Hawaiian Electric Industries Q2 Earnings Call: Progress Amid Challenges

Hawaiian Electric Industries (HEI) reported Q2 earnings with cautious optimism, highlighting legislative and financial progress. The company secured liability caps for wildfires, authorized securitization for $500 million in infrastructure investments, and received credit rating upgrades from Moody's, S&P, and Fitch. Despite wildfire-related expenses and decreased utility core net income, HEI plans to raise funds for a second settlement payment and update its CapEx and rate base growth guidance.

Hawaiian Electric Industries (HEI) reported its second-quarter 2025 earnings with a mix of cautious optimism and legislative progress. The company's net income for the quarter was $26 million, a significant turnaround from a $1.3 billion loss in 2024. This improvement was driven by several key factors, including legislative support for wildfire safety improvements, asset sales, and revenue increases.

The company's core income from continuing operations rose to $35 million, up from $28 million in 2024, reflecting a robust performance in its core operations. Additionally, Hawaiian Electric reported $7 million in higher revenues, primarily driven by the annual revenue adjustment mechanism and demand response revenues.

Legislative support played a crucial role in Hawaiian Electric's financial performance. Governor Josh Green signed legislation that appropriates funds for the state's contribution to the Maui wildfire tort litigation settlement, directs the Public Utilities Commission to establish a liability cap for economic damages from future wildfires, authorizes securitization for infrastructure resilience investments, and supports reliable, affordable clean energy procurement.

Despite these positive developments, Hawaiian Electric faced challenges, including wildfire-related expenses and a decrease in utility core net income. The company expects to divest its remaining stake in American Savings Bank next year and will focus on affordable clean energy procurement.

HEI's stock recently traded at 11 times the next 12-month earnings, compared to a P/E of 10 three months ago, indicating a positive market sentiment. Analysts maintain a "hold" rating on the shares, with a breakdown of recommendations of 1 "strong buy" or "buy," 3 "hold," and no "sell" or "strong sell." The median 12-month price target for Hawaiian Electric Industries Inc. is $11.75, about 6% above its August 6 closing price of $11.05.

In conclusion, Hawaiian Electric Industries reported Q2 earnings with a mix of cautious optimism and legislative progress. The company's net income for the quarter was $26 million, driven by legislative support for wildfire safety improvements, asset sales, and revenue increases. Despite challenges, Hawaiian Electric remains focused on affordable clean energy procurement and divesting its remaining stake in American Savings Bank.

References:
[1] https://www.tradingview.com/news/reuters.com,2025:newsml_PLX00BF12:0-hawaiian-electric-reports-q2-net-income-of-26-mln/
[2] https://www.morningstar.com/news/business-wire/20250807015694/hei-reports-second-quarter-2025-results