Xcel Energy notched a healthy increase in second quarter profits as hot weather and cost cutting helped to offset declining electricity sales due to COVID-19 economic woes.
Minneapolis-based Xcel Thursday reported earnings of $287 million, or 54 cents per share, up from $238 million, or 46 cents per share, in 2019’s second quarter.
The company beat Wall Street forecasts of 48 cents per share, with help from a lower effective tax rate during the quarter.
Xcel’s second quarter revenue tallied $2.59 million, down a tad from a year ago, but below analysts’ projections of $2.66 billion.
“Despite lower sales due to COVID-19, Xcel Energy achieved strong second quarter results primarily due to the positive impact of weather and cost management efforts,” said Ben Fowke, chairman and CEO of Xcel Energy, said in a statement. “We are on track with our financial plan and are reaffirming our 2020 earnings guidance of $2.73 to $2.83 per share.”
Like utilities across the country, Xcel has been hurt by falling electricity demand as COVID-19 has socked the economy. Xcel’s electric sales, adjusted for weather, fell 7.1 % in the second quarter compared to the same time a year ago.
Residential sales actually rose 5.4% as people worked at home instead of at the office. However, that increase was more than canceled out by a 11.5% decline in commercial and industrial sales during the second quarter.
Still, hotter than normal weather in Xcel’s eight-state region — and a corresponding increase in air conditioning — helped cushion the decline in Xcel’s actual electricity sales.
Xcel’s largest markets are Minnesota and Colorado, while the company also has operations in New Mexico, Texas, Wisconsin, the Dakotas and Michigan’s Upper Peninsula. Xcel is Minnesota’s largest electric utility and its second-largest gas utility.
Xcel’s stock was up 46 cents to $69.19 in Thursday morning trading.