales were up 1 percent over a year ago, anchored in the commercial and industrial sector.
“We are fortunate to have territories where we are experiencing good customer growth,” Fowke said in a conference call with stock analysts. Still, like utilities nationwide, Xcel faces flat sales in the long term, he said, as customers increase their energy-efficiency measures.
Xcel, Minnesota’s largest utility, does business in seven other states as well: Colorado, Texas, New Mexico, Wisconsin, the Dakotas and Michigan’s Upper Peninsula. Colorado and Minnesota are its biggest markets.
Hotter-than-normal weather in several states boosted demand for air conditioning, helping to increase Xcel’s electricity profit margins. Cooler-than-normal weather in some of Xcel’s territories also bolstered sales at its gas utilities.
And in Colorado, interim rate hikes for electricity and gas contributed to strong results. Earnings were also particularly robust in New Mexico and Texas.
The company’s bottom line was helped, too, by an increase in its allowance for construction funds — a return that regulated utilities can earn on their invested capital when a project is being built.
Xcel’s stock closed Thursday at $46.88, up 2.6 percent.