Earnings Up For Xcel In Q3
Xcel Energy posted its third quarter report on Thursday to mixed result as it both beat earnings expectations and lagged behind revenue estimates.
The Minneapolis-based energy provider’s earnings over a three-month period ending September 30 rose $57 million compared to its 2014 Q3. Xcel posted a profit of $426 million, or 84 cents per share, whereas analysts at Zacks Investment Research expected Xcel’s earnings per share to finish at 80 cents.
In 2015 so far, revenue from electric service has overshadowed natural gas and other energy revenues for Xcel. In total, electric makes up $7.1 billion of its $8.4 billion total revenue year-to-date. Following this trend, electric energy yielded the largest gains for Xcel in the third quarter as electric revenues grew 2 percent compared to last year. In a company release, Xcel said the uptick in electric margins was due to an increase in retail electric rates.
Xcel missed Zacks analysts’ revenue prediction by nearly 2 percent. In the third quarter, Xcel’s revenues amounted to roughly $2.9 billion instead of the $2.96 billion that was estimated. Despite that, Xcel’s revenue did have a $31 million increase from the prior-year period.
By midday, shares of Xcel were trading slightly below their opening price.
In August, President Obama and the Environmental Protection Agency announced its Clean Power Plan, which aimed to reduce pollutant emissions through investments in clean energy producers like wind and solar. Xcel CEO Ben Fowke referenced the government’s new energy plan in a statement, saying, “Although the regulations are groundbreaking and complex, Xcel Energy is well positioned to meet the requirements and remains committed to delivering the clean energy options are customers want while maintaining safety and reliability and keeping costs affordable.”
Xcel is the biggest provider of wind power in the U.S., and the energy provider plans to expand its wind operations by another 1,600 megawatts. Moreover, Fowke told Bloomberg this week that wind energy is now cheaper to produce than coal.
The company’s relationship with solar energy has been a bit rockier this year. In June, Xcel clashed with a proposed $200 million community solar garden installation in the Twin Cities area, potentially the largest installation in the nation. That program is currently stalled and may go to court after developers on the project said Xcel has been slow to connect the installations to its substations.
In October, Xcel began allowing projects, known as community solar gardens, in Minnesota. As part of a subscription model, Xcel customers can take a share of its electricity from a nearby solar garden versus installing their own rooftop solar panel system. After a rebate from Xcel, it is estimated that customers could see their electric bills drop as much as 15 percent. The Star Tribune reported that the Dayton administration became a recent adopter of the solar energy movement after it announced plans to tie 30 percent of the power used at 29 state offices to community solar gardens.