Pinnacle West Capital (PNW) Q1 2025 earnings summary

Executive summary

• Reported a Q1 2025 net loss attributable to common shareholders of $4.6 million, or $0.04 per share, compared to net income of $16.9 million, or $0.15 per share, in Q1 2024, primarily due to higher O&M, depreciation, and the absence of a one-time benefit from the Bright Canyon Energy sale.

• Customer and economic growth in Arizona remained strong, especially in semiconductor, advanced manufacturing, and data center sectors, with Phoenix leading in manufacturing growth and residential affordability.

• Major investments and expansions by TSMC, NVIDIA, and Mayo Clinic, along with robust business and residential additions, are expected to drive long-term demand and economic diversity.

• Operational focus remains on grid reliability, summer preparedness, wildfire mitigation, and customer experience, with APS ranking in the top 10 nationally for digital utility experience.

• Regulatory preparations are underway for a mid-year rate case filing, aiming to recover investments and minimize regulatory lag through a formula rate proposal.

Financial highlights

• Operating revenues increased to $1.032 billion in Q1 2025 from $951.7 million in Q1 2024, mainly due to new rates and customer growth.

• Reported a loss of $0.04 per share for Q1 2025, compared to earnings of $0.15 per share in Q1 2024, reflecting higher O&M, interest, and depreciation expenses, partially offset by new rates and higher transmission sales.

• Cash provided by operating activities was $402 million, up from $347 million year-over-year.

• Capital expenditures for Q1 2025 were $623 million, up from $518 million in Q1 2024.

• Adjusted gross margin guidance for 2025 is $3.13–$3.19 billion; adjusted O&M guidance is $965–$985 million.

Outlook and guidance

• 2025 consolidated earnings guidance remains $4.40–$4.60 per diluted share on a weather-normalized basis, with a long-term EPS growth target of 5–7% off the 2024 midpoint.

• Customer growth for the quarter was strong at 2.3%, near the high end of annual guidance, with full-year weather-normalized sales growth guidance reaffirmed at 4%–6%.

• Capital plan for 2024–2027 totals $9.66 billion, supporting reliability, clean energy, and growth.

• O&M guidance for 2025 remains unchanged, with anticipated first-quarter increases expected to be offset over the year.

• All other guidance from the previous quarter was reaffirmed.