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CMS Energy (CMS) Q3 Earnings call transcript Oct 31, 2024

AInvestFriday, Nov 1, 2024 2:10 am ET
2min read

CMS Energy recently released its 2024 third quarter results, providing a detailed look into the company's financial performance and strategic initiatives. The earnings call, led by CEO Garrick Rochow, Executive Vice President and CFO Rejji Hayes, and other executives, highlighted the company's commitment to delivering strong financial results and maintaining its position as an industry leader.

Focus on Renewable Energy and Customer Reliability

One of the key themes that emerged from the earnings call was CMS Energy's focus on renewable energy and customer reliability. The company's efforts to transition from coal to clean energy, as mandated by Michigan's Clean Energy law, were highlighted as a significant differentiator. The law provides the flexibility for the company to either own assets or utilize power purchase agreements, ensuring affordability for customers and flexibility in meeting renewable energy targets. CMS Energy's commitment to renewable energy is further underscored by its 20-year Renewable Energy Plan, which will detail its clean energy investments and plans to achieve the targets set by Michigan's clean energy law.

Customer Reliability and Investment in Electric Grid

Another significant topic of discussion was the company's focus on customer reliability. CMS Energy's 5-year $7 billion electric reliability road map outlines its plan to move to second quartile reliability performance by the end of the decade. This plan includes comprehensive investments in the electric grid, aligning with Midwest peers, and replacing more than 20,000 poles with those designed for extreme weather conditions. The company also aims to underground more distribution wires and invest in grid technology for automation and machine learning, enhancing storm response and long-term resiliency.

Economic Development and Manufacturing Growth

The earnings call also touched upon the economic development pipeline, with over 6 gigawatts of load looking to either move to or expand in CMS Energy's service area. This includes significant manufacturing growth, bolstered by onshoring, unique state attributes, and the inflation reduction and chips and science acts. This growth is expected to bring jobs, supply chains, commercial activity, and housing starts, benefiting the state and CMS Energy's customers.

Financial Performance and Guidance

CMS Energy reported adjusted earnings per share of $2.47 for the first nine months of 2024, up $0.41 from the same period in 2023. The company reaffirmed its financial objectives for 2024, including a guidance range of $3.29 to $3.35 per share, with continued confidence toward the high end. For 2025, CMS Energy initiated full-year guidance at $3.52 to $3.58 per share, reflecting 6% to 8% growth off the midpoint of the 2024 range.

Regulatory and Operational Challenges

The call also addressed regulatory and operational challenges, including the ongoing financial related regulatory outcomes and the need to navigate the last quarter of 2024. The company anticipates filing its next gas rate case in December 2024 and expects constructive outcomes, particularly in the context of the recent electric rate case and the Liberty Storm Audit.

Conclusion

CMS Energy's 2024 third quarter results demonstrate the company's strong financial performance and strategic focus on renewable energy, customer reliability, and economic development. With a clear vision for growth and a commitment to delivering value to its customers and investors, CMS Energy is well-positioned for continued success in the evolving energy landscape. The company's strategic investments in renewable energy, grid reliability, and economic development are expected to drive long-term growth, positioning CMS Energy as a leader in the industry.

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