Xcel Energy (XEL) Misses Q2 EPS by 1c

Xcel Energy (NYSE: XEL) reported Q2 EPS of $0.39, $0.01 worse than the analyst estimate of $0.40. Revenue for the quarter came in at $2.5 billion versus the consensus estimate of $2.53 billion.

Xcel Energy Earnings Guidance — Xcel Energy’s 2016 ongoing earnings guidance is $2.12 to $2.27 per share. Key assumptions related to 2016 earnings are detailed below:

• Constructive outcomes in all rate case and regulatory proceedings.
• Normal weather patterns are experienced for the remainder of the year.
• Weather-normalized retail electric utility sales are projected to decrease by approximately 0.5 percent.
• Weather normalized retail firm natural gas sales are projected to be relatively flat.
• Capital rider revenue is projected to increase by $40 million to $50 million over 2015 levels.
• The change in O&M expenses is projected to be within a range of 0 percent to 1 percent from 2015 levels.
• Depreciation expense is projected to increase approximately $200 million over 2015 levels. Approximately $20 million of the increased depreciation expense and amortization will be recovered through the RDF rider (not included in the capital rider) in Minnesota.
• Property taxes are projected to increase approximately $40 million to $50 million over 2015 levels.
• Interest expense (net of allowance for funds used during construction (AFUDC) — debt) is projected to increase $40 million to $50 million over 2015 levels.
• AFUDC — equity is projected to increase approximately $0 million to $10 million from 2015 levels.
• The ETR is projected to be approximately 34 percent to 36 percent.
• Average common stock and equivalents are projected to be approximately 509 million shares.

Long-Term EPS and Dividend Growth Rate Objectives — Xcel Energy expects to deliver an attractive total return to our shareholders through a combination of earnings growth and dividend yield, based on the following long-term objectives:

• Deliver long-term annual EPS growth of 4 percent to 6 percent, based on ongoing 2015 EPS of $2.10, which was the mid-point of Xcel Energy’s 2015 ongoing guidance range;
• Deliver annual dividend increases of 5 percent to 7 percent;
• Target a dividend payout ratio of 60 percent to 70 percent; and
• Maintain senior unsecured debt credit ratings in the BBB+ to A range.

Ongoing earnings is calculated using net income and adjusting for certain nonrecurring or infrequent items that are, in management’s view, not reflective of ongoing operations.

For earnings history and earnings-related data on Xcel Energy (XEL) click here.

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