8-K: TXNM Energy Reports 2025 Results, Blackstone Deal Progress

TXNM Energy announced its 2025 financial results, reporting a decrease in GAAP earnings per share but progress on its proposed acquisition by Blackstone Infrastructure.

Summary

• 2025 GAAP diluted EPS was $1.48, a decrease from $2.67 in 2024.
• 2025 Ongoing diluted EPS was $2.33, a decrease from $2.74 in 2024.
• The proposed acquisition by affiliates of Blackstone Infrastructure for $61.25 per share is progressing, with approvals received from the Federal Energy Regulatory Commission (FERC) and the Public Utility Commission of Texas (PUCT) in February 2026.
• The closing of the acquisition is anticipated in the second half of 2026, subject to remaining customary closing conditions.
• Texas New Mexico Power (TNMP) filed a general rate proceeding with the PUCT requesting recovery of $2.8 billion of rate base, a 10.4% return on equity, and a 47.54% equity ratio, with new rates expected to become effective in mid-2026.
• Public Service Company of New Mexico (PNM) filed for approval of two economic development projects at an estimated cost of $165.5 million and a new 345 kV transmission line project at an estimated cost of $247 million.
• PNM initiated its 2026 Integrated Resource Plan (IRP) process, with the filing expected on or before September 1, 2026.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a mixed report. While the company is making progress on its strategic acquisition and significant infrastructure investments, the substantial decline in GAAP and ongoing earnings, coupled with significant one-time charges, indicates operational headwinds and transaction-related costs.

Positives

• The proposed transaction with Blackstone Infrastructure is progressing, with key regulatory approvals received from FERC and PUCT in February 2026.
• TNMP supported a 28% increase in system peak demand in 2025, indicating strong growth in its service area.
• PNM delivered 80% carbon-free energy in 2025, aligning with clean energy transition goals.
• TNMP's second Distribution Cost Recovery Factor (DCRF) filing for 2025 was approved and implemented, providing recovery for $19 million of rate base.
• PNM filed for two economic development projects ($165.5 million) and a new transmission line project ($247 million) aimed at enhancing reliability, integrating renewable energy, and supporting economic development.

Negatives

• GAAP diluted EPS decreased significantly to $1.48 in 2025 from $2.67 in 2024.
• Ongoing diluted EPS also decreased to $2.33 in 2025 from $2.74 in 2024.
• GAAP net earnings attributable to TXNM Energy decreased to $151.4 million in 2025 from $242.2 million in 2024.
• Ongoing net earnings decreased to $238.9 million in 2025 from $247.8 million in 2024.
• 2025 GAAP earnings included $3.4 million of net unrealized losses on investment securities, a shift from $2.7 million in gains in 2024.
• A $58.8 million pension settlement charge related to a previously disposed gas distribution business impacted 2025 GAAP earnings.
• $43.1 million in costs related to the planned transaction impacted 2025 GAAP earnings.
• PNM's earnings were negatively impacted by lower weather-related usage, increased operations and maintenance (O&M), higher depreciation, property tax, and interest expense, and increased demand charges from energy storage agreements.

Risks

• The expected timing and likelihood of completion of the pending transaction with Blackstone Infrastructure, including the timing, receipt, and terms and conditions of any required governmental and regulatory approvals that could reduce anticipated benefits or cause the parties to abandon the transaction.
• The occurrence of any event, change, or other circumstances that could give rise to the termination of the transaction agreement, including in circumstances requiring TXNM Energy to pay a termination fee.
• The risk that the parties may not be able to satisfy the conditions to the proposed transaction in a timely manner or at all.
• The outcome of legal proceedings that may be instituted against TXNM Energy, its directors, and others related to the proposed transaction.
• Risks related to disruption of management time from ongoing business operations due to the proposed transaction.
• The risk that the proposed transaction and its announcement could have an adverse effect on the ability of TXNM Energy to retain and hire key personnel and maintain relationships with its customers and suppliers, and on its operating results and businesses generally.
• The amount of costs, fees, charges, or expenses resulting from the proposed transaction.
• The risk that the price of TXNM Energy's common stock may fluctuate during the pendency of the proposed transaction and may decline significantly if the proposed transaction is not completed.
• Other unpredictable or unknown factors not discussed in this communication could also have material adverse effects on forward-looking statements.

Future Outlook

TXNM Energy does not plan to issue 2026 earnings guidance during the pendency of the proposed transaction with Blackstone Infrastructure. The company anticipates the closing of the acquisition in the second half of 2026, subject to remaining regulatory approvals. New rates for TNMP are expected to become effective in mid-2026, and PNM expects to file its 2026 Integrated Resource Plan by September 1, 2026.

Management Comments

• "PNM and TNMP continue to grow and we remain focused on meeting our customer needs across New Mexico and Texas, with TNMP supporting a 28% increase in system peak demand and PNM delivering 80% carbon free energy in 2025." Don Tarry, President and CEO of TXNM Energy.
• "Our proposed transaction with Blackstone Infrastructure will provide the necessary capital to support this growth and New Mexico's transition to clean energy. We look forward to bringing the benefits of this transaction to our customers and communities." Don Tarry, President and CEO of TXNM Energy.

Industry Context

StockSavvy.ai notes that the utility sector is undergoing significant transformation driven by clean energy mandates and infrastructure investment needs. TXNM Energy's focus on carbon-free energy and substantial capital projects for reliability and renewable integration aligns with broader industry trends. The proposed acquisition by Blackstone Infrastructure highlights the increasing interest of private equity in stable, regulated utility assets, often driven by the need for capital to fund these transitions and the predictable cash flows utilities offer.

Comparison to Industry Standards

• TXNM Energy's 80% carbon-free energy delivery by PNM in 2025 positions it favorably among utilities actively transitioning away from fossil fuels, comparable to leaders like Xcel Energy (which aims for 80% carbon reduction by 2030) or NextEra Energy (which has significant renewable generation capacity.
• The 28% increase in TNMP's system peak demand indicates robust growth in its Texas service territory, potentially outpacing average load growth seen in more mature utility markets, and is indicative of strong economic development in the region, similar to growth rates observed in fast-growing areas served by utilities like Oncor Electric Delivery.
• The requested 10.4% return on equity (ROE) for TNMP's general rate proceeding is within the typical range for regulated utilities, often falling between 9% and 11% depending on jurisdiction and risk profile, comparable to recent approvals for utilities in Texas such as CenterPoint Energy or AEP Texas.

Stakeholder Impact

• Shareholders: Will receive $61.25 per share upon completion of the Blackstone acquisition. Share price may fluctuate during pendency.
• Customers (PNM & TNMP): Expected benefits from new capital investments in infrastructure, enhanced reliability, integration of renewable energy, and economic development projects. Potential rate increases for TNMP customers if rate proceeding is approved.
• Employees: Risk of adverse effect on ability to retain and hire key personnel due to proposed transaction.
• Suppliers: Risk of adverse effect on ability to maintain relationships with suppliers due to proposed transaction.

Next Steps

• Continue pursuing approvals from the Nuclear Regulatory Commission and New Mexico Public Regulation Commission for the Blackstone acquisition.
• Anticipate closing of the Blackstone acquisition in the second half of 2026.
• Await PUCT approval for TNMP's general rate proceeding, with new rates expected mid-2026.
• Await NMPRC approval for PNM's two economic development projects ($165.5 million).
• Await NMPRC approval for PNM's new 345 kV transmission line project ($247 million).
• PNM to continue receiving public input for its 2026 Integrated Resource Plan (IRP).
• PNM expects to file its 2026 IRP with the NMPRC on or before September 1, 2026.

Key Dates

Recommendation

The company's 2025 financial results show a notable decline in GAAP and ongoing earnings, impacted by one-time charges and operational factors. However, the ongoing acquisition by Blackstone Infrastructure at a fixed price of $61.25 per share provides a clear exit strategy for current shareholders, assuming the deal closes. The progress on regulatory approvals for the acquisition reduces uncertainty, but the deal is not yet finalized. Investors should hold pending the completion of the acquisition, as the current share price is likely to be influenced by the offer price rather than underlying operational performance, which shows some headwinds.

Keywords

TXNM Energy, Blackstone Infrastructure, Utility, Earnings, SEC Filing, Merger, Acquisition, Regulatory Approval, New Mexico, Texas, PNM, TNMP, Energy Transition, Rate Case, Transmission Line, Integrated Resource Plan