Black Hills (BKH) Q3 2024 earnings summary

Executive summary

• Achieved strong operational performance, advanced customer-focused growth projects, and maintained high reliability and service quality despite unplanned generation outages and higher expenses.

• Announced partnership to serve Meta's new AI data center in Cheyenne, Wyoming, starting in 2026, supporting long-term earnings growth and continued strong demand from hyperscale and blockchain customers.

• Maintained a solid financial position, meeting debt-to-capitalization targets, completing major financing needs, and supporting a 54-year record of dividend increases.

• Served over 1.3 million customers in eight states, focusing on growth, operational excellence, and community engagement.

• Recent developments include new EPA greenhouse gas regulations, renewable energy initiatives, and major infrastructure projects.

Financial highlights

• Q3 2024 EPS was $0.35, down from $0.67 in Q3 2023, due to higher O&M, unplanned outages, lower off-system sales, and absence of prior year one-time benefits.

• Year-to-date EPS was $2.52, compared to $2.74 in the same period last year, with new rates and customer growth offset by mild weather and higher costs.

• Q3 2024 revenue was $401.6M, down from $407.1M in Q3 2023; nine-month revenue was $1.53B, down from $1.74B year-over-year.

• Net debt-to-capitalization improved to 55% as of September 2024; available liquidity at quarter end was $729 million.

• Board approved a quarterly dividend of $0.65 per share, marking 54 consecutive years of increases.

Outlook and guidance

• Reaffirmed 2024 EPS guidance range of $3.80–$4.00 per share, assuming normal weather, operations, and regulatory outcomes.

• Long-term EPS growth target of 4%–6% annually, supported by a five-year $4.3 billion capital investment plan focused on customer growth, system integrity, and modernization.

• 2025 earnings guidance and updated capital forecast through 2029 to be provided in February.

• Dividend payout target maintained at 55%–65% of EPS.

• Guidance based on equity issuance of $170M–$190M, production tax credits of ~$18M, and no significant unplanned outages.