Xcel Energy posted a solid second quarter, its profits rising 7.4 %, besting Wall Street's forecast.
Minneapolis-based Xcel, Minnesota's largest utility, Thursday announced second-quarter earnings of $311 million, or 58 cents per share, up more than 7% from the same period a year ago.
Stock analysts' average earnings estimate was 54 cents for 2021's second quarter.
"Xcel Energy had a strong second quarter, and we reaffirm our 2021 guidance range," Ben Fowke, Xcel's CEO, said in a statement. "We reached constructive rate case settlements in New Mexico, North Dakota and Wisconsin."
Xcel also operates in Texas and a small slice of Michigan's Upper Peninsula. Its largest markets are Minnesota and Colorado, and the latter anchored its profit increases during the second quarter.
Xcel posted second-quarter revenue of $3.1 billion, up 18% over a year ago and topping analysts' estimates of $2.69 billion. In the second quarter of 2020, Xcel's sales were depressed as COVID-19 socked the economy, including electricity demand.
The bounce back in Xcel's commercial and industrial sales were not as "brisk" as expected, said Michael Doyle, a stock analyst at Edward Jones. "But I am confident that they will improve down the road."
Overall, Xcel had "a pretty good quarter," Doyle said.
Aside from stronger sales, increases in income from higher rates and nonfuel riders (effectively surcharges) buoyed Xcel's second-quarter profits.
During a conference call with analysts Thursday, Xcel executives were asked about rising inflation, which has surfaced in many companies' supply chains in recent months. Xcel is a sizable buyer of components for renewable-energy plants.
The company's chief financial officer, Brian Van Abel, said inflation for materials and labor is "transitory," the effect of a rapid economic recovery from last year's pandemic effects. He told analysts that Xcel's long-term inflation expectations are still around 2%.
Thursday's earnings marked the last for Fowke as CEO. He will retire in mid-August after 10 years in Xcel's top job, though he will remain executive chairman.
"It's really hard to retire from a role I really enjoy, but I am leaving the company in good hands," Fowke told analysts.
Bob Frenzel, Xcel's current president and chief operating officer who joined Xcel in 2016 as CFO, will succeed Fowke. "I recognize the LeBron James-sized shoes I am filling," Frenzel told analysts.
Xcel's stock closed Thursday at $68.79, up 9 cents.
