01—Abstract
Summary
Summary of the 8-K filed February 20, 2025. Cited figures are marked; the original filing is the authoritative source.
CenterPoint Energy (CNP) reported fourth-quarter and full-year 2024 results on February 20, 2025.
GAAP income available to common shareholders was $248 milliona ($0.38 per diluted share) for Q4 2024 and $1,019 million ($1.58 per diluted share) for full-year 2024. Non-GAAP EPS was $0.40 for Q4 2024 (up 25% year over year) and $1.62 for full-year 2024, an 8% increase over the $1.50 reported for 2023. The non-GAAP figures exclude mark-to-market changes on ZENS-related securities and impacts from the Louisiana and Mississippi LDC sale and the earlier Energy Systems Group divestiture.
The company reiterated 2025 non-GAAP EPS guidance of $1.74b-$1.76, which implies about 8% growth at the midpoint, and kept a mid-to-high end 6%-8% annual non-GAAP EPS growth target through 2030. The main growth driver is Houston Electric's load outlook. CenterPoint now forecasts Houston-area electric peak load to rise from about 21 GW in 2024 to about 31 GW by 2031, nearly a 50% increase.
The 10-year capital plan (2021-2030) rose by $500 million to $47.5 billionc, all for incremental Houston Electric resiliency investment. The company also filed a $5.75 billion Systemwide Resiliency Plan and expects roughly $5.5 billion of resiliency capital from 2026 through 2028. Management reported FY2024 FFO/Debt of 13.6% on Moody's methodology, adjusted for one-time items, against a long-term target of 14%-15%, and expects about $1.2 billion of gross proceeds from the Louisiana and Mississippi LDC sale by the end of Q1 2025.
Investors should weigh the earnings growth and load outlook against the balance-sheet pressure. Parent-level maturities, ratings outlooks marked negative at all three agencies, and a planned increase of $250 milliond in equity or equity-like issuance through 2030 all bear on the cost and dilution of funding the plan.
02—Key points
Key Highlights
- FY2024 GAAP EPS of $1.58 and non-GAAP EPS of $1.62, up 8% from $1.50 in 2023; Q4 2024 non-GAAP EPS of $0.40, up 25% year over year
- Houston Electric peak load forecast to grow from ~21 GW (2024) to ~31 GW (2031), nearly 50% growth, driven by logistics, data centers, energy exports, and petrochemicals
- 10-year capital plan (2021-2030) raised to $47.5 billion, including $500 million of incremental Houston Electric resiliency investment
- 2025 non-GAAP EPS guidance of $1.74-$1.76 reaffirmed (about 8% growth at midpoint); long-term non-GAAP EPS and dividend growth target of mid-to-high end of 6%-8% annually through 2030
- FY2024 FFO/Debt of 13.6% (Moody's, adjusted for one-time items) versus a 14%-15% long-term target; all three rating agencies carry a negative outlook
- Louisiana and Mississippi natural gas LDC sale: ~$1.2 billion gross proceeds (~$1.0 billion net), expected to close by end of Q1 2025; equity or equity-like issuance plan raised by $250 million to $2.65 billion through 2030
- Systemwide Resiliency Plan of $5.75 billion filed, with ~$5.5 billion of resiliency capital expected from 2026-2028 and projected 30% resiliency improvement and ~$50 million annual storm-cost savings
03—Questions
Frequently Asked Questions
What drove the year-over-year earnings improvement in Q4 and FY2024?
In Q4 2024, non-GAAP EPS rose $0.08 to $0.40, led by growth and rate recovery (+$0.05 for electric and gas combined), lower O&M (+$0.05), and weather and usage (+$0.02). These were partly offset by higher interest expense (-$0.03). For full-year 2024, non-GAAP EPS of $1.62 reflected growth and rate recovery (+$0.34 combined, with electric growth at $0.25), ongoing cost management and O&M reductions (+$0.10), and weather and usage (+$0.02). Interest expense was a $0.14 headwind.
How credible is the ~50% Houston load growth forecast?
Management attributes the forecast to specific, identifiable customers: data centers, logistics and port electrification, medical center expansion, and petrochemical and LNG/energy export facilities, underpinned by roughly 2% annual customer growth. Investors should note that large industrial and data center projects are lumpy, can be delayed or cancelled, and depend on transmission and power availability. The forecast is also a forward-looking statement subject to the risks listed in the filing.
Is the balance sheet a concern given the capital plan?
Yes, it is a key watch item. FY2024 FFO/Debt was 13.6% on Moody's basis (adjusted for one-time items) and 12.0% on S&P's basis, both below the company's 14%-15% target. Ratings are on negative outlook at Fitch, S&P, and Moody's. The company plans to fund the capital program through about $3 billion of asset recycling and securitization proceeds in 2025 and beyond, $2.65 billion of equity or equity-like issuance through 2030, and higher-equity-content instruments. Parent-level maturities include $900 million of senior notes due 2027 and $1 billion of convertible notes due 2026.
How will the Louisiana and Mississippi LDC sale affect results?
The sale is expected to bring roughly $1.2 billion of gross proceeds, or about $1.0 billion net after taxes and transaction costs, by the end of Q1 2025. Management cites a valuation of about 1.55x 2023 rate base and roughly 32x 2023 earnings, net of about $400 million of operating company debt paydown. Proceeds are earmarked for the capital plan and balance-sheet support. The transaction is excluded from non-GAAP EPS, and its execution and timing are subject to the risks in the filing.
What is the status of Houston Electric's storm-related recovery and resiliency plan?
The Houston Electric rate case (Docket 56211) received a final order that supports rate recovery. The company has filed a $5.75 billion Systemwide Resiliency Plan, with about $5.5 billion of resiliency capital expected from 2026 to 2028, targeting roughly 30% stronger resiliency, about 1.3 billion fewer outage minutes into 2029, and about $50 million per year of lower storm costs. Recovery of May 2024 storm and Hurricane Beryl costs remains uncertain. Management is pursuing securitization and has said it will not seek recovery of about $110 million of storm costs from customers.
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