Q3 2023 Earnings Summary
Reported on Jan 4, 2025 (Before Market Open)
Pre-Earnings Price$54.45Last close (Oct 25, 2023)
Post-Earnings Price$54.46Open (Oct 26, 2023)
Price Change
$0.01(+0.02%)
- Sustainable Operational Cost Savings: CMS Energy has implemented significant cost reduction initiatives, including a voluntary separation program reducing their salaried workforce by roughly 10%, leading to sustainable operational cost savings that will support earnings in 2024 and beyond.
- Strong Demand for Renewable Energy Programs: There is robust demand for CMS Energy's voluntary green pricing program, with over 400 megawatts of contracted load, which continues to grow. This supports further investments in renewable energy projects, including new solar facilities, contributing to growth and aligning with clean energy goals.
- Positive Outlook for Dearborn Industrial Generation (DIG): CMS Energy sees opportunities for growth at DIG, with energy and capacity contracts in place through 2025 that are exceeding expectations. Upward pressure on energy and capacity prices enhances the value of these contracts.
- Regulatory risk in obtaining higher ROEs: CMS Energy is seeking to increase its Return on Equity (ROE) above the current 9.9%, due to rising interest rates, but there is uncertainty about regulatory approval. The company acknowledges that achieving higher ROEs is challenging despite making the case to regulators.
- Uncertainty over sustainability of cost savings: CMS Energy has achieved significant O&M savings this year, including a 10% reduction in salaried workforce , to offset headwinds from weather and storms. However, the sustainability of these savings into next year is uncertain and difficult to quantify.
- Execution risks in infrastructure projects: The company faces potential delays and cost uncertainties in its infrastructure projects, including undergrounding pilots and solar projects. Issues with project timing and execution could impact its ability to meet investment and earnings targets.