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Here’s What Could Drive Xcel Energy’s Q2 2018 Earnings

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Earnings

Xcel Energy (XEL), one of the largest regulated utilities in the country, is scheduled to report its second-quarter results on July 26. Analysts expect it to report EPS of $0.47. In 2Q 2017, it reported EPS of $0.45.

Xcel Energy stock has been weak so far this year. It has fallen more than 4%, while the Utilities Select Sector SPDR ETF (XLU) is marginally up year-to-date.

XEL eps

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Earnings drivers

Xcel Energy is expected to report total revenues of $2.64 billion for Q2 2018. It reported revenues of $2.65 billion in Q2 2017. It has increased its customer base 1% year-over-year in the last few quarters. Higher customer base growth could have a positive impact on its revenues in Q2 2018. It lowered its revenue requirement ~$400 million in 2018 as a potential impact of tax reforms introduced in December 2017.

Xcel Energy’s investments in its rate base could have a notable impact on its quarterly earnings. It aims to invest $18.5 billion in capital projects and grow its rate base 6.5% per year through 2022.

It’s working on lowering its use of coal for power generation. In 2017, it used 37% coal to generate electricity, which was higher than utilities (XLU) (IDU) at large. By 2027, it’s targeting to use 45% renewables and 22% coal.

Minnesota-based Xcel Energy has given an earnings guidance of $2.37–$2.47 per share for 2018.

NextEra Energy (NEE), the biggest utility by market capitalization, will report its quarterly earnings on July 25. It’s one of the most rallied top utility stocks in the sector. Read how it is placed ahead in How NextEra Energy Is Placed ahead of Its Q2 2018 Earnings.

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