10-Q: Eversource Energy Reports First Quarter 2024 Results, Reaffirms Full-Year Guidance

Sentiment:

Quarterly Report 3 May 2024 2:09 PM

Eversource Energy announced its first quarter 2024 financial results, reporting earnings of $1.49 per share and reaffirming its full-year earnings guidance.

Better than expectedThe company's earnings per share increased year-over-year.The company's operating cash flow improved significantly compared to the same period last year.

Summary

Eversource Energy reported a net income attributable to common shareholders of $521.8 million, or $1.49 per share, for the first quarter of 2024.
This compares to a net income of $491.2 million, or $1.41 per share, for the same period in 2023.
The company reaffirmed its 2024 non-GAAP earnings guidance range of $4.50 to $4.67 per share, excluding impacts from the expected sale of offshore wind assets.
Eversource also reaffirmed its long-term EPS growth rate through 2028 within a 5 to 7 percent range.
Operating revenues for the quarter were $3.33 billion, down from $3.80 billion in the first quarter of 2023.
The company's cash flow from operating activities was $291.3 million, a significant increase from $69.2 million in the same quarter last year.
Capital expenditures for the quarter totaled $1.15 billion, up from $977.1 million in the first quarter of 2023.

Sentiment

Score: 7

Explanation: The document presents a mixed picture with positive earnings and cash flow improvements, but also some concerns about revenue decline and increased capital expenditures. The strategic move to sell offshore wind assets is a positive development, but the execution of these sales is subject to risks. Overall, the sentiment is cautiously optimistic.

Positives

Eversource's earnings per share increased year-over-year.
The company's operating cash flow improved significantly compared to the same period last year.
Eversource reaffirmed its full-year earnings guidance and long-term growth projections.
The company is progressing with the sale of its offshore wind assets, which is expected to generate significant cash proceeds.
The company has completed the installation of all twelve turbines at the South Fork Wind project.

Negatives

Operating revenues decreased compared to the first quarter of 2023.
Capital expenditures increased compared to the same period last year.
The company is still navigating regulatory challenges related to its Advanced Metering Infrastructure plan in Connecticut.
The company is still subject to ongoing FERC ROE complaints.

Risks

The company faces risks related to the completion of the offshore wind asset sales, including regulatory approvals and potential cost overruns.
There are ongoing risks related to the regulatory environment, including the potential impact of FERC ROE complaints and the implementation of performance-based regulation.
The company is subject to risks related to weather patterns, economic conditions, and cyber security.
There are risks associated with the company's ability to complete major strategic development projects and opportunities.
The company faces risks related to the implementation of new drinking water standards for PFAS compounds.

Future Outlook

Eversource reaffirmed its 2024 non-GAAP earnings guidance range of $4.50 to $4.67 per share and its long-term EPS growth rate through 2028 within a 5 to 7 percent range. The company expects to complete the sale of its offshore wind assets later this year.

Industry Context

The announcement reflects the ongoing trends in the utility sector, including investments in infrastructure, the transition to renewable energy, and the challenges of navigating regulatory environments. The sale of offshore wind assets is part of a broader trend of utilities focusing on core operations and managing capital allocation.

Comparison to Industry Standards

Eversource's performance in the first quarter of 2024 is mixed when compared to industry peers.
While the company's earnings per share increased, the decrease in operating revenues is a concern.
The increase in operating cash flow is a positive sign, but the increase in capital expenditures may put pressure on future earnings.
The company's progress in selling its offshore wind assets is a positive development, but the timing and terms of these sales are subject to regulatory approvals and market conditions.
Compared to other large utilities, Eversource's capital expenditure levels are high, reflecting its focus on infrastructure upgrades and renewable energy projects.
The company's reaffirmed earnings guidance and long-term growth projections are in line with industry expectations for regulated utilities.

Legal Proceedings

The Yankee Companies have filed complaints against the DOE in the Court of Federal Claims seeking monetary damages resulting from the DOE's failure to accept delivery of, and provide for a permanent facility to store, spent nuclear fuel.
Four separate complaints were filed at the FERC by combinations of New England state attorneys general, state regulatory commissions, consumer advocates, consumer groups, municipal parties and other parties challenging the NETOs' base ROE.

Related Party Transactions

A portion of the proceeds from the liquidation of a renewable energy investment fund was used to make a charitable contribution to the Eversource Energy Foundation (a related party).

Stakeholder Impact

Shareholders will be impacted by the company's earnings, dividend payments, and strategic decisions.
Customers will be impacted by changes in rates and the reliability of service.
Employees will be impacted by the company's financial performance and strategic direction.
Suppliers and creditors will be impacted by the company's financial health and ability to meet its obligations.

Next Steps

Eversource will continue to work towards completing the sale of its offshore wind assets.
The company will continue to invest in infrastructure and renewable energy projects.
Eversource will continue to navigate regulatory challenges and seek approvals for its various projects.
The company will continue to monitor and evaluate its equity method investments.

Key Dates

Date	Description
2011-10-01	Date of the first FERC ROE complaint.
2012-12-27	Date of the second FERC ROE complaint.
2014-07-31	Date of the third FERC ROE complaint.
2014-10-16	FERC issued Opinion No. 531-A, setting the base ROE at 10.57 percent and the incentive cap at 11.74 percent for the first complaint period.
2016-04-29	Date of the fourth FERC ROE complaint.
2018-05-31	PSNH issued securitized Rate Reduction Bonds.
2018-10-16	FERC issued an order on all four complaints describing how it intends to address the issues that were remanded by the Court.
2019-11-21	FERC issued Opinion No. 569 affecting the two pending transmission ROE complaints against the Midcontinent ISO (MISO) transmission owners.
2019-12-23	The NETOs filed supplementary materials in the NETOs' four pending cases to respond to this new methodology because of the uncertainty of the applicability to the NETOs' cases.
2021-03-25	Each of the Yankee Companies filed a fifth set of lawsuits against the DOE in the Court of Federal Claims.
2022-05-11	Eversource entered into an equity distribution agreement.
2022-06-08	The Yankee Companies submitted a supplemental filing to include costs of $33.1 million on June 8, 2022.
2023-01-01	CL&P reduced the average NBFMCC rate to a credit of $0.01524 per kWh.
2023-03-21	Eversource's equity method investment in a renewable energy investment fund was liquidated.
2023-07-01	The average NBFMCC rate changed to $0.00000 per kWh.
2023-09-01	Eversource made a contribution of $528 million to invest in a tax equity interest for South Fork Wind.
2023-09-07	Eversource completed the sale of its 50 percent interest in an uncommitted lease area to rsted.
2023-09-30	Eversource made a contribution of $528 million to invest in a tax equity interest for South Fork Wind.
2023-11-01	NSTAR Gas base distribution rate increase became effective.
2023-12-22	CL&P initiated a docket seeking a prudency review of approximately $634 million of catastrophic storm costs.
2023-12-26	The DPU approved a $104.9 million increase to NSTAR Electric's base distribution rates effective January 1, 2024.
2024-01-01	NSTAR Electric base distribution rate increase became effective.
2024-01-24	rsted signed an agreement with Eversource to acquire Eversources 50 percent share of Sunrise Wind.
2024-01-25	Sunrise Wind submitted a proposal in the New York fourth offshore wind solicitation.
2024-02-08	The NHPUC approved PSNHs request for authorization to issue up to $300 million in long-term debt.
2024-02-12	Eversource announced that it executed an agreement to sell its existing 50 percent interests in the South Fork Wind and Revolution Wind projects to Global Infrastructure Partners (GIP).
2024-02-29	Sunrise Wind was selected by NYSERDA for contract negotiation.
2024-03-13	The court issued an order establishing a schedule to resolve pending discovery issues in the DOE Phase V trial.
2024-03-25	The State of Connecticut Superior Court issued a decision on the Aquarion Water Company of Connecticut rate case appeal.
2024-03-26	The joint venture made its final investment decision to proceed with the Sunrise Wind project.
2024-04-18	Eversource and rsted executed the equity and asset purchase agreement to sell Eversources 50 percent interest in Sunrise Wind to rsted.
2024-05-01	The DPU approved NSTAR Electrics request for authorization to issue up to $2.4 billion in long-term debt.

Keywords

Eversource Energy, Financial Results, Earnings, Offshore Wind, Capital Expenditures, Regulatory, Transmission, Distribution, Renewable Energy, Rate Case

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