10-QPeriod: Q3 FY2019

CMS ENERGY CORP Quarterly Report for Q3 Ended Sep 30, 2019

Filed October 24, 2019For Securities:CMSCMS-PCCMSACMSCCMSD

Summary

CMS Energy Corporation (CMS) reported its third-quarter and nine-month results for 2019. For the nine months ended September 30, 2019, net income available to common stockholders decreased to $513 million from $549 million in the same period of 2018. Diluted Earnings Per Share (EPS) also declined to $1.81 from $1.94 year-over-year. The decrease was primarily attributed to lower electric sales due to unfavorable weather, lower earnings from the enterprises segment, and increased depreciation and amortization, partially offset by benefits from electric and gas rate increases and colder weather impacting gas sales. The company continues to emphasize its "Triple Bottom Line" approach, focusing on people, planet, and profit, with significant investments planned in infrastructure upgrades and renewable energy. Notably, Consumers Energy's Clean Energy Plan aims to reduce carbon emissions significantly by 2040. Regulatory matters, particularly rate cases and environmental compliance, remain key aspects of the business, with ongoing proceedings before the Michigan Public Service Commission (MPSC).

Financial Highlights

45 data points
Beta

Revenue

$1.55B

Net Income

$207.00M

13.4% Net Margin

EPS (Diluted)

$0.73

Total Assets

$26.01B

Cash & Equivalents

$403.00M

Free Cash Flow

-$387.00M

Financial Statements
Beta
Revenue$1.55B
Operating Expenses$1.20B
Operating Income$351.00M
Interest Expense$133.00M
Net Income$207.00M
EPS (Basic)$0.73
EPS (Diluted)$0.73
Shares Outstanding (Diluted)284.60M

Key Highlights

  • 1Net income available to common stockholders for the nine months ended September 30, 2019, was $513 million, a decrease from $549 million in the prior year period.
  • 2Diluted EPS for the nine months ended September 30, 2019, was $1.81, down from $1.94 in the same period of 2018.
  • 3Lower electric sales due to unfavorable weather and increased depreciation were key factors impacting profitability.
  • 4Consumers Energy's 'Clean Energy Plan,' approved by the MPSC, aims for substantial carbon emission reductions by 2040.
  • 5Capital expenditures for the nine months ended September 30, 2019, were $1.57 billion, consistent with prior year levels, primarily for infrastructure upgrades.
  • 6The company reported strong liquidity with $433 million in consolidated cash and cash equivalents as of September 30, 2019.
  • 7Regulatory decisions in the 2018 electric and gas rate cases resulted in a net increase in annual rates for electric customers and an increase for gas customers, respectively.

Frequently Asked Questions

The decrease in net income was primarily driven by lower electric sales due to unfavorable weather, reduced earnings from the enterprises segment, and higher depreciation and amortization expenses. These factors were partially offset by benefits from electric and gas rate increases and increased gas sales due to colder weather.

CMS Energy, through Consumers Energy's 'Clean Energy Plan,' is committed to increasing renewable energy generation and has a goal to reduce carbon emissions by over 90% by 2040, eliminating coal-fueled generation by that time. They are investing in new renewable generation projects and energy efficiency programs.

The 2018 electric rate case resulted in an $89 million net increase in annual rates for customers after accounting for tax credits. The 2018 gas rate case approved by the MPSC resulted in a $144 million annual rate increase. These decisions allow for the recovery of new investments and help support the company's financial performance.

As of September 30, 2019, CMS Energy had $433 million in consolidated cash and cash equivalents, indicating solid liquidity. The company also has access to significant revolving credit facilities. The capital expenditure plan remains substantial, focusing on infrastructure and environmental initiatives.