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OE

OGE ENERGY CORP. (OGE)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 delivered inline EPS and solid YoY growth: diluted EPS $1.14 vs $1.09 (+4.6% YoY) on operating revenues of $1.045B vs $0.965B (+8.3% YoY), driven by higher recovery of capital investments, partially offset by milder weather and higher O&M and tax expense .
  • Versus S&P Global consensus, EPS was essentially in line ($1.14 vs $1.145*) while revenue missed ($1.045B vs $1.180B*, -11.4%), noting revenue volatility from fuel pass-throughs at regulated utilities; management did not guide revenue .
  • Guidance maintained: Company continues to target the top half of its FY25 EPS range ($2.21–$2.33) with year-to-date weather-normalized load growth of 6.5% and ~7.5% expected for FY25 .
  • Strategic catalysts: Oklahoma pre-approval order anticipated “in a few weeks” for 450 MW, 550 MW CTs on track for 2026, $250M Fort Smith–Muskogee transmission added to plan with CWIP recovery, and “serious” data center negotiations; Oklahoma rate review likely shifts to 2H26 if settlement approved .
  • Customer bills: fuel cost adjustment reduction effective Nov 1 will lower the average residential bill by ~$6.75/month, reinforcing the low-rate narrative and potential demand tailwind .

What Went Well and What Went Wrong

  • What Went Well

    • Capital recovery and growth: YoY EPS and revenue growth were primarily driven by increased recovery of capital investments at OG&E .
    • Constructive regulatory progress and pipeline: Pre-approval decision expected within weeks for 450 MW; 550 MW CTs under construction for 2026; transmission plan expanded with $250M Fort Smith–Muskogee line with CWIP .
    • Demand backdrop remains robust: YTD weather-normalized load +6.5%, with FY25 expected at ~7.5%; management highlights affordability and low rates as demand drivers; CEO: “we remain confident… in the top half of our earnings guidance range” .

  • What Went Wrong

    • Revenue came in below consensus despite YoY growth (fuel pass-through variability): $1.045B actual vs $1.180B* consensus (two estimates), while EPS was in line; revenue variability is less indicative of earnings power for a regulated utility .
    • Weather headwind: Cooling degree days declined (1,288 vs 1,387), and management cited milder weather as a partial offset to capital recovery benefits in the quarter .
    • Holding company drag: Other operations loss widened to $11.6M (–$0.06/sh) from –$6.3M (–$0.03/sh) on higher interest expense, partially offset by tax benefit .

Financial Results

Quarterly trend (oldest → newest)

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Operating Revenues ($USD Millions)$965.4 $747.7 $741.6 $1,045.0
Diluted EPS ($)$1.09 $0.31 $0.53 $1.14
EBIT Margin %32.6%*17 toppers 17.5%*24.8%*32.4%*
EBITDA Margin %47.5%*35.9%*43.7%*46.4%*

Q3 2025 actual vs S&P Global consensus

MetricActualConsensus*Surprise
Diluted EPS ($)$1.14 $1.145*−$0.00
Operating Revenues ($USD Billions)$1.045 $1.180*−$0.135 (−11.4%)

Segment/customer class revenue mix (Q3)

Classification ($USD Millions)Q3 2024Q3 2025
Residential$422.8 $408.0
Commercial$288.8 $319.1
Industrial$79.0 $81.6
Oilfield$68.1 $73.1
Public authorities & street light$86.8 $87.7
Transmission$36.6 $38.8
Integrated market$19.2 $23.6
Other$7.6 $13.1
Total Operating Revenues$965.4 $1,045.0

Operational KPIs

KPIQ3 2024Q3 2025Notes
Total sales (MWh, millions)9.7 9.9
Number of customers904,900 910,464
Weighted avg total fuel & purchased power (¢/kWh)3.448 3.732
Cooling Degree Days (Actual)1,387 1,288 Milder YoY
Weather-normalized load growth (YTD)—6.5% Through Q3
Weather-normalized load growth (FY25E)—~7.5% Company outlook

*Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated EPS Guidance RangeFY 2025$2.21–$2.33; “top half expected” $2.21–$2.33; “top half expected” Maintained
Weather-normalized retail load growthFY 2025Not explicitly provided prior~7.5% expected New/clarified
Oklahoma pre-approval (gen)Multi-yearPre-approval pending [implied]Order expected in “a few weeks” for 450 MW Timing update
Oklahoma rate review timing2025 → 2026Planned end of 2025 (per management)Shift to 2H 2026 if settlement approved Deferred
Transmission Capex addition2027–2029Not in prior plan$250M Fort Smith–Muskogee line; CWIP approved Added
Horseshoe Lake 13/14 CWIPConstructionNot previously requestedRequested CWIP recovery New request

Earnings Call Themes & Trends pipeline Trends

TopicQ1 2025 (prior)Q2 2025 (prior)Q3 2025 (current)Trend
Load growth & demand“Increased customer demand” and strong load growth cited Higher weather-normalized load noted YTD weather-normalized load +6.5%; FY25E ~7.5% Strengthening/accelerating
Generation additionsReliability investments highlighted 550 MW CTs under construction; two CTs proposed by 2029 550 MW CTs on track for 2026; pre-approval for 450 MW soon; ~2,000 MW by 2029 Increasing specificity/visibility
Regulatory cadence——Settlement would move OK rate review to 2H26; constructive outcomes emphasized More clarity
Large loads/data centers——“Very serious negotiations”; large load tariff to be filed per settlement; timing/tariff interplay discussed Emerging growth vector
Transmission expansion——$250M Fort Smith–Muskogee added; FERC formula/CWIP Growing capex
Capital allocation/dividend——Targeting 65–70% payout; reassess post-target Stable policy articulation

Management Commentary

  • “Our third quarter results demonstrate the strength of our business… With approximately 550 MW of new natural gas turbines under construction and more planned, we are proactively addressing the region’s growing energy needs as we maintain some of the lowest rates in the nation for our customers.” — Sean Trauschke, CEO .
  • “We remain confident in our plans to deliver in the top half of our earnings guidance range… we have a pre-approval request in Oklahoma and expect an order in a few weeks… When Horseshoe Lake units 13 and 14 come into service in 2029, we will have added approximately 2,000 MW over an 11-year period.” — CEO prepared remarks .
  • “Year-over-year customer growth… just under 1% in the third quarter. Our weather normalized load growth was historically strong once again at 6.5% through the third quarter… We expect total retail normalized load growth of approximately 7.5% in 2025.” — CFO .
  • “We’ve updated our capital plan to include the Fort Smith to Muskogee transmission line… $250 million… primarily recovered through our FERC formula rate… approval to utilize CWIP recovery during construction.” — CFO .
  • “We notified Oklahoma customers… they will see a decrease in their monthly bill… average residential customer bill will be approximately $6.75 lower per month [Nov 1].” — CEO .

Q&A Highlights

  • Rolling capital updates and approvals: Management anticipates near-term approval under pre-approval case and will analogs new filings and RFPs in a “continuous flow of updates,” incorporating generation additions as approvals come through .
  • SPP transmission pipeline: Robust 2025 SPP ITP seen as an opportunity; details pending upcoming SPP milestones; company added a $250M line and sees further upside potential .
  • Large-load tariff and data center negotiations: Company will file a large-load tariff per settlement; negotiations characterized as “very serious”; potential announcements would be followed by commission filings; capacity needs contemplated in the last RFP and planning .
  • Load growth timing: 2025 growth outlook trimmed to ~7.5% due to “chunky” load timing; one customer delayed ~one quarter; implies potential carryover into 2026 .
  • Dividend policy and rate cadence: Targeting 65–70% payout ratio, with reassessment post-target; if settlement approved, OK rate case shifts to 2H26, though overall filing philosophy unchanged .

Estimates Context

  • Q3 2025 EPS: $1.14 actual vs $1.145* consensus (5 estimates) — essentially in line .
  • Q3 2025 Revenue: $1.045B actual vs $1.180B* consensus (2 estimates) — miss of ~$135M (−11.4%) .
  • Management does not guide revenue; EPS is the primary guided metric for FY25, with “top half” of $2.21–$2.33 reiterated .
  • Implication: Limited estimate recalibration for EPS given inline print; revenue shortfall likely less consequential for valuation given fuel pass-through dynamics at regulated utilities.

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Inline EPS with YoY growth, guidance reaffirmed to top half of range — supports stable near-term earnings trajectory .
  • Revenue below consensus but less indicative for a regulated utility; focus remains on earned returns and regulatory execution .
  • Strong demand backdrop and low-rate positioning underpin structural load growth (YTD +6.5%; FY25E ~7.5%) — a differentiator vs peers .
  • Visibility increasing on growth capex: 550 MW CTs (2026), 450 MW pre-approval imminent, ~$250M transmission added with CWIP — accelerates rate base and supports 5–7% EPS CAGR goal .
  • Data center/large-load opportunity is advancing; upcoming large-load tariff filing and potential contract announcements are notable catalysts .
  • Regulatory catalysts: Oklahoma pre-approval decision in weeks; Oklahoma rate case cadence likely shifts to 2H26, smoothing near-term execution risk .
  • Customer bill relief (−$6.75/month from Nov 1) reinforces affordability narrative and could support incremental demand/customer satisfaction .

Notes:

  • All margins and consensus values marked with an asterisk (*) are Values retrieved from S&P Global.