Why did Alliant Energy's Q2 2024 earnings decline so sharply?

GAAP EPS fell to $0.34 from $0.64. The largest factor was a $0.17 per share variance from the Lansing Generating Station asset valuation charge of $60 million pre-tax. The steam asset retirement obligation charge of $0.06 per share, the timing of income taxes, higher financing and depreciation expenses, and temperature impacts also reduced earnings. Revenue requirements from WPL's capital investments partly offset these items.

Is Alliant Energy still expecting its full-year 2024 earnings guidance to be met?

Yes. The company reaffirmed its 2024 consolidated EPS guidance of $2.99 to $3.13. The guidance assumes, among other things, that IPL and WPL earn their authorized rates of return, temperatures are normal, and regulatory outcomes are constructive and timely. It excludes the Lansing and steam asset charges.

What is the Lansing charge and what happens next?

IPL retired the Lansing Generating Station in May 2023. Its partial rate review settlement, filed with the Iowa Utilities Commission in June 2024, returns the remaining net book value of Lansing but does not include a return on that value. As a result, a $60 million pre-tax non-cash charge was recorded in Q2 2024. A decision from the IUC on the settlement is currently expected in the third quarter of 2024.

Are the Lansing and steam charges expected to recur?

The filing describes them as non-GAAP adjustments for items not normally associated with ongoing operations, and it excludes them from non-GAAP EPS and from the 2024 guidance. The filing does not state that they will recur. IPL expects to end its steam business after two high-pressure steam customers under contract through 2025.

What are management's longer-term growth drivers?

Management cited regulatory progress, including the Iowa rate review settlement that it expects to promote load growth while ensuring base rate stability, and strong economic growth with data centers. It stated that it believes it is positioned to achieve its long-term growth objectives.

LNT 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed August 2, 2024. Cited figures are marked; the original filing is the authoritative source.

Alliant Energy Corporation (NASDAQ: LNT) reported second-quarter 2024 results in a press release furnished as Exhibit 99.1 to this Form 8-K, dated August 1, 2024.

GAAP earnings per share for the three months ended June 30, 2024 were $0.34^a, compared with $0.64 in the same period of 2023. Non-GAAP EPS was $0.57, compared with $0.64. The filing attributes the decline mainly to a $60 million pre-tax non-cash asset valuation charge for IPL's Lansing Generating Station, tied to the proposed Iowa rate review settlement, and a $20 million pre-tax asset retirement obligation charge for IPL's steam assets, tied to the revised Coal Combustion Residuals Rule.

Timing of income taxes, higher financing and depreciation expenses, and estimated temperature impacts also weighed on results, partly offset by $0.12^b per share of higher revenue requirements from capital investments at WPL. For the six months ended June 30, 2024, GAAP EPS was $0.95 versus $1.28, and non-GAAP EPS was $1.18 versus $1.28. Second-quarter revenues were $894 million versus $912 million, and net income attributable to common shareowners was $87 million versus $160 million.

Management stated that, excluding the timing of income taxes and temperature impacts, first-half 2024 ongoing results were in line with its expectations. Alliant reaffirmed its 2024 consolidated EPS guidance of $2.99 to $3.13^c. The guidance excludes the Lansing and steam asset charges, which the company quantified at $0.17 and $0.06 per share, respectively.

Management pointed to the Iowa rate review settlement, with an Iowa Utilities Commission decision currently expected in the third quarter of 2024, and to data center opportunities as drivers of long-term growth. The company also reported that year-to-date temperature impacts reduced 2024 EPS by $0.10^d per share relative to normal temperatures.

02—Key points

Key Highlights

Q2 2024 GAAP EPS was $0.34 versus $0.64 a year earlier; non-GAAP EPS was $0.57 versus $0.64.
A $60 million pre-tax non-cash charge for IPL's Lansing Generating Station (about $0.17 per share after tax) followed the proposed rate review settlement, which returns but does not earn a return on remaining Lansing net book value.
A $20 million pre-tax asset retirement obligation charge for IPL's steam business (about $0.06 per share after tax) resulted from the revised Coal Combustion Residuals Rule.
2024 consolidated EPS guidance of $2.99 to $3.13 was reaffirmed, excluding the Lansing and steam asset charges.
WPL added $0.12 per share in Q2 2024 from higher revenue requirements on rate base growth, including solar and battery storage investments, under a December 2023 Wisconsin rate order.
Second-quarter revenues were $894 million versus $912 million, and quarterly net income attributable to common shareowners was $87 million versus $160 million.
Year-to-date temperatures reduced 2024 EPS by $0.10 per share relative to normal, and the timing of income taxes is expected to reverse by year-end.

03—Questions

Frequently Asked Questions

Why did Alliant Energy's Q2 2024 earnings decline so sharply?
GAAP EPS fell to $0.34 from $0.64. The largest factor was a $0.17 per share variance from the Lansing Generating Station asset valuation charge of $60 million pre-tax. The steam asset retirement obligation charge of $0.06 per share, the timing of income taxes, higher financing and depreciation expenses, and temperature impacts also reduced earnings. Revenue requirements from WPL's capital investments partly offset these items.
Is Alliant Energy still expecting its full-year 2024 earnings guidance to be met?
Yes. The company reaffirmed its 2024 consolidated EPS guidance of $2.99 to $3.13. The guidance assumes, among other things, that IPL and WPL earn their authorized rates of return, temperatures are normal, and regulatory outcomes are constructive and timely. It excludes the Lansing and steam asset charges.
What is the Lansing charge and what happens next?
IPL retired the Lansing Generating Station in May 2023. Its partial rate review settlement, filed with the Iowa Utilities Commission in June 2024, returns the remaining net book value of Lansing but does not include a return on that value. As a result, a $60 million pre-tax non-cash charge was recorded in Q2 2024. A decision from the IUC on the settlement is currently expected in the third quarter of 2024.
Are the Lansing and steam charges expected to recur?
The filing describes them as non-GAAP adjustments for items not normally associated with ongoing operations, and it excludes them from non-GAAP EPS and from the 2024 guidance. The filing does not state that they will recur. IPL expects to end its steam business after two high-pressure steam customers under contract through 2025.
What are management's longer-term growth drivers?
Management cited regulatory progress, including the Iowa rate review settlement that it expects to promote load growth while ensuring base rate stability, and strong economic growth with data centers. It stated that it believes it is positioned to achieve its long-term growth objectives.

04—Continue

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