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OE

OGE ENERGY CORP. (OGE)·Q4 2024 Earnings Summary

Executive Summary

  • OGE delivered a solid quarter and beat its full‑year plan: FY24 diluted EPS was $2.19, above guidance, with Q4 diluted EPS of $0.50 (vs $0.24 LY) driven by the Oklahoma rate settlement recognition, exceptional load growth, and lower O&M; partial offsets were higher taxes and interest expense .
  • 2025 guidance set at $2.21–$2.33 (midpoint $2.27), a 7% rebase vs last year’s original midpoint, and long‑term EPS growth of 5%–7% now anchored to the higher 2025 base .
  • Load momentum remains the core story: weather‑normalized load grew 7.6% in 2024, and management expects ~8.5% weather‑normalized growth in 2025, supported by 1.2% customer growth and broad‑based C&I strength .
  • Potential upside catalysts include large‑load wins (data centers): management referenced a pipeline of roughly half a dozen opportunities, each ~250–500 MW, with intent to own generation and file mid‑year for resource additions; SPP ITP transmission NTCs are also pending and not in the current plan .

What Went Well and What Went Wrong

What Went Well

  • Load and customer growth were exceptional: 2024 weather‑normalized load +7.6% with customer count +1.2%, driving stronger‑than‑planned results and enabling a higher 2025 EPS base .
  • Regulatory progress supported Q4: interim rate order recognition in Oklahoma plus strong load and lower O&M drove Q4 OG&E net income up sharply YoY (EPS $0.55 vs $0.24) .
  • Financial posture remains strong: management targets FFO/debt of ~17% through the plan with no external equity beyond DRIP, and sees capacity to issue up to ~$350m of long‑term debt at OG&E in 1H25 .

Selected quotes:

  • “We reported consolidated earnings exceeding the top end of our guidance… establishing a higher base for growth going forward.” — CEO Sean Trauschke .
  • “We are setting the 2025 midpoint 7% higher than ‘24’s original midpoint… and extending [5%–7%] through ‘29.” — CFO Chuck Walworth .

What Went Wrong

  • Cost headwinds: higher depreciation and interest on a growing asset base, and higher income taxes pressured results (Q4 and FY) despite revenue strength .
  • Holding company drag: “Other operations” loss widened on higher interest expense (Q4 loss $8.5m vs $0.4m LY; FY24 loss $28.4m vs $9.6m) .
  • Input cost backdrop: total fuel and purchased power cost per kWh rose QoQ into Q4 (3.751¢ vs 3.448¢ in Q3), and analysts probed turbine/generation supply tightness for future additions .

Financial Results

Note: Quarterly “Total operating revenues” reflect OG&E (the utility), which equals consolidated revenues on an annual basis in 2024 and historically closely tracks consolidated quarterly revenues .

MetricQ2 2024Q3 2024Q4 2024
Total Operating Revenues ($USD Millions, OG&E)$662.6 $965.4 $760.5
Prior-year Revenues (same qtr, $MM)$605.0 $945.4 $566.7
Consolidated Net Income ($MM)$102.3 $218.7 $101.9
Diluted EPS (Consolidated)$0.51 $1.09 $0.50
OG&E EPS Contribution$0.54 $1.12 $0.55
Other Operations EPS Contribution($0.03) ($0.03) ($0.05)

Segment breakdown (Q4 and FY 2024):

MetricQ4 2024Q4 2023FY 2024FY 2023
OG&E Net Income ($MM)$110.4 $48.6 $469.9 $426.4
Other Operations Net Income ($MM)($8.5) ($0.4) ($28.4) ($9.6)
OGE Consolidated Diluted EPS$0.50 $0.24 $2.19 $2.07

Operating KPIs (OG&E):

KPIQ2 2024Q3 2024Q4 2024
Total Sales (MWh, MM)8.0 9.7 7.7
Customers (period-end)902,303 904,900 906,952
Total Fuel & Purchased Power Cost per kWh (¢)2.321 3.448 3.751
Cooling Degree Days (Actual)740 1,387 174
Heating Degree Days (Actual)117 — 979

Quarter detail and drivers:

  • Q4 revenue rose to $760.5m, up ~34% YoY, with EPS at $0.50; OG&E’s surge reflected interim rate order recognition, exceptional load, and lower O&M, offset by higher taxes/interest .
  • Q3 EPS was $1.09 vs $1.20 LY (depreciation, interest, O&M and taxes offset load growth; rates reserved pending final order) .
  • Q2 EPS was $0.51 vs $0.44 LY (warmer weather and load growth, partially offset by higher depreciation) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated EPSFY 2024$2.06–$2.18; pointed to top end after Q3 Actual $2.19 Beat prior range (above top end)
Consolidated EPSFY 2025n/a$2.21–$2.33 (midpoint $2.27) New; +7% vs prior year’s original midpoint
Long‑term EPS CAGR2025–20295%–7% off 2024 base 5%–7% off higher 2025 midpoint Rebased upward
OG&E EPS (component)FY 2025n/a$2.43 per share New
Holding Co. EPS (component)FY 2025n/a($0.16) per share New
Dividend per ShareQ4 2024$0.42125 declared Sept. 2024 —Maintained
Dividend per ShareQ2 2025—$0.42125 declared for Apr. 25, 2025 pay date Maintained
Payout PolicyOngoing—Target 65%–70% payout Affirmed
Load Growth (weather‑norm.)FY 2025—~8.5% expected by year‑end New quantitative outlook
Balance SheetMulti‑year—FFO/debt ~17%, no external equity beyond DRIP; up to ~$350m OG&E debt 1H25 Affirmed plan details

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024, Q3 2024)Current Period (Q4 2024)Trend
Load growthQ2: Raised 2024 load outlook to 4%–6%; year‑to‑date +5.8%; “each class >2%” . Q3: Weather‑norm +8.4% in quarter; customer +1.2% .FY24 +7.6% weather‑normalized; expecting ~8.5% in 2025 .Accelerating/High
Data centers/large loadQ2: ~6 opportunities; requests 250–500 MW; timing uncertain . Q3: Stillwater discussed but details withheld; contracts/cost allocation approach under consideration .Half‑dozen opportunities at 250–500 MW each; filings likely mid‑year; intent to own generation .Building pipeline
Resource plan (IRP/RFP)Q2: RFPs underway; aim to layer capacity, double DSM/DR to 337 MW 5‑yr .Q3: Filing for RFP approvals 1H25; consider IRP update; explore uprates .Moving to execution (mid‑year filings)
Regulatory cadenceQ2: Consistent cadence; pursue formula rate mechanisms .Q4: Plan mid‑year Oklahoma rate case and generation recovery filing; Arkansas filings at year‑end; pursue formula rates at commission .Active filings in 2025
Balance sheet/capitalQ2: No equity in 5‑yr plan; FFO/debt ~17% . Q3: Same; strong ratings; no maturities until 2027 .Same, plus up to ~$350m OG&E debt in 1H25 .Stable/Supportive
Technology/AIQ2: Digital self‑service driving lower calls and cost . Q3: Reliability automation emphasized .“Use automation and AI to gain efficiencies and reduce costs” .Ongoing adoption
Supply chainQ3: Noted; evaluated uprates and availability .Analyst concern on turbine tightness; mgmt sees adequate visibility via RFP process .Watch item

Management Commentary

  • Strategic focus: “We’re laser‑focused on reliability, growth and affordability… The investments we make deliver results, build these communities and present a deep and diverse set of opportunities” — CEO .
  • Rebased growth: “Setting a guidance midpoint for 2025 that is 7% higher than a year ago… We expect to continue to grow 5% to 7% annually from this new midpoint” — CEO .
  • 2025 outlook and plan: “Consolidated earnings at $2.27 per share… expect ‘25 to be another year of exceptional weather‑normalized growth of 8.5%… FFO to debt ~17%… no need for external equity other than a modest annual DRIP… up to $350 million [debt] in the first half of the year” — CFO .
  • Large‑load strategy: “Intent to own the majority of these assets… may have to bridge a little bit… but it is our intent to own” — CEO .

Q&A Highlights

  • Data center pipeline and sizing: Pipeline of approximately six opportunities at roughly 250–500 MW each; details (e.g., Stillwater) remain confidential; announcements may come via counterparties, with follow‑on regulatory filings for capacity .
  • Dividend policy: Payout ratio targeted at 65%–70% of earnings; message unchanged .
  • 2025 load growth and regulatory lag: Management expects ~8.5% weather‑normalized growth; load helps mitigate regulatory lag; rate case filing planned mid‑year .
  • Resource adequacy and supply chain: Company is negotiating RFPs, evaluating uprates (~100 MW potential), and using DR/EE and controllable crypto load to manage capacity; sees adequate visibility on turbine availability for contemplated needs .
  • SPP ITP transmission: Potential incremental CapEx from SPP ITP notice‑to‑construct is not yet embedded; to be added upon NTC finalization .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was not available at the time of this analysis due to data access limits; therefore, we cannot present a vs‑consensus comparison for the quarter. We anchor comparisons to company guidance and actuals where disclosed .
  • Implications: Given FY24 EPS of $2.19 exceeded guidance and the company rebased the 2025 midpoint higher by 7%, Street models are likely to move up near-term on load strength and regulatory progress; longer‑term models should reflect 5%–7% EPS CAGR off the higher 2025 base .

Key Takeaways for Investors

  • Load-driven growth engine intact: Broad‑based C&I and residential momentum (FY24 weather‑normalized +7.6%) underpins 2025 ~8.5% growth outlook and a 7% EPS guidance rebase .
  • Regulatory execution is central in 2025: Expect mid‑year Oklahoma rate case and generation recovery filings; Arkansas GRC/FRP at year‑end; constructive outcomes would support the 5%–7% CAGR .
  • Optionality from large loads: Data center pipeline (250–500 MW each) offers upside to load and CapEx; cost allocation/contracting will be designed to protect core customers and earnings quality .
  • Capex/financing capacity without equity: Plan supports FFO/debt ~17% with no external equity beyond DRIP; up to ~$350m OG&E debt in 1H25 provides funding flexibility .
  • Rate base growth levers: RFP resource additions, uprates (~100 MW), and SPP ITP transmission (pending NTCs) represent incremental investable opportunities not fully in plan .
  • Dividend remains steady: Policy targets 65%–70% payout; recent declarations maintained the $0.42125 quarterly rate .
  • Watch items: Supply chain/turbine availability, timing of large‑load commitments, and execution timeline for mid‑year filings (potential catalysts for re‑rating) .

Appendix: Additional Quarterly Context (prior two quarters)

  • Q3 2024: EPS $1.09 vs $1.20 LY; load strong but higher D&A/interest/O&M and taxes pressured YoY; 2024 EPS expected at top of range at the time; RFP filing planned for 1H25 .
  • Q2 2024: EPS $0.51 vs $0.44 LY; raised load outlook to 4%–6%; affirmed 5%–7% LT EPS CAGR; pursued cadence of cases and formula mechanisms .

Sources:

  • Q4 2024 8‑K and Press Release (Feb 19, 2025): quarterly drivers, FY results, guidance, dividend, and detailed financial/statistical data .
  • Q4 2024 Earnings Call Transcript (Feb 19, 2025): management commentary, guidance framework, load outlook, large‑load pipeline, financing .
  • Q3 2024 8‑K/Call (Nov 5, 2024): quarterly results and load detail .
  • Q2 2024 8‑K/Call (Aug 7, 2024): quarterly results and strategic updates .
  • Dividend press release (Sept 23, 2024): dividend rate confirmation .