8-K: Black Hills Corp. Q1 2026 Earnings and Merger Update

Black Hills Corporation reaffirms 2026 adjusted earnings guidance and reports first-quarter results, highlighting progress on its merger with NorthWestern Energy and data center initiatives.

Summary

• Black Hills Corporation reported first-quarter 2026 results, with GAAP net income available for common stock at $131.0 million, or $1.73 per diluted share, compared to $134.3 million, or $1.87 per diluted share, in the first quarter of 2025.
• Adjusted earnings for the first quarter of 2026 were $135.1 million, or $1.79 per diluted share, excluding $0.05 per share in merger-related costs, compared to $134.3 million, or $1.87 per diluted share, in the prior year.
• The company reaffirmed its full-year 2026 adjusted earnings guidance of $4.25 to $4.45 per share, excluding merger-related costs.
• Key operational highlights include a new all-time peak load of 393 MW at Wyoming Electric and an agreement to reserve generation equipment for a 1.8 GW data center project.
• Shareholder approval for the merger with NorthWestern Energy was received, with settlements reached with intervenors in Montana, Nebraska, and South Dakota.
• Wildfire liability protection legislation was enacted in South Dakota, effective July 1, 2026.
• Construction continues on the 99-MW Lange II generation project, expected to be in service in Q4 2026.
• Rate review requests were filed for South Dakota Electric and Kansas Gas utilities.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a neutral to slightly positive filing, with reaffirmation of guidance and progress on strategic initiatives offset by a year-over-year decline in quarterly earnings.

Positives

• Reaffirmed full-year 2026 adjusted earnings guidance of $4.25 to $4.45 per share.
• Achieved a new all-time peak load of 393 MW at Wyoming Electric, a 4% increase over the 2025 peak.
• Executed an agreement to reserve generation equipment for a 1.8 GW data center project.
• Received shareholder approval for the merger with NorthWestern Energy.
• Reached constructive settlement agreements with key intervenors for the merger in Montana, Nebraska, and South Dakota.
• South Dakota enacted wildfire legislation providing utilities with liability protection when following mitigation plans.
• Continued construction of the 99-MW Lange II generation project, on track for Q4 2026 completion.
• Announced a quarterly dividend of $0.703 per share, marking 56 consecutive years of dividend increases.

Negatives

• First-quarter 2026 GAAP EPS of $1.73 decreased from $1.87 in the same period of 2025.
• First-quarter 2026 adjusted EPS of $1.79 decreased from $1.87 in the same period of 2025.
• Financial results were impacted by $0.18 per share from mild winter temperatures and higher financing and depreciation costs.
• Corporate and Other operating loss increased $3.7 million primarily due to merger-related costs.
• Revenue decreased to $780.7 million in Q1 2026 from $805.2 million in Q1 2025.
• Operations and maintenance expenses were $148.0 million in Q1 2026, down from $153.7 million in Q1 2025.
• Depreciation and amortization expenses increased to $74.8 million in Q1 2026 from $69.2 million in Q1 2025.
• Interest expense, net, increased slightly to $51.9 million in Q1 2026 from $51.3 million in Q1 2025.

Risks

• The accuracy of assumptions underlying earnings guidance and long-term growth targets.
• Ability to obtain adequate cost recovery through regulatory proceedings and favorable rulings.
• Timeliness and cost-effectiveness of completing the capital program.
• Successful execution of financing plans.
• Effects of changing interest rates and inflation.
• Impact of future governmental regulation and volatile energy prices.
• Potential supply chain disruptions affecting material availability and cost.
• Risks associated with the merger with NorthWestern Energy, including regulatory approvals and realization of anticipated benefits.

Future Outlook

The company reaffirms its 2026 adjusted EPS guidance in the range of $4.25 to $4.45 per share, excluding merger-related costs. Management is confident in delivering earnings in the upper half of their 4% to 6% long-term EPS growth target. The merger with NorthWestern Energy is expected to close in the second half of 2026.

Management Comments

• "I'm proud of the strong operational performance by our team and progress on our strategic initiatives in 2026 to date, providing us confidence in reaffirming our full-year earnings guidance," said Linn Evans, president and CEO of Black Hills Corp.
• "We maintained our solid financial position and executed on our capital plan for our customers, including ongoing construction of our 99-MW Lange II generation project in Rapid City that is expected to begin serving customers in the fourth quarter."
• "Our customer-focused strategy has positioned us to consistently and innovatively deliver safe, reliable, and affordable energy while supporting the needs of our customers and communities for growth."
• "We are confident in our ability to deliver earnings in the upper half of our 4% to 6% long-term EPS growth target, and we look forward to an even stronger energy future for all our stakeholders as a larger, premier Midwest utility following our merger with NorthWestern Energy."

Industry Context

StockSavvy.ai notes that Black Hills Corporation's Q1 2026 results and forward-looking statements reflect the ongoing trends in the utility sector, including investments in new generation, data center growth, and regulatory rate reviews. The company's reaffirmation of guidance and progress on the NorthWestern Energy merger indicate a strategic focus on growth and operational efficiency within a consolidating industry.

Comparison to Industry Standards

• The company's 56 consecutive years of dividend increases is the second-longest track record in the electric and natural gas industry, significantly outperforming the average for utility companies.
• The 4% increase in peak load at Wyoming Electric aligns with broader industry trends of increasing demand driven by industrial growth, particularly data centers.
• The company's adjusted EPS of $1.79 for Q1 2026, while lower than the prior year, is within the context of a challenging weather quarter and ongoing merger-related costs, which are common factors affecting utility earnings.
• The planned 99-MW Lange II generation project is a typical investment for utilities to meet demand and replace retiring assets, consistent with industry practices for maintaining reliability and meeting reserve margin requirements.

Stakeholder Impact

• Shareholders: Reaffirmation of earnings guidance and continued dividend payments are positive. Merger progress may lead to future value creation.
• Customers: Investments in generation projects and rate reviews aim to ensure safe, reliable, and affordable energy. Data center growth may impact regional energy demand and infrastructure.
• Employees: Continued operational performance and strategic initiatives suggest stability. Merger integration may lead to organizational changes.
• Creditors: The company's financial position and capital plan execution are key for debt holders. Merger may impact capital structure.
• Suppliers: Ongoing capital projects and operational needs will continue to drive demand for goods and services.

Next Steps

• Seek approval for rate reviews filed for South Dakota Electric and Kansas Gas utilities.
• Complete construction and bring the 99-MW Lange II generation project into service in Q4 2026.
• Continue progress towards definitive agreements for additional large-load data center projects.
• Expect a decision on the joint application with the Federal Energy Regulatory Commission for the merger by mid-2026.
• File South Dakota Electric's wildfire mitigation plan in the second half of 2026.
• Seek new rates for South Dakota Electric in Q1 2027.
• Seek final rates for Arkansas Gas in the second half of 2026.
• Complete the merger with NorthWestern Energy in the second half of 2026.

Key Dates

Recommendation

The company reaffirms its full-year guidance, demonstrating operational resilience despite a year-over-year decline in quarterly EPS. Progress on the NorthWestern Energy merger and significant data center project developments are positive long-term catalysts. However, the slight decrease in Q1 earnings and ongoing merger-related costs warrant a cautious 'hold' until further clarity on merger closing and integration benefits.

Keywords

Black Hills Corporation, 8-K, Q1 2026 Earnings, NorthWestern Energy Merger, Adjusted EPS, Utility, Data Center, Regulatory Filings