Xcel's profit fell 7 percent in fourth quarter, slightly missing expectations

Xcel Energy's fourth-quarter profits fell about 7 percent from a year ago as its sales flatlined, but the utility company posted a solid 2017 overall.

Minneapolis-based Xcel Wednesday recorded fourth-quarter net income of $189 million, or 37 cents per share.

However, adjusting for a one-time tax expense, the company had fourth-quarter earnings of 43 cents per share. That was a penny below the consensus of analysts polled by Thomson Reuters. Xcel's fourth-quarter revenue of $2.8 billion fell short of analysts' estimates of $3.1 billion.

For the year, Xcel reported earnings of $1.15 billion, or $2.25 per share, up from $1.12 billion or $2.21 per share in 2016. Adjusted for the tax expense, 2017's per-share profits were $2.30.

"I think at Xcel Energy we had a Super Bowl year for 2017," Ben Fowke, Xcel's CEO told stock analysts in a conference call Wednesday. The company met growth targets for earnings and dividends.

In the conference call, Fowke singled out Xcel's nuclear operations as having had a particularly good 2017, with lower costs and higher capacity utilization. "Our nuclear operations had one of its best performance years," he said. Xcel has nuclear power plants near both Monticello and Red Wing.

Xcel's two largest markets are Minnesota and Colorado, while it also does business in Texas, New Mexico, Wisconsin the Dakotas and a sliver of Michigan's Upper Peninsula.

That increase reflects higher electricity profit margins due to a rate hike, as well as increased gas profit margins and lower operating and maintenance expenses, the company said.

In the fourth quarter, Xcel recorded a one-time expense of $23 million or 5 cents per share associated with the federal corporate tax cut enacted in December. Beyond that charge, Xcel said the 40 percent tax cut will be "mildly accretive" to earnings over the next five years.

Utility regulators in Minnesota and several other states are currently weighing how much of Xcel's tax savings should be passed down to rate payers.

"We believe that tax reform is beneficial to our customers and will result in lower revenue requirements, which provides the opportunity to reduce customer bills, make additional investments in areas that are important for our customers, and take actions to preserve our credit ratings," Fowke said in the conference call.

Xcel also on Wednesday reaffirmed its earnings guidance for 2018 is in the range of $2.37 to $2.47 per share.