Release Date: November 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Alliant Energy Corp (LNT, Financial) reported strong financial performance in Q3 2024, with earnings of $1.15 per share, up from $1.05 per share in Q3 2023.
- The company has narrowed its 2024 earnings guidance range and reaffirmed its long-term earnings growth target of 5% to 7%.
- Alliant Energy Corp (LNT) announced plans to bring two prestigious data center companies to its Big Cedar Industrial Center, expected to add 1.1 gigawatts in Phase I by 2028.
- The company is focused on economic development, driving growth in the communities it serves, and creating shared prosperity.
- Alliant Energy Corp (LNT) continues to be a leader in the clean energy transition, with significant investments in wind, solar, and energy storage, making up over 40% of its 2025 to 2028 capital expenditure plan.
Negative Points
- The company faced negative impacts from milder temperatures, which decreased earnings by approximately $0.10 per share through September 2024.
- Higher depreciation and finance expenses partially offset the positive earnings drivers.
- Alliant Energy Corp (LNT) has initiated a voluntary employee separation program, expected to reduce its workforce by approximately 5%.
- The company anticipates the need for roughly $1 billion of new common equity through 2028 to maintain a strong balance sheet.
- There is uncertainty regarding the timing and magnitude of future load growth, which could impact the company's ability to meet its long-term growth targets.
Q & A Highlights
Q: Should you shift into the high case for load growth, how could that affect where you end up in the 5% to 7% long-term EPS growth guidance?
A: Lisa Barton, President and CEO, explained that the long-term growth should be viewed as upside potential. The Phase II growth is anticipated to occur in the later years, extending the 5% to 7% growth opportunities.
Q: How can we think about equity contributions in 2026 and beyond, given the current guidance of roughly 10% funding of overall CapEx?
A: Robert Durian, CFO, stated that they foresee a need for about $1 billion of new common equity through 2028. The capital expenditure plan is more heavily weighted towards the back half of the plan, with equity needs likely to be ratably spread over 2026 to 2028.
Q: Regarding the ICR and tariff structure, how would you interpret the current midpoint or midrange case against your targeted earned return scenarios?
A: Robert Durian noted that higher load growth could push them into earnings sharing mechanisms, likely in the '28 and '29 time periods, as they continue to grow the business and consider future phases beyond the initial phase at the Big Cedar industrial site.
Q: Was the 2024 guidance reduction due to an inability to fully offset weather headwinds, or were there other challenges?
A: Robert Durian confirmed that the reduction was largely related to temperature impacts. They have managed to offset about 75% of the negative temperature impacts through successful efforts in reducing O&M, interest, and tax expenses.
Q: On the CapEx side, does the update include assumptions around other economic development deals, or are you conservatively excluding anything else until contracts are signed?
A: Robert Durian mentioned that future economic development activities, including data centers, would be upside to their plan, increasing both capital expenditure and sales, which contributes to customer affordability.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
