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DE

DOMINION ENERGY, INC (D)·Q2 2024 Earnings Summary

Executive Summary

  • Q2 2024 GAAP EPS was $0.65; non-GAAP operating EPS also $0.65, with operating earnings up sharply year over year to $563 million from $310 million, driven by improved Millstone availability, favorable weather, regulated investment growth, and rider equity returns .
  • All financial guidance reaffirmed: FY 2024 operating EPS $2.62–$2.87 and FY 2025 operating EPS $3.25–$3.54; management emphasized high confidence in delivering the financial plan and kept dividend guidance intact .
  • Coastal Virginia Offshore Wind (CVOW) remains on time and on budget with installation progress and $73/MWh expected LCOE unchanged; Caribdis vessel costs were updated to ~$715 million with limited EPS impact, and Stonepeak financing progress continues .
  • Dominion highlighted robust demand from data centers; DEV expects 2024 sales growth of 4.5%–5.5%, with multiple peak demand records in July and accelerated transmission build plans to support reliability .

What Went Well and What Went Wrong

What Went Well

  • Operating earnings strengthened: non-GAAP operating EPS of $0.65 vs $0.35 in Q2 2023; segment contributions improved, notably Contracted Energy, aided by the absence of extended Millstone outages and better realized prices .
  • Management reaffirmed multi-year guidance and expressed conviction: “I am highly confident in our ability to deliver on our financial plan,” indicating conservative planning and execution focus .
  • CVOW execution on track: 42+ monopiles installed by late July; permits secured; materials and equipment progressing; LCOE steady at $73/MWh; multi-stakeholder support continues .

What Went Wrong

  • GAAP net income modestly declined year over year ($572 million vs $583 million), reflecting higher interest costs and other expense items despite revenue growth .
  • Caribdis vessel cost estimate increased to ~$715 million from $625 million due to modifications for final turbine loads and financing costs; management expects minimal EPS effect but it’s a cost headwind .
  • Ongoing headwinds include effects from 2023 Virginia legislation at DEV and elevated short-term interest rates expected in 2H, partially offset by weather .

Financial Results

MetricQ1 2023Q2 2023Q1 2024Q2 2024
Operating Revenue ($USD Millions)$3,883 $3,166 $3,632 $3,486
Income from Operations ($USD Millions)$1,079 $594 $833 $805
Net Income attributable ($USD Millions)$981 $583 $674 $572
Reported Diluted EPS (Total)$1.15 $0.67 $0.78 $0.65
Diluted EPS – Continuing Ops$0.81 $0.47 $0.64 $0.55
Non-GAAP Operating ResultsQ1 2023Q2 2023Q1 2024Q2 2024
Operating Earnings ($USD Millions)$515 $310 $483 $563
Operating EPS ($USD)$0.59 $0.35 $0.55 $0.65
Segment Operating Earnings ($USD Millions)Q2 2023Q2 2024
Dominion Energy Virginia$394 $485
Dominion Energy South Carolina$68 $69
Contracted Energy$(45) $100
Corporate & Other$(107) $(91)
Total Operating Earnings$310 $563
Key YoY EPS Drivers (Q2 2024 vs Q2 2023)EPS Impact
Weather (DEV, DESC)+$0.08
Rider equity return (DEV)+$0.10
Millstone outages (planned/unplanned absence vs 2023)+$0.13 (planned) +$0.03 (unplanned)
Margin (Contracted Energy)+$0.04
Impact of 2023 Virginia legislation (DEV)−$0.08
Other items (net)various

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
DEV Sales Growth (Weather-normal)FY 20244.5%–5.5% 4.5%–5.5% Maintained
CVOW LCOEProject life$73/MWh (as of Q1 update) $73/MWh Maintained
Caribdis Vessel CostN/A~$625M ~$715M Raised
DividendQ3 2024$0.6675/sh prior quarter $0.6675/sh declared Jul 31, 2024 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2023 and Q1 2024)Current Period (Q2 2024)Trend
AI/data centers demandHighlighted multi-year data center growth, FRR decision reversal to PJM auction; capex/transmission acceleration; DEV rates below average 4.5%–5.5% DEV sales growth; 9 new data centers YTD; multiple peak demand records; 150+ PJM transmission projects; assessing dispatchable generation and backup fuel Accelerating demand; expanded infrastructure plans
CVOW execution & financingOn time/on budget; Stonepeak 50% noncontrolling partner agreement; high fixed-cost coverage; contingency aligned Installation milestones (≥42 monopiles by late July), permits complete; LCOE $73/MWh unchanged; Affiliates Act approvals progressing; noncontrolling financing expected by year-end Steady execution; financing approvals advancing
Capacity market/PJMReturn to capacity auction starting 2025; auction parameters consistent with load growth view Elevated PJM capacity prices; temporary ~$0.04 headwind in 2H 2025 due to short position until next biennial rates; natural hedge explained Rates reset expected to mitigate; temporary headwind
Regulatory/legalBiennial review settlement; SCC composition updates SC rate case settlement filed; SCC approvals (Affiliates Act) for CVOW financing; NRC license extension at North Anna (Aug) Supportive regulatory backdrop
SMRs/nuclear strategyIRP included SMRs long term; Millstone co-location MOU with NE Edge; earnings plan excludes such assumptions Further exploration of SMRs; reaffirmed Millstone co-location concept; North Anna license extended (post-quarter) Exploratory; regulatory progress on nuclear life extensions

Management Commentary

  • “I am highly confident in our ability to deliver on our financial plan. The post-review guidance has been built to be appropriately but also not unreasonably conservative…” — CFO Steven Ridge .
  • “Our offshore wind project is on time and on budget… we’re confidently on our way to achieving our goal of 70 to 100 monopiles installed during the first of two planned installation seasons.” — CEO Robert Blue .
  • “For full year 2024, we expect DEV sales growth to be between 4.5% to 5.5%, driven by economic growth, electrification and accelerating data center expansion.” — CEO Robert Blue .
  • “Elevated capacity prices… we have a natural hedge… we expect the impact… to be about a $0.04 headwind in 2025, which we fully expect to overcome.” — CFO Steven Ridge .

Q&A Highlights

  • PJM capacity auction impact: Management outlined a temporary ~$0.04 EPS headwind in 2H 2025 due to a short generation position and timing of rate changes; emphasized the natural hedge and recovery in subsequent rates .
  • CVOW progress and Caribdis cost: Caribdis cost increased to ~$715M with ~$55M pure capex and the remainder financing; expected < $0.01 EPS impact in 2025; modifications align with final certified turbine loads .
  • Millstone data center co-location: Ongoing MOU with NE Edge; potential long-term PPA for a portion of output; no assumptions included in current financial plan .
  • Data center cost allocation and rates: SCC proceedings regularly rebalance cost allocations; transmission costs have shifted from residential to large energy users since 2020; focus on fair sharing across classes .
  • South Carolina regulatory: Comprehensive rate case settlement submitted with ~9.94% allowed ROE and ~52.51% equity; net ~1% residential rate increase if approved .

Estimates Context

  • Wall Street consensus estimates from S&P Global were not available at time of analysis due to an access limit, so no beat/miss versus consensus can be assessed. Values would normally be pulled from S&P Global; estimates were unavailable at this time.

Key Takeaways for Investors

  • Non-GAAP operating earnings recovered meaningfully year over year, with segment improvements and Millstone availability supporting Contracted Energy; this underpins the reaffirmed FY 2024 and FY 2025 EPS ranges .
  • CVOW execution remains a central catalyst: steady construction progress, unchanged $73/MWh LCOE, and financing partner approvals nearing; continued on-time/on-budget messaging reduces project risk overhang .
  • Data center-driven load growth is translating into higher DEV sales and accelerated transmission investments; watch upcoming IRP in October for updates to dispatchable generation plans and potential incremental regulated capex .
  • Near-term macro/regulatory watch items: elevated interest rates (short-term), temporary capacity market headwind (2H 2025), and South Carolina rate case approval timeline; the biennial review in 2025 will be key for rate normalization .
  • Dividend stability continues with a $0.6675 quarterly payout declared; management reiterates commitment to current dividend while aiming to restore payout ratio over time through earnings growth .
  • With consensus estimates unavailable, anchor expectations on management’s reaffirmed guidance and operating cadence; monitor Q3/Q4 EPS trajectory given backloaded O&M and rate timing dynamics .
  • Stock narrative likely focuses on execution credibility post-business review, CVOW risk mitigation via partner cost sharing, and tangible load growth from AI/data centers driving rate base expansion over the medium term .