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DOMINION ENERGY, INC (D) Q1 2024 Earnings Summary

Executive Summary

  • Q1 2024 operating earnings were $0.55 per share, with GAAP EPS of $0.78; management flagged a $0.06 weather headwind, partially offset by interest savings from the earlier close of the East Ohio Gas sale .
  • Guidance affirmed: FY 2024 operating EPS $2.62–$2.87 and FY 2025 $3.25–$3.54; dividend, credit and financing guidance also reaffirmed .
  • Coastal Virginia Offshore Wind (CVOW) remained on time and on budget; updated LCOE to $73/MWh, project ~28% complete, 36 monopiles received (as of the call) and contingency of $284 million intact .
  • Demand backdrop strengthened: Dominion Energy Virginia (DEV) weather-normal sales growth of 4.8% YTD and accelerating data center pipeline (expect ~15 connections in 2024), positioning long-term rate base growth .
  • Consensus estimates from S&P Global were unavailable at time of retrieval; comparisons to Street estimates cannot be provided (S&P Global data access limit) [GetEstimates error].

What Went Well and What Went Wrong

What Went Well

  • Affirmed full-year operating EPS guidance for 2024 ($2.62–$2.87) and 2025 ($3.25–$3.54), and reiterated dividend and credit guidance: “no changes to any of the other financial guidance” .
  • CVOW execution: “The project is proceeding on time and on budget,” with updated LCOE $73/MWh, 93% costs fixed, contingency of $284 million maintained; “We believe this lawsuit has no merit” regarding attempts to delay construction .
  • Virginia segment strength: DEV operating earnings rose to $424 million from $386 million (+$38 million YoY), with favorable drivers including rider equity return and weather vs last year .

Quote: “We affirmed all financial guidance… and we are 100% focused on execution. We know we must deliver and we will.” — Robert Blue .

What Went Wrong

  • Weather headwind of $0.06 impacted operating EPS; higher interest expense also weighed on results .
  • Corporate & Other operating earnings fell to $(143) million from $(73) million YoY (−$70 million), reflecting higher net interest expense and other items .
  • Q1 operating revenue declined YoY to $3.63B from $3.88B; GAAP EPS declined to $0.78 from $1.15 due to adjustments and discontinued operations mix .

Financial Results

Headline Financials vs Prior Periods and Estimates

MetricQ1 2023Q4 2023Q1 2024Consensus (Q1 2024)
Revenue ($USD Billions)$3.883 $3.534 $3.632 N/A – unavailable (S&P Global access limit)
GAAP EPS ($)$1.15 $0.30 $0.78 N/A – unavailable (S&P Global access limit)
Operating EPS ($)$0.59 $0.29 $0.55 N/A – unavailable (S&P Global access limit)
Income from Operations (EBIT, $USD Billions)$1.079 $0.712 $0.833 N/A – unavailable (S&P Global access limit)
EBIT Margin (%)27.8% (1.079/3.883) 20.1% (0.712/3.534) 22.9% (0.833/3.632) N/A – unavailable (S&P Global access limit)

Notes:

  • EBIT Margin calculated from reported “Income from operations” divided by “Operating Revenue” in cited releases .
  • Street consensus estimates could not be retrieved due to S&P Global request limits at time of query (S&P Global).

Segment Operating Earnings (non-GAAP)

Segment ($USD Millions)Q1 2023Q1 2024
Dominion Energy Virginia386 424
Dominion Energy South Carolina91 80
Contracted Energy111 122
Corporate & Other(73) (143)
Total Operating Earnings515 483

KPIs and Operational Metrics

KPIQ3 2023Q4 2023Q1 2024Trend
OSHA Recordable Rate (employees)—0.45 FY 2023 0.32 (first 3 months) Improving
DEV Weather-Normal Sales Growth——4.8% YTD thru March Strong
Data Centers Connected——Expect 15 in 2024 Accelerating
CVOW LCOE ($/MWh)$77 $77 $73 Lower
CVOW % Complete——28% Progressing
CVOW Monopiles Received8 (Nov 2023 update) 24 by Feb 2024 36 by May 2 Building inventory

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Operating EPSFY 2024$2.62–$2.87 $2.62–$2.87 Maintained
Operating EPSFY 2025$3.25–$3.54 $3.25–$3.54 Maintained
DividendOngoing66.75¢/quarter; 100% committed 66.75¢ declared May 7; commitment reiterated Maintained
CVOW LCOEProject life$77/MWh $73/MWh Lowered
Financing Plan2024Equity ~$600–$800mm (DRIP ~$200mm; ATM ~$400–$600mm); Hybrids $700mm–$1.5B; DEV long-term debt later in year Affirmed; ATM not yet issued as of May 2 due to shelf timing; to commence shortly Maintained (timing update)
Credit MetricsMulti-yearStrengthened post-review; aim to meet/exceed downgrade thresholds Reaffirmed improved credit profile; rating agency feedback constructive Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2023)Previous Mentions (Q4 2023)Current Period (Q1 2024)Trend
Offshore wind (CVOW) statusOn time/on budget; 92% fixed costs; contingency $370mm; partner process advanced Noncontrolling 50% partner (Stonepeak) announced; robust cost sharing; contingency $351mm; 92% fixed; permits secured On time/on budget; LCOE $73/MWh; contingency $284mm; 93% fixed; 28% complete; monopile install imminent; legal challenge deemed meritless Positive execution, de-risked
Data center demandTransmission upgrades; new 500kV line; strong load growth Continued growth; PJM parameters validating need; capacity market approach updated 4.8% DEV sales growth YTD; larger 60–90MW+ facilities; faster ramps (2–3 yrs vs 4–5); 15 connections in 2024 Accelerating demand
Credit/financingAim to exceed downgrade thresholds; minimize external equity; robust hedging Stonepeak partnership improves FFO/debt ~+1%; execution of debt reduction plan; pension/ITC accounting changes 2024 plan: equity via DRIP/ATM; hybrids; DEV debt issuance; regulatory approvals tracking Steady, constructive
Dividend policy100% committed 100% committed Reiterated commitment Stable
RNG/ITC accounting—Shift to deferral method to reduce volatility; illustrative $0.03–$0.04 annual EPS from ITC Reiterated conservative posture post-review Lower volatility
Regulatory (VA/SC)VA legislation improved model; VA biennial review underway VA SEC additions; biennial outcomes constructive Multiple filings aimed at affordability (fuel/transmission riders); SC rate case; bills ~18% below national avg Supportive backdrop

Management Commentary

  • Safety and execution: “Our safety performance this quarter was outstanding... We affirmed all financial guidance... and we are 100% focused on execution. We know we must deliver and we will” — Robert Blue .
  • CVOW legal/process update: “There has been no delay ordered. Our construction schedule has not been altered” — Robert Blue, addressing erroneous reports; monopile installation expected May 6–8 .
  • Guidance cadence: “We continue to expect 2024 operating earnings per share to be between $2.62 and $2.87... we’re no longer providing quarterly earnings guidance” — Steven Ridge .
  • Financing plan discipline: “We expect to issue between $600 million and $800 million of common equity during 2024... and between $700 million and $1.5 billion of hybrids this year” — Steven Ridge .
  • Demand growth: “We’re ramping into very substantial and growing multi-decade utility investment... DEV’s weather-normal year-over-year sales growth rate through March was 4.8%” — Robert Blue .

Q&A Highlights

  • Data center self-supply and rate design: Management expects most solutions to rely on front-of-the-meter network resources; exploring alternative rate designs subject to SEC approval; contract minimum demands protect ratepayers .
  • Capacity market posture: Returning to PJM capacity auction (vs FRR) starting ’25–’26; temporary ~$0.04 EPS headwind in 2H25 due to timing/leakage, recoverable in rates thereafter .
  • ATM issuance status: None issued as of May 2 due to shelf expiration during the business review; program to restart shortly .
  • Winter reliability: Considering gas/LNG storage for combined cycle plants and CTs at Chesterfield to support dispatchable needs .
  • Millstone co-located data center: MOU with NE Edge; working with stakeholders; no assumptions embedded in financial plan yet .
  • SMR exploration: Positive VA policy stance; SMRs evaluated for long-term needs but must fit affordability and balance sheet parameters .
  • Data center ramp speeds: Historically 4–5 years to full capacity; now 2–3 years for similar capacity .

Estimates Context

  • Wall Street consensus (S&P Global Capital IQ) for Q1 2024 and prior quarters could not be retrieved due to a request limit at time of access; therefore, we cannot provide formal beat/miss vs Street numbers for revenue or EPS (S&P Global data access limit) [GetEstimates error].
  • Management’s affirmed full-year guidance and disclosed quarterly drivers serve as the primary benchmark for expectations .

Key Takeaways for Investors

  • Execution credibility improving: On-time, on-budget CVOW progress with lowered LCOE and high fixed-cost coverage reduces project and balance sheet risk; Stonepeak partnership later in 2024 further derisks funding .
  • Demand-led growth runway: DEV sales growth (4.8% YTD) and accelerating, larger data center loads underpin multi-year rate base and capital deployment across T&D and generation .
  • Near-term EPS noise manageable: Q1 weather headwind ($0.06) and higher interest expense were flagged; FY guidance reaffirmed, with explicit cadence and temporary 2025 capacity-market leakage explained .
  • Financing mix remains prudent: 2024 equity via DRIP/ATM and hybrids sized to maintain credit strength; dividend commitment reiterated .
  • Regulatory positioning constructive: VA/SC filings targeting affordability and reliability; cost allocation trends shift transmission burden toward large users (e.g., data centers) .
  • Watchlist: CVOW partnership approvals (VA/N.C./federal), monopile installation pace, SC rate case outcome, and 2024 IRP updates on dispatchable needs .

Financial Appendix and Cross-References

  • Q1 2024 8-K press release and schedules: Revenue, EPS, segment OE, GAAP/operating reconciliation .
  • Q1 2024 earnings call: Weather headwind, guidance affirmation, CVOW LCOE/contingency/% complete, data center demand and ramp, financing details .
  • Related press releases: CVOW “not delayed” (May 1) ; Charybdis milestone (Apr 15) ; dividend declaration (May 7) .
  • Prior quarters for trend: Q4 2023 8-K and call (operating EPS $0.29; CVOW partner agreement; accounting changes) ; Q3 2023 call (CVOW on time/on budget; demand growth; VA legislation) .

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