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XCEL ENERGY INC (XEL)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 EPS of $0.84 missed consensus ($0.92*) and declined year-over-year due to front-loaded O&M, higher depreciation and interest; revenue of $3.906B was slightly below Street ($3.932B*) .
  • Management reaffirmed 2025 ongoing EPS guidance of $3.75–$3.85 and reiterated long-term EPS growth of 6–8%; guidance assumptions include ~3% weather-normalized electric sales growth and constructive regulatory outcomes .
  • Tariff exposure across the $45B 2025–2029 base capex plan estimated at ~2–3%, described as modest and manageable; battery storage cited as the biggest area of exposure with supply-chain diversification underway .
  • Regulatory momentum: unanimous settlements filed for Colorado Wildfire Mitigation Plan (~$1.9B, with planned securitization of $1.2B) and Texas System Resiliency Plan ($490M revised) with decisions expected by Q3 2025 .
  • Wildfire litigation update: Smokehouse Creek accrual raised to $290M (before insurance; ~$500M coverage), with 151 of 225 claims resolved; Marshall Fire trial structure set (liability first, damages later) with unusual new causation theories in plaintiff expert reports .

What Went Well and What Went Wrong

What Went Well

  • Reaffirmed 2025 EPS guidance ($3.75–$3.85) and cited confidence in delivering for the 21st year in a row; “we remain confident in our ability to deliver on our earnings guidance” .
  • Strong regulatory pipeline and growth visibility: Minnesota IRP approval (nearly 5 GW wind/solar/storage/gas by 2030), SPS RFP targeting 3.2 GW accredited capacity by 2030, Colorado ERP indicating 5–14 GW, supporting a $10B+ incremental investment backlog .
  • Data center demand broadening across states with three near-term contracts targeted by fall; “we have signed agreements in three different states today” and robust inbound pipeline .

What Went Wrong

  • EPS declined YOY ($0.84 vs $0.88) on higher O&M (+$81M), depreciation (+$70M), and interest (+$41M); the O&M increase was front-loaded (nuclear outage amortization, insurance, benefits, storm/vegetation) .
  • Slight revenue/EPS miss versus Street; consensus EPS $0.92* and revenue $3.932B* versus reported $0.84 and $3.906B .
  • Wildfire liabilities and insurance premiums remain an overhang; Smokehouse Creek estimated losses increased to $290M (lower bound), with risks beyond insurance coverage in extreme scenarios .

Financial Results

Consolidated P&L and Key Items (USD)

MetricQ1 2024Q3 2024Q4 2024Q1 2025
Revenues ($MM)$3,649 $3,644 $3,120 $3,906
Net Income ($MM)$488 $682 $464 $483
Diluted EPS ($)$0.88 $1.21 $0.81 $0.84
Operating Income ($MM)$679 $911 $347 $677
O&M Expenses ($MM)$605 $655 $618 $686
Depreciation & Amort. ($MM)$658 $681 $702 $728
Total Operating Expenses ($MM)$2,970 $2,733 $2,773 $3,229
Interest Charges & Financing Costs ($MM)$277 $305 $297 $309

Q1 2025 vs Wall Street Consensus

MetricActualConsensusSurprise
EPS ($)$0.84 $0.919*-$0.079 (miss)
Revenue ($MM)$3,906 $3,932*-$26 (miss)
Values marked with * retrieved from S&P Global.

EPS Contribution by Subsidiary (Q1 2025)

SubsidiaryDiluted EPS Contribution
PSCo$0.45
NSP-Minnesota$0.32
SPS$0.10
NSP-Wisconsin$0.07
WYCO (Equity Method)$0.01
Regulated Utility Total$0.95
Xcel Inc. & Other($0.11)
GAAP & Ongoing EPS$0.84

Sales and Weather Impacts (Q1 2025)

ItemImpact
Weather EPS impact vs normal (total)+$0.013
Weather/leap-year adjusted total retail electric sales growth (Xcel Energy)+1.9%

Electric & Gas Revenue Drivers (Q1 2025 vs 2024)

DriverElectric ($MM)Natural Gas ($MM)
Fuel/Purchased Power Recovery+$61 +$30
Regulatory Outcomes+$29 +$57
Non-Fuel Riders+$58 —
Weather (net)+$14 +$13
PTCs Flowed to Customers-$16 —
Conservation (offset)-$7 +$20
Other, net+$11 -$2
Total Change+$150 +$114

Guidance Changes

MetricPeriodPrevious Guidance (Feb 6, 2025)Current Guidance (Apr 24, 2025)Change
Ongoing EPSFY 2025$3.75–$3.85 $3.75–$3.85 Maintained
Weather-normalized retail electric salesFY 2025~3% ~3% Maintained
Weather-normalized firm natural gas salesFY 2025~1% ~1% Maintained
Capital rider revenue (net of PTCs)FY 2025$260–$270MM $200–$210MM Lowered
O&M expense growthFY 2025~3% ~3% Maintained
Depreciation expenseFY 2025+$210–$220MM +$210–$220MM Maintained
Property taxesFY 2025+$55–$65MM +$45–$55MM Lowered
Interest expense (net of AFUDC-debt)FY 2025+$165–$175MM +$165–$175MM Maintained
AFUDC - equityFY 2025+$110–$120MM +$110–$120MM Maintained
Dividend (quarterly)Near term$0.5475 (Q4) $0.57 (Q1/Q2 declaration) Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Data centers~8.9GW pipeline, 25% expected contracting in 5-year plan; signed Meta, QTS; MN land sale progressing “Three” contracts in construction; broadened interest beyond MN Contracts targeted by fall across CO/MN/WI; AQ studies for thousands of MW in SPP; robust pipeline Strengthening
Tariffs/macroPrior experience with tariffs (Trump/Biden); procurement actions; AD/CVD vigilance Expect tariffs; projects not on federal lands; permitting manageable 2–3% capex exposure; vendor discussions underway; storage exposure noted; AD/CVD impact not expected Manageable/modest
Regulatory/legal (wildfire mitigation)CO WMP filed; TX SRP filed; decisions anticipated 2025 Insurance premium deferrals sought; decisions by year-end CO WMP unanimous settlement incl. securitization; TX SRP unanimous settlement; decisions expected by Q3 Constructive
Wildfire litigationSmokehouse Creek accrual $215MM; Marshall trial set Sept 2025, liability first Accrual still $215MM; venue in Boulder; liability-first trial Smokehouse Creek accrual raised to $290MM; 151/225 claims resolved; Marshall plaintiffs added new theories (telecom, UFO) Elevated attention
Tax credit transferabilityMonetizing ~$400–$500MM in 2024; ~$700MM annually forward; bilateral deals $700MM/yr embedded; bilateral with Fortune 500 buyers Reiterated support; safe-harbor provides runway; alternatives (30-year PTC flowback) could mitigate equity needs Stable/supportive
Resource planningMN settlement (720MW CT + 300MW BESS; 4.2GW renewables/storage); CO ERP 5–14GW CO Power Pathway transmission; approvals in MISO/SPP add $3–4B transmission Need 15–29GW new gen by 2031; SPS NM portfolio selection Q2; CO ERP decision fall Scaling up

Management Commentary

  • “We anticipate that we will need to deliver between 15,000 and 29,000 megawatts of new generation by year-end 2031 to serve our customers and communities.” — CEO Bob Frenzel .
  • “We estimate that our total tariff exposure on our $45 billion base capital plan for 2025 to 2029 is approximately 2% to 3%.” — CEO Bob Frenzel .
  • “We remain confident and reaffirm our ability to deliver earnings within our $3.75 to $3.85 guidance range for the year.” — CFO Brian Van Abel .
  • “We reached a constructive settlement on our updated $1.9 billion wildfire mitigation plan… and in Texas… $500 million system resiliency plan.” — CFO Brian Van Abel .

Q&A Highlights

  • Transferability and estimates: Management does not expect transferability to be revoked for in-service/safe-harbored projects; alternative PTC flowback (over asset life) could mitigate near-term equity needs if rules changed .
  • Tariff exposure cadence: Vendor discussions ongoing; supply base diversification (e.g., transformers with nine suppliers including five domestic) to manage impacts .
  • Wildfire mitigation settlements: CO WMP unanimous settlement includes securitization (~$1.2B) and insurance deferral extension; TX SRP settlement around ~$490M spend with deferrals .
  • Marshall Fire: Liability-first trial in Sept 2025; plaintiffs introduced new theories (telecom contact, “unidentified flying object”), which PSCo disputes; pole attachment indemnities seen as strong .
  • Sales outlook: 2025 electric sales growth reaffirmed at ~3%; oil & gas sector strength; early data center pipeline robust across geographies .

Estimates Context

  • Q1 2025 results missed Street: EPS $0.84 vs $0.919* and revenue $3.906B vs $3.932B* (EPS -$0.079; revenue -$26MM). 12 EPS estimates and 4 revenue estimates were included in consensus for the quarter*.
  • FY 2025 guidance reaffirmation, lowered capital rider revenue guidance ($200–$210MM vs prior $260–$270MM), and front-loaded O&M may prompt minor estimate recalibrations to quarterly cadence even as full-year range is maintained .
    Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term: Modest miss driven by front-loaded O&M and higher non-fuel costs; guidance reaffirmation and constructive regulatory trajectory mitigate downside risk .
  • Regulatory catalysts: CO WMP and TX SRP decisions expected by Q3 2025; MN IRP implementation and SPS NM portfolio selection in Q2 are incremental positives .
  • Growth optionality: Data center load contracting targeted by fall across multiple states provides upside to sales and capital deployment; transmission awards in MISO/SPP support rate base growth .
  • Tariff risk manageable: 2–3% capex exposure with active mitigation via vendor diversification and supply chain actions; AD/CVD impacts not expected on current solar supply .
  • Wildfire overhang: Smokehouse Creek accrual increased to $290MM (below ~$500MM insurance); Marshall trial (liability-first) is a 2H25 event—monitor legal developments .
  • Financial posture: Liquidity of ~$3.54B (credit + cash) at Apr 21, 2025; long-term debt issuances planned across utilities and holding company, supporting the capex plan .
  • Dividend: Board declared $0.57 quarterly dividend; long-term dividend growth objective 4–6% with payout ratio 50–60% .