Facing mild weather that kept air conditioners in low gear, Xcel Energy's profits fell 12% during the second quarter, well short of Wall Street forecasts.
Minneapolis-based Xcel Thursday said it earned $238 million, or 46 cents a share, down from $265 million or 52 cents a share, a year ago. Analysts polled by Zacks Equity Research were on average expecting earnings of 53 cents per share.
Xcel said profits were dented by mild weather and increased depreciation, interest and operating and maintenance expenses. The number of "cooling degree days," a measure of the average daily temperature above 65 degrees, were down 45% from normal during Xcel's second quarter.
Xcel Energy is still "well-positioned to deliver earnings at or above the midpoint of our 2019 guidance range," Xcel Chief Executive Ben Fowke said in a conference call with stock analysts. "We are very confident we will deliver on our financial objectives as we have in the past."
Xcel's second-quarter revenue clocked in at $2.58 billion, down 3% from a year ago and below analysts' estimates.
Xcel is the largest electric utility in Minnesota and Colorado and also does business in Texas, New Mexico, Wisconsin, the Dakotas and Michigan's Upper Peninsula. Xcel's Colorado operations posted the weakest performance during the second quarter, with per-share earnings declining 17%.
Xcel's overall depreciation and amortization expenses rose 16% in the second quarter compared with a year ago, primarily due to its huge Rush Creek wind farm in Colorado, which went into service during the period.
Ali Agha, an analyst at SunTrust Robinson Humphrey, said in a report Thursday that Xcel's higher expenses during the quarter were timing-related, and therefore year-over-year comparisons should improve in 2019's second half.
