NWE - NorthWestern Reports First Quarter 2024 Financial Results | Benzinga
BUTTE, Mont. and SIOUX FALLS, S.D., April 25, 2024 (GLOBE NEWSWIRE) -- NorthWestern Energy Group, Inc. d/b/a NorthWestern Energy (NASDAQ:NWE) reported financial results for the three months ended March 31, 2024. Net income for the period was $65.1 million, or $1.06 per diluted share, as compared with net income of $62.5 million, or $1.05 per diluted share, for the same period in 2023.
"Solid regulatory execution provided for quarter-over-earnings growth. New rates in Montana and South Dakota helped offset mild weather and a few one-time headwinds in the first quarter," said Brian Bird, President and CEO. "We are affirming 2024 earnings guidance and remain on track to complete our $500 million capital plan, including the in-service of our 175 megawatt Yellowstone County Generating Station in Montana. Additionally, we expect to release our updated Wildfire Mitigation Plan soon which includes our new Public Safety Power Shutoff process. The plan recognizes and addresses the unique needs of our customers, communities and first responders."
FIRST QUARTER 2024 COMPARED TO FIRST QUARTER 2023
The increase in net income was primarily due to new base rates resulting from the Montana and South Dakota rate reviews, higher transmission revenues, and higher Montana property tax tracker collection, partly offset by lower electric and natural gas retail volumes, higher non-recoverable Montana electric supply costs, higher depreciation and depletion expense, higher operating, maintenance, and administrative expenses, and higher interest expense. Diluted earnings per share also increased as a result of higher net income but was partially offset by increased average shares outstanding due to equity issuances during 2023.
Adjusted non-GAAP diluted earnings per share for the quarter ended March 31, 2024 was $1.09 as compared to $1.05 for the same period in 2023. See "Adjusted Non-GAAP Earnings" and "Non-GAAP Financial Measures" sections below for more information on these measures.
COMPANY UPDATES
Affirming 2024 Earnings Guidance, Capital Plan and Long-Term EPS Growth
We are affirming 2024 diluted earnings guidance of $3.42 - $3.62 per diluted share and our $500 million capital plan. This guidance is based upon, but not limited to, the following major assumptions:
- Normal weather in our service territories;
- An effective income tax rate of approximately 12%-14%; and
- Diluted average shares outstanding of approximately 61.3 million.
We are also affirming our long-term (5 year) diluted earnings per share growth guidance of 4% to 6% from a 2022 base year of $3.18 diluted earnings per share on a non-GAAP basis. We expect rate base growth of 4% to 6%. Our current capital investment program is sized to provide for no equity issuances. Future generation capacity additions or other strategic opportunities may require equity financing.
Dividend Declared
NorthWestern Energy Group's Board of Directors declared a quarterly common stock dividend of $0.65 per share payable June 28, 2024 to common shareholders of record as of June 14, 2024. Over the longer-term, we expect to maintain a dividend payout ratio within a targeted 60-70% range.
Additional information regarding this release can be found in the earnings presentation at
https://www.northwesternenergy.com/investors/earnings
CONSOLIDATED STATEMENT OF INCOME
| (in millions) |
| Three Months Ended March 31, |
| Reconciliation of gross margin to utility margin: |
| 2024 |
| 2023 |
| Operating Revenues |
| $ |
| 475.3 |
| $ |
| 454.5 |
| Less: Fuel, purchased supply and direct transmission expense (exclusive of depreciation and depletion shown separately below) |
| 174.7 |
| 165.5 |
| Less: Operating and maintenance |
| 54.2 |
| 55.9 |
| Less: Property and other taxes |
| 47.2 |
| 49.2 |
| Less: Depreciation and depletion |
| 56.7 |
| 53.2 |
| Gross Margin |
| $ |
| 142.5 |
| $ |
| 130.7 |
| Operating and maintenance |
| 54.2 |
| 55.9 |
| Property and other taxes |
| 47.2 |
| 49.2 |
| Depreciation and depletion |
| 56.7 |
| 53.2 |
| Utility Margin(1) |
| $ |
| 300.6 |
| $ |
| 289.0 |
| 1) Non-GAAP financial measure. See "Non-GAAP Financial Measures" below. |
| Three Months Ended March 31, |
| (in millions, except per share amounts) |
| 2024 |
| 2023 |
| Revenues |
| $ |
| 475.3 |
| $ |
| 454.5 |
| Fuel, purchased supply and direct transmission expense(1) |
| 174.7 |
| 165.5 |
| Utility Margin (2) |
| 300.6 |
| 289.0 |
| Operating and maintenance |
| 54.2 |
| 55.9 |
| Administrative and general |
| 40.4 |
| 34.7 |
| Property and other taxes |
| 47.2 |
| 49.2 |
| Depreciation and depletion |
| 56.7 |
| 53.2 |
| Total Operating Expenses (3) |
| 198.5 |
| 193.0 |
| Operating income |
| 102.1 |
| 96.0 |
| Interest expense, net |
| (31.0 |
| ) |
| (28.0 |
| ) |
| Other income, net |
| 4.3 |
| 4.7 |
| Income before income taxes |
| 75.4 |
| 72.7 |
| Income tax expense |
| (10.3 |
| ) |
| (10.2 |
| ) |
| Net Income |
| 65.1 |
| 62.5 |
| Basic Shares Outstanding |
| 61.3 |
| 59.8 |
| Earnings per Share - Basic |
| $ |
| 1.06 |
| $ |
| 1.05 |
| Diluted Shares Outstanding |
| 61.3 |
| 59.8 |
| Earnings per Share - Diluted |
| $ |
| 1.06 |
| $ |
| 1.05 |
| Dividends Declared per Common Share |
| $ |
| 0.65 |
| $ |
| 0.64 |
| (1) Exclusive of depreciation and depletion expense. (2) Utility Margin is a Non-GAAP financial measure. See "Reconciliation of gross margin to utility margin" above and "Non-GAAP Financial Measures" below. (3) Excluding fuel, purchased supply and direct transmission expense. |
RECONCILIATION OF PRIMARY CHANGES DURING THE QUARTER
| Three Months Ended March 31, 2024 vs. 2023 |
| Pre-tax Income |
| Income Tax (Expense) Benefit (3) |
| Net Income |
| Diluted Earnings Per Share |
| (in millions, except EPS) |
| First Quarter, 2023 |
| $ |
| 72.7 |
| $ |
| (10.2 |
| ) |
| $ |
| 62.5 |
| $ |
| 1.05 |
| Variance in revenue and fuel, purchased supply, and direct transmission expense(1) items impacting net income: |
| New base rates |
| 19.8 |
| (5.0 |
| ) |
| 14.8 |
| 0.25 |
| Higher electric transmission revenue |
| 3.5 |
| (0.9 |
| ) |
| 2.6 |
| 0.04 |
| Montana property tax tracker collections |
| 0.9 |
| (0.2 |
| ) |
| 0.7 |
| 0.01 |
| Higher non-recoverable Montana electric supply costs due to higher electric supply costs |
| (3.5 |
| ) |
| 0.9 |
| (2.6 |
| ) |
| (0.04 |
| ) |
| Lower natural gas retail volumes |
| (3.5 |
| ) |
| 0.9 |
| (2.6 |
| ) |
| (0.04 |
| ) |
| Lower electric retail volumes |
| (3.2 |
| ) |
| 0.8 |
| (2.4 |
| ) |
| (0.04 |
| ) |
| Lower revenue from higher production tax credits, offset within income tax benefit |
| (0.5 |
| ) |
| 0.5 |
| — |
| — |
| Other |
| 0.1 |
| 0.0 |
| 0.1 |