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CenterPoint Energy 8-K Report, Financial Results (Jul 30, 2024)

Reports
Earnings & Results·Regulation FD·Exhibits & Filings
Filing Date
Filed July 30, 2024
Period End
July 30, 2024
Security
CNP
In the record · 2016–202610-K1110-Q348-K241

CNP filed 11 annual reports (10-K), 34 quarterly reports (10-Q) and 241 current reports (8-K) between 2016 and 2026.

  1. Deal closed8-K · Feb ’19Feb ’19
  2. Leadership change8-K · Sep ’20Sep ’20
  3. Leadership change8-K · Jan ’23Jan ’23
  4. Material agreement8-K · Oct ’26Oct ’26

01—Abstract

Summary

Summary of the 8-K filed July 30, 2024. Cited figures are marked; the original filing is the authoritative source.

CenterPoint Energy (CNP) reported second quarter 2024 results on July 30, 2024, with GAAP income available to common shareholders of $228 milliona and non-GAAP income of $234 million, both equating to $0.36 per diluted share.

The company reaffirmed its 2024 non-GAAP EPS guidance and its 8%b 2024 non-GAAP EPS growth target, along with a target of mid-to-high end of 6-8% annual growth for 2025 through 2030. The quarter's results were overshadowed by Hurricane Beryl and the May 2024 storms, which restored over 2 million customers within the first seven days. Management outlined an emergency response improvement plan submitted to the Texas PUC, including a new outage tracker by August 1, expanded vegetation management, and hardening of distribution lines.

For investors, the key issues are financing and regulatory recovery of an estimated $1.6c-$1.8 billion in combined May and July 2024 storm costs. Management plans to use interim mechanisms, rate cases, and securitization (anticipated 3Q or 4Q 2025), and it assumes deferral of cost of capital until securitization. Credit metrics are a focus: Moody's-based FFO/Debt was 13.3% at Q2 2024 on an adjusted basis, below the company's 14-15% long-term target, and the company said it will incorporate higher equity-content instruments into its 2024 refinancing.

Pending items include the sale of Louisiana and Mississippi gas LDCs for a gross price of about $1.2 billiond, targeted to close by Q1 2025. The 10-year capital plan stands at $44.5 billion through 2030, with a targeted 10% rate base growth.

Management stated the current year capital plan remains on track at about $3.7 billion, and it reaffirmed its ZENS-related and merger-related non-GAAP adjustments. Investors should weigh strong guidance reaffirmation against storm-related financing needs, credit metric pressure, and regulatory outcomes in Texas.

02—Key points

Key Highlights

  1. Q2 2024 GAAP and non-GAAP diluted EPS of $0.36, up from $0.17 GAAP ($0.28 non-GAAP) in Q2 2023; non-GAAP income of $234 million versus $178 million a year earlier
  2. Reaffirmed 2024 non-GAAP EPS growth target of 8% and mid-to-high end of 6-8% annual growth for 2025-2030
  3. Estimated combined May and July 2024 storm costs of ~$1.6-$1.8 billion, with recovery planned via interim mechanisms, rate cases, and securitization (anticipated 3Q or 4Q 2025)
  4. Moody's-adjusted FFO/Debt of 13.3% (TTM Q2 2024) remains below the 14-15% long-term target, with management pledging to maintain current credit ratings
  5. 10-year capital plan of $44.5 billion through 2030, with targeted 10% rate base growth; over 80% expected to be recoverable through interim mechanisms
  6. Pending sale of Louisiana and Mississippi natural gas LDCs at ~$1.2 billion gross (~$1.0 billion net), targeted to close by Q1 2025
  7. Hurricane Beryl response plan includes a new outage tracker by August 1, nearly doubled vegetation crews, and hardening of ~350 distribution line miles

03—Questions

Frequently Asked Questions

  1. Did CenterPoint change its earnings guidance in Q2 2024?

    No. CenterPoint reaffirmed its 2024 non-GAAP EPS guidance and its 8% 2024 non-GAAP EPS growth target, and it kept the 6-8% annual growth outlook for 2025-2030 at the mid-to-high end.

  2. How will CenterPoint pay for the storm restoration costs from May and July 2024?

    The company plans to finance the estimated $1.6-$1.8 billion of storm costs through interim recovery mechanisms, rate case outcomes, and securitization, which it expects around 3Q or 4Q 2025. It also said it will incorporate higher equity-content instruments into its 2024 refinancing and continue to add equity or equity-like proceeds of about $250 million annually through 2030.

  3. Why are credit metrics a concern for investors?

    CenterPoint's Moody's-adjusted FFO/Debt was 13.3% on a trailing twelve-month basis at Q2 2024, below its long-term target of 14-15% through 2030. Storm costs and capital spending increase financing needs, so the company's ability to restore these metrics is a key risk to monitor.

  4. What did CenterPoint do to address the Hurricane Beryl response?

    CenterPoint submitted an emergency preparedness and response plan to the Texas PUC. Immediate actions include nearly doubling vegetation management crews, launching a new cloud-based outage tracker by August 1, increasing mobile generation units from 4 to 13, and hardening roughly 350 distribution line miles to the latest wind standard.

  5. What is the status of the Louisiana and Mississippi gas LDC sale?

    The sale, announced in February 2024, has a gross purchase price of about $1.2 billion and a net price of about $1.0 billion after taxes and costs. Applications were filed with the Louisiana and Mississippi regulators in April 2024, and the transaction is targeted to close by the end of Q1 2025.

04—Continue

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