Warm weather is cooling Xcel Energy's profits.
As customers needed less heat this past winter, the Minneapolis-based utility saw its quarterly electric and natural gas sales drop, for an overall decline in revenue of 8.5 percent from a year earlier.
That helped knock 6 cents per share off earnings, or nearly 10 percent, compared with the January-March period of a year ago, although Wall Street analysts had expected worse.
"Warm weather throughout our service territory negatively impacted our first-quarter results, most notably in Minnesota, which experienced its warmest March in over 100 years," Xcel Chief Financial Officer Teresa Madden said on a conference call with analysts.
Minnesota operations, which include North Dakota and South Dakota, accounted for a big share of the lowered earnings because of the weather, a lower electric rate compared with an interim rate last year and other factors, she said.
Overall, Xcel Energy Inc.'s earnings were $184 million, or 38 cents per share, compared with $204 million, or 42 cents a share, for the same period last year. Wall Street analysts had expected earnings of 36.5 cents a share.
Xcel, which operates in eight states, wasn't alone among U.S. utilities affected by mild weather. Dominion Resources, a Virginia-based electric and gas utility, reported a similar earnings drop Thursday. Entergy, based in New Orleans, posted a loss. Both cited the historically warm winter as a factor in lower natural gas or electricity sales.
"Weather can have a huge impact on earnings from year to year," said Travis Miller, an analyst for Morningstar in Chicago. "For utilities in the Eastern United States, we are seeing particularly challenging results."
