Sign in

You're signed outSign in or to get full access.

ME

MGE ENERGY INC (MGEE)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered solid year-over-year growth: operating revenue rose to $159.5M and GAAP net income increased to $26.5M, with diluted EPS at $0.72 versus $0.66 in Q2 2024 .
  • EPS slightly missed S&P Global consensus by $0.01 (actual $0.72 vs $0.73 estimate), while Q1 2025 was a strong beat and Q4 2024 was a notable miss .
  • Key drivers were rate base investment growth and warmer-than-normal weather lifting electric residential sales ~5%; electric net income rose $3.9M YoY .
  • Strategic assets energized: Darien Solar (25 MW) in March and Paris BESS (11 MW) in June, enhancing reliability and supporting earnings .
  • Near-term stock reaction catalysts: ongoing rate-base expansion via renewables/storage, weather sensitivity, and regulatory progress on programs; formal financial guidance was not provided in Q2 disclosures .

What Went Well and What Went Wrong

What Went Well

  • Rate base growth and weather tailwinds: “Rate base investment growth and weather impacts drove our second-quarter results.”
  • Electric profitability: electric net income increased $3.9M YoY, aided by new renewable and storage assets put in service (Darien Solar, Paris BESS) .
  • Residential demand: electric residential sales increased ~5% on warmer-than-normal weather, supporting revenue and earnings .

What Went Wrong

  • Slight EPS miss vs consensus: Q2 diluted EPS $0.72 versus $0.73 consensus*, a $0.01 shortfall despite healthy YoY growth *.
  • Limited Street coverage: only one EPS estimate in recent quarters*, which increases headline sensitivity and reduces visibility into expectations*.
  • No formal guidance: the press release and 8-K furnished results and an investor presentation, but did not include quantified forward guidance on revenue/margins/OpEx .

Financial Results

Consolidated Performance vs Prior Periods

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Operating Revenues ($USD Thousands)$145,713 $171,415 $218,970 $159,452
Operating Income / EBIT ($USD Thousands)$29,735 $27,642 $52,865 $34,223
Net Income ($USD Thousands)$23,794 $22,022 $41,592 $26,498
Diluted EPS ($USD)$0.66 $0.61 $1.14 $0.72
EBIT Margin %22.17%*19.67%*25.54%*23.27%*
Net Income Margin %16.33%*14.26%*18.99%*16.62%*

Values with * retrieved from S&P Global.

KPIs and Operating Drivers

KPIQ2 2024Q1 2025Q2 2025
Electric residential sales growth (%)——~5%
Electric net income YoY change ($USD Millions)——+$3.9
Darien Solar capacity (MW)—25 25
Paris Battery Energy Storage System capacity (MW)——11

Note: MGEE reports consolidated results; no detailed segment revenue table was provided in Q2 disclosures. Commentary indicated gas net income was steady vs prior year .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Formal financial guidance (revenue, margins, OpEx, OI&E, tax)Q2 2025Not providedNot providedMaintained “no guidance”
Dividend (regular quarterly)Q2 2025$0.45 per share (declared May 20, 2025)$0.45 per share, payable June 15, 2025Maintained

Subsequent development (post-Q2): Inside View in September notes a dividend rate increase to $0.4750 per share in August 2025 (payable Sept. 15, 2025), marking 50 consecutive years of increases .

Earnings Call Themes & Trends

Public earnings call transcript was not available in our document catalog for Q2 2025; themes reflect press release and recent disclosures .

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
Renewable investment and asset growthParis solar completed Dec 2024; continued rate-base growth Darien Solar (25 MW) operational in March; asset growth Paris BESS in June; renewables/storage supporting earnings Continuing/expanding
Weather impacts on demandWarmer-than-normal 2024 reduced gas deliveries YoY Relatively normal weather; gas retail sales +19% YoY; electric +3% Warmer-than-normal weather drove ~5% electric residential sales growth Continuing tailwind (electric)
Regulatory/macro programs2024 commentary on operating environment n/aProposed local solar & RNG programs; PSC approvals highlighted (Inside View) Advancing programs
Grid reliability and storagen/an/aReliability enhanced by Paris BESS commissioning Improving
Customer growth/engagementn/an/aContinued service footprint; newsletters emphasize initiatives Stable

Management Commentary

  • “Rate base investment growth and weather impacts drove our second-quarter results.” (Q2 earnings press release)
  • “MGE shares with our customers the goal of a more sustainable energy future…reducing carbon emissions, increasing our use of cost-effective, locally generated renewable energy and advancing new technologies to benefit all our customers.” — Jeff Keebler, Chairman, President and CEO (Sunnyside Solar Energy Center announcement) .
  • “By also working with customers to advance energy efficiency and electrification, we can achieve our sustainable energy goals.” — Jeff Keebler .
  • June Inside View highlighted regulatory approvals for more local solar, arrearage management, proposed rate changes, and new EV charging initiatives .

Q&A Highlights

  • A public Q2 2025 earnings call transcript was not found; Q&A highlights are unavailable in the document set [List: 0 earnings-call-transcript; see Q2 2025 press release and 8-K furnished materials] .

Estimates Context

PeriodPrimary EPS Consensus MeanActual Primary EPSBeat/Miss# of EPS Estimates
Q4 2024$0.84*$0.61 Bold miss: -$0.23*1*
Q1 2025$0.98*$1.14 Bold beat: +$0.16*1*
Q2 2025$0.73*$0.72 Bold slight miss: -$0.01*1*

Revenue consensus was not available; only actual revenues were reported in company materials .

Values with * retrieved from S&P Global.

Implications:

  • The slight Q2 EPS shortfall reflects the interplay of weather benefits and timing of rate-base earnings contributions; coverage depth is thin (one estimate), which magnifies small variances*.
  • Q1’s sizable beat suggests volatility tied to winter weather and gas volumes (gas retail sales +19% YoY) .

Key Takeaways for Investors

  • Asset-driven growth continues: commissioning of Darien Solar and Paris BESS supports rate-base expansion and earnings durability .
  • Weather remains a meaningful driver: warmer-than-normal conditions lifted residential electric demand; monitor normalization risk into Q3/Q4 .
  • Limited Street coverage: with only one EPS estimate, reported results may surprise on small deviations; consider intrinsic analysis over consensus*.
  • No formal guidance: position sizing should reflect absence of quantified outlook; use regulatory and project milestones as proxies .
  • Dividend stability with a track record: $0.45 regular dividend in Q2; subsequent increase to $0.4750 in August underscores shareholder returns .
  • Regulatory and program momentum: Inside View points to approvals for local solar and EV infrastructure; these support long-term decarbonization and customer engagement .
  • Near-term focus: monitor residential demand trends, project ramp impacts on earnings, and any PSC actions or rate case outcomes that affect 2026/2027 trajectories .

Values with * retrieved from S&P Global.