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DTE ENERGY CO (DTE)·Q4 2024 Earnings Summary

Executive Summary

  • FY2024 operating EPS of $6.83 delivered at the high end of original guidance; Q4 operating EPS was $1.51, down year over year versus $1.97 in Q4 2023, driven by lower DTE Electric and Energy Trading contributions and higher Corporate expense .
  • 2025 operating EPS guidance set at $7.09–$7.23 with management “positioned to achieve the high end,” underpinned by utility capex acceleration and RNG tax credits at DTE Vantage .
  • Five-year capital plan increased by $5B to $30B (from $25B), focused on grid reliability and cleaner generation; potential incremental capex upside tied to ~2.1 GW data center load pipeline .
  • Operational reliability improved materially: customers saw ~70% less time without power in 2024, aided by >450 smart reclosers, 850 miles of line upgrades, 3,400 pole replacements, and 4,300 miles of tree trimming .

What Went Well and What Went Wrong

What Went Well

  • Reliability gains: “customers experienced a nearly 70% improvement in time spent without power” with smart automation and aggressive tree-trimming; Sauk Solar (150 MW) commenced operations, and construction began on a 220 MW battery storage center .
  • 2024 operating EPS at the high end; 2025 guide midpoint of $7.16 implies ~7% growth vs 2024 original guidance midpoint; management emphasized targeting the high end supported by RNG tax credits .
  • Constructive regulatory environment: recent DTE Electric rate order and electric distribution audit affirmed investment plan; long-term operating EPS growth target of 6–8% reiterated .

What Went Wrong

  • Q4 sequential and year-over-year EPS compression: operating EPS fell to $1.51 in Q4 2024 from $2.22 in Q3 and $1.97 in Q4 2023; DTE Electric and Energy Trading quarterly contributions were lower, with Corporate more negative .
  • Weather headwinds persisted at DTE Gas: warmer conditions reduced earnings; 2024 was “the warmest winter in over 60 years” affecting segment results .
  • Mark-to-market and one-time adjustments affected reported-to-operating reconciliation: MPSC disallowance of certain capital costs and renewable investment impairment in Q4 impacted reported figures (non-GAAP exclusions) .

Financial Results

EPS – Reported vs Operating (per share)

MetricQ2 2024Q3 2024Q4 2024
Reported EPS ($)$1.55 $2.30 $1.41
Operating EPS ($)$1.43 $2.22 $1.51

Segment Operating Earnings ($USD Millions)

SegmentQ2 2024Q3 2024Q4 2024
DTE Electric$279 $437 $195
DTE Gas$12 $(13) $104
DTE Vantage$14 $33 $78
Energy Trading$31 $25 $39
Corporate & Other$(40) $(22) $(102)
Total Operating Earnings$296 $460 $314

Weather Impact on Operating EPS (per share)

SegmentQ4 2023Q4 2024YTD 2023YTD 2024
DTE Electric$(0.05) $(0.05) $(0.52) $(0.15)
DTE Gas$(0.10) $(0.06) $(0.25) $(0.30)

Cash Flow and Capex

Metric2024 Actual2025 Guidance
Cash from operations ($B)$3.6 $3.3
Total capex ($B)$5.0 $4.77–$4.97
Electric capex ($B)$3.659 $3.735
Gas capex ($B)$0.740 $0.660
Non-utility capex ($B)$0.596 $0.375–$0.575

KPIs and Operating Metrics

KPIQ3 2024 / FY ContextQ4 2024 / FY Context
Smart reclosers installedN/A>450 devices commissioned in 2024
Line upgradesN/A850 miles upgraded in 2024
Poles replacedN/A3,400 poles replaced in 2024
Tree trim milesN/A>4,300 miles in 2024
New substations10 planned/energizing 12 in various levels of commissioning
Renewables in service2,300 MW +1,000 MW coming online; Sauk Solar 150 MW operational
Battery storageN/A220 MW project construction initiated

Note: DTE did not disclose consolidated revenue by quarter in the earnings materials; segment operating earnings are provided instead .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Operating EPSFY2025N/A$7.09–$7.23 Initial 2025 guide; positioned for high end
Operating EPS (context)FY2024$6.54–$6.83 (confirmed Q3) Actual $6.83 Achieved high end
5-year capex plan2025–2029 vs prior$25B (prior plan) $30B current plan Raised by $5B
DividendNext paymentN/A$1.09 per share payable Apr 15, 2025 Maintained regular quarterly declaration
Balance sheet targetOngoingFFO/Debt 15–16%FFO/Debt 15–16% (reiterated) Maintained

Segment guidance for 2025 was discussed qualitatively: utility-driven growth (Electric and Gas), DTE Vantage supported by custom energy solutions and 45Z credits (~$50–$60M annually in 2025–2027), Energy Trading consistency; Corporate & Other pressure from higher interest expense .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024 and Q3 2024)Current Period (Q4 2024)Trend
Data center load growthConservative load outlook; legislation progress; capacity available; targeting affordability benefits Non-binding term sheet with Switch (~1.4 GW) plus a third agreement; total ~2.1 GW potential new load; ~40% sales growth at full ramp; 1 GW near-term capacity; tariff evolution likely Accelerating; pipeline formalizing
Regulatory/audit/PBRElectric distribution audit constructive; IRM expansion sought; PBR docket ongoing with desired symmetry Electric rate order constructive; IRM extension affirmed; continued IRM expansion discussions; PBR remains separate and may be future rate-case incorporated Supportive regulatory posture
Reliability investmentsSmart grid prevented >9,000 interruptions; aim to halve outage duration by 2029 ~70% improvement in outage time in 2024; increased distribution capex and automation Material progress
Supply chainRenewables/battery pipeline progressing; no major constraints Panels secured through mid-2027; battery plant fabrication underway Stable supply pipeline
DTE Vantage strategyRNG/solutions projects ramping; Ford project slated Shift to utility-like, long-term fixed-fee projects; Ford ITC >$50M in Q4 2024; 45Z credits to 2027 Higher-quality earnings profile
Financing/equity cadenceMinimal equity through 2026; strong cash flows Minimal equity ($0–$100M annually) through 2027; modest equity likely from 2028 Balanced funding

Management Commentary

  • CEO on 2024 and 2025 outlook: “We achieved operating EPS of $6.83... Our 2025 operating EPS guidance range is $7.09 to $7.23... we are currently positioned to achieve the higher end of our EPS guidance range this year.” .
  • CFO on segment drivers: “DTE Electric earnings were $1.1 billion for the year... warmer weather and lower storm expenses... DTE Gas... $31 million lower... 2024 was the warmest winter in over 60 years.” .
  • Strategic plan: “Increasing 5-year capital investment by $5 billion... updated plan provides higher quality long-term operating EPS growth... potential longer-term upside to plan from data center growth.” .
  • Reliability: “customers experienced a nearly 70% improvement in time spent without power from 2023 to 2024” with automation and tree-trimming .

Q&A Highlights

  • Data center pipeline: ~2.1 GW potential with Switch and an additional party; ~1 GW near-term capacity; incremental renewables/storage and potential baseload with CCS; tailored tariffs likely for long-dated builds .
  • RNG tax credits: 45Z expected to add ~$50–$60M annually in 2025–2027; creates flexibility to hit the high end or support future years without relying on credits beyond 2027 .
  • IRM expansion: Commission extended IRM; company working to expand scope leveraging audit findings; regular cadence of electric rate filings likely until IRM scale grows .
  • Financing: Minimal equity through 2027 supported by cash flows and tax monetization; modest increases from 2028 to fund growth capex .
  • Energy Trading: Strength in contracted/hedged physical power and gas portfolios to continue; guidance reflects consistency .

Estimates Context

  • S&P Global consensus estimates (EPS, revenue) for Q4 2024, Q3 2024, and Q2 2024 were unavailable due to data access limitations; therefore, beat/miss analysis versus Wall Street is not provided. Values retrieved from S&P Global.*
  • Management’s 2025 operating EPS guidance ($7.09–$7.23) and qualitative segment outlook frame expectations in lieu of consensus .

Key Takeaways for Investors

  • Utility-led growth with higher-quality earnings: 5-year capex lifted to $30B, focused on grid reliability and cleaner generation, underpinning 6–8% long-term operating EPS growth and a 2025 setup at the high end of guidance .
  • Emerging data center catalyst: Formalizing ~2.1 GW potential load creates incremental capex and earnings upside, with immediate capacity to serve and a roadmap for renewables/storage and potential baseload additions .
  • Reliability improvements are tangible and stock-supportive: ~70% reduction in outage duration in 2024 demonstrates execution and supports constructive regulatory outcomes .
  • Near-term EPS cadence: Expect quarterly volatility versus Q3 highs; Q4 softness reflects segment mix and seasonality; full-year delivery at high end reduces execution risk entering 2025 .
  • Funding outlook disciplined: Minimal equity through 2027 and FFO/Debt 15–16% target maintain balance-sheet strength while funding elevated capex .
  • Watch the IRM expansion and rate-case cadence: IRM extension affirmed; further expansion could stretch rate-case intervals and de-risk capex recovery .
  • Dividend consistency: $1.09 per share declared for April 15, 2025; management targets dividend growth in line with operating EPS over time .