Idacorp (IDA) Q4 2018 earnings summary

Executive summary

• Eleventh consecutive year of earnings growth; retail customer base expanded 2.3%, while customer satisfaction and grid reliability reached record highs.

• Record energy sales and earnings, Western Energy Imbalance Market participation, and settlements on tax reform and Hells Canyon relicensing marked key 2018 developments.

Financial highlights

• Operating revenue was $1.371B in 2018, up 1.58% YoY; net income attributable to IDACORP was $226.8M, up 6.77%, and diluted EPS was $4.49, up 6.65%.

• Operating income was $296.9M versus $315.5M in 2017; lower income tax expense contributed to higher net income.

• Utility net income rose to $222.3M from $206.3M; customer growth added $10.3M to operating income, while lower retail usage reduced it by $9.4M.

• Wholesale energy revenue increased $28.1M YoY to $52.8M, supported by higher sales volume and average prices; transmission wheeling revenue rose $15.1M to $59.1M.

• Fourth-quarter natural gas hedge gains of $23.3M reduced fuel expense; most realized gains are expected to benefit customers through power cost adjustment mechanisms.

Outlook and guidance

• Initiated FY2019 diluted EPS guidance of $4.30–$4.45.

• Estimated 2019 capital expenditures of $280M–$290M; expected 2019–2023 capital expenditures total nearly $1.5B.

• Estimated 2019 hydro generation of 6.5M–8.5M MWh, compared with 8.7M MWh in 2018.

• No general rate case was anticipated in 2019; management continued to assess the need for a future filing.

• Future annual dividend increases of 5% or more were expected to be recommended, targeting a 50%–60% payout of sustainable earnings.