NorthWestern Energy Group (NWE) Q3 2024 earnings summary

Executive summary

• Q3 2024 GAAP diluted EPS was $0.76 (up from $0.48 in 2023) and non-GAAP EPS was $0.65 (up from $0.49), with net income of $46.8 million, up 59.7% year-over-year, driven by new base rates, higher electric transmission revenues, and a favorable tax benefit.

• Operating revenues for Q3 2024 rose 7.5% year-over-year to $345.2 million.

• Dividend of $0.65 per share declared, payable December 31, 2024.

• Yellowstone County Generating Station (175 MW) began serving customers in October 2024 after delays, with incurred costs of $305.6 million and expected total costs of $310–$320 million.

• Asset purchase agreements to acquire Energy West Montana's natural gas utility for $39 million and Puget Sound Energy’s 25% interest in Colstrip Units 3 & 4, potentially increasing ownership to 55%.

Financial highlights

• Q3 2024 utility margin increased 10.8% to $257.3 million; operating income rose to $67.9 million from $55.6 million; gross margin was $102.8 million, up 23.1%.

• Adjusted Q3 2024 earnings were $0.65 per share, up from $0.49 in Q3 2023, after excluding a $7 million tax benefit from IRS gas repairs guidance.

• Year-to-date 2024 net income rose 29.4% to $143.6 million; diluted EPS up 26.5% to $2.34.

• Q3 2024 operating expenses increased 7.2% year-over-year, mainly from higher depreciation, insurance, and labor costs.

• Interest expense for Q3 2024 rose 16.4% to $33.4 million due to higher borrowings and rates.

Outlook and guidance

• 2024 non-GAAP EPS guidance revised to $3.32–$3.47 due to regulatory delays in Montana; 2025 guidance to be provided after Montana rate review outcome.

• Affirmed 4%–6% annual EPS and rate base growth targets over five years from a 2022 base.

• No equity issuances expected to fund the $2.5 billion five-year capital plan; funding from operations and secured debt.

• FFO to Debt ratio at 15.1% for Q3 2024 trailing twelve months; could fall below downside thresholds in 2024 and 2025 without interim rate relief.

• Montana, South Dakota, and Nebraska rate reviews are underway, with requested annual revenue increases of $156.5 million (electric), $28.6 million (MT gas), $6.0 million (SD gas), and $3.6 million (NE gas).