HAWAIIAN ELECTRIC CO INC (HAWEL)·Q3 2025 Earnings Summary

Executive Summary

• Q3 2025 showed stabilized utility performance with GAAP diluted EPS of $0.18 and Core diluted EPS of $0.19; Hawaiian Electric utility revenue was $787.4M and utility net income was $37.3M .
• Year-over-year comparisons are distorted by 2024 wildfire accruals; sequentially, revenue rose +6% vs Q2 2025 and utility net income was modestly lower due to lower tax credit benefits and wildfire-related expenses .
• Liquidity improved meaningfully: credit facility capacity expanded to $600M and a $500M unsecured notes offering closed in September; management reiterated wildfire settlement first payment no earlier than Q1 2026, reducing near-term cash pressure .
• External coverage indicates Core EPS of $0.19 modestly beat consensus by ~$0.01; S&P Global consensus EPS/Revenue for HAWEL was unavailable to us for Q3 2025; we flag potential upward estimate revisions on capex/regulated returns and lower fuel costs .

What Went Well and What Went Wrong

• What Went Well

  • Improved liquidity and market access: “expanded our credit facility capacity to $600 million from $375 million, and successfully completed our first significant issuance of Hawaiian Electric debt since the Maui wildfires…approximately $500 million in debt issuance proceeds” (Scott Seu) .
  • Utility operations were efficient; utility net income rebounded YoY given absence of large wildfire accruals and ARAM revenue mechanisms, with $6M higher revenues and flat O&M .
  • Wildfire settlement process advancing; base case first payment no earlier than Q1 2026, maintaining cash flexibility (Scott Seu) .

• What Went Wrong

  • Core utility net income declined vs prior year ($40M vs $44M) and some tax credit benefits were lower by ~$3M YoY in Q3 .
  • Wildfire-related costs persisted (pretax legal/other), partially offset by deferrals and insurance recoveries; holding-company Core net loss remained ($6.8M) .
  • Revenues down -5% YoY on lower fuel pass-through and purchased power vs Q3 2024 (which also had large wildfire accruals), highlighting sensitivity to fuel/power costs .

Financial Results

Note: Asterisked values retrieved from S&P Global.

Segment breakdown (income from continuing operations for common stock):

Key operating KPIs:

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We expanded our credit facility capacity to $600 million… and successfully completed our first significant issuance of Hawaiian Electric debt since the Maui wildfires… enhance liquidity and add financial flexibility” — Scott Seu, President & CEO .
• “Our base case still assumes that our first settlement payment will occur no earlier than the first quarter of 2026” — Scott Seu .
• Q2 context: “Legislation… establishing a liability cap for future wildfires, and authorizing securitization to finance $500 million in wildfire safety improvements” — Scott Seu .
• Q1 context: “Critical legislation… appropriating funds for the State’s contribution… directing the PUC to establish an aggregate liability cap” — Q1 release .

Q&A Highlights

• Rate rebasing process: PUC approved collaborative non-rate case rebasing; proposal due Jan 7, 2026; fallback formal rate case in 2H 2026 if needed .
• Liquidity/Cash: Utility had ~$544M available liquidity; $500M notes and increased credit facilities reinforce funding for capex and settlement plans .
• Dividend: Utility board approved $10M quarterly dividend to HEI for Q3, continuing policy reinstated earlier in 2025 .
• Capex trajectory: Management outlined ~$1.75–$2.35B (2026–2028), funded by retained earnings and September debt issuance .

Estimates Context

• S&P Global consensus for Q3 2025 EPS/Revenue/EBITDA for HAWEL was unavailable in our data pull; we cannot provide an SPGI-based comparison.
• External coverage (Seeking Alpha) indicates Core EPS of $0.19 beat by ~$0.01, implying a modest upside vs street expectations; investors should treat this as directional rather than official SPGI consensus .
• S&P Global GetEstimates results returned only actuals and no consensus values for EPS; Revenue/EBITDA “actual” figures align with reported utility results (revenue $787.4M; EBITDA ~$137.5M) for Q3 2025. Values retrieved from S&P Global.

Key Takeaways for Investors

• Liquidity improved materially via $600M credit capacity and $500M unsecured notes; reduces near-term financing risk and supports elevated capex through 2028 .
• Settlement timing clarified: first payment no earlier than Q1 2026; expect continued focus on insurance recoveries/deferrals to smooth P&L and cash .
• Earnings normalization continues: Q3 Core EPS $0.19 and utility net income $37.3M reflect efficient operations and lower fuel costs; monitor sequential trend into Q4 .
• Regulatory pathway firming: collaborative rate rebasing due Jan 2026 may expedite revenue normalization ahead of 2027 PBR period—potentially constructive for ROE .
• Capex ramp is substantial ($1.75–$2.35B 2026–2028), with legislative support (liability cap, securitization) aiding affordability; higher rate base likely drives medium-term earnings power .
• Fuel cost tailwinds (lower $/bbl) plus kWh sales growth support margins; watch purchased power mix and ARAM impacts .
• Near-term trading: headline risk around settlement approval timelines and regulatory milestones; medium-term thesis: improving liquidity, regulatory clarity, and rate base growth.

References:

• Q3 2025 8-K and Exhibit 99 (press release, financial tables) .
• Q2 2025 8-K and Exhibit 99 (press release, financial tables) .
• Earnings call transcript and webcast references .
• Debt financing press release .
• Capex coverage .