Black Hills Corporation (BKH) Earnings & Analysis

Latest quarter

Black Hills reported Q2 FY2026 revenue of $452.8 million, up from $439.0 million a year earlier. Adjusted earnings per share were $0.54, above the consensus estimate of $0.42. Diluted earnings per share were $0.50, compared with $0.38 a year earlier.

The company’s filing attributed higher Electric Utilities operating income primarily to new rates and rider recovery associated with the completed Ready Wyoming project. It also attributed higher Gas Utilities operating income primarily to new rates and rider recovery following Nebraska and Kansas rate reviews, partly offset by higher operating expenses.

Black Hills reported an operating margin of 21.4%, compared with 18.8% a year earlier. Its free cash flow was −$23.0 million, compared with −$30.3 million. The filing attributed an increase in capital expenditure cash outflows primarily to the Lange II project and milestone payments for long-lead-time generation equipment.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Linden R. Evans said large-load demand was driving growth in Wyoming, where the electric utility’s July peak of 439 megawatts was 16% above the prior year’s peak. He said the company had more than 3 gigawatts of data center opportunities, with 600 megawatts included in its current plan. That planned demand includes Microsoft’s expansion and Meta’s new AI data center, which he said was slated to begin ramping later in 2026.

Evans said Black Hills was actively negotiating more than 2.5 gigawatts of additional demand, including a 1.8-gigawatt data center project. He said the company restricted its growth pipeline to demand covered by nondisclosure agreements and active negotiations.

Asked about Crusoe’s exit, Evans said it had not delayed negotiations for the 1.8-gigawatt project and that Black Hills was negotiating with a hyperscale end user. He said the company was on track to finish multiple agreements by the end of the quarter, but added that a later completion would mean the parties were continuing to put the agreements in place. Asked about a 75-megawatt opportunity, he said it involved a different customer and was part of the additional pipeline.

On investment, Evans said Black Hills was executing a nearly $1 billion capital plan for 2026. He said the 99 megawatt Lange II generation project remained on schedule to enter service in South Dakota later in the year. He also said the company was advancing rate reviews for Arkansas Gas and South Dakota Electric and had filed a new Colorado Electric rate request.

For the Northwestern Energy merger, Evans said Black Hills had received federal approval and settlement approvals in Nebraska and South Dakota. He said Montana was the last approval required and that the company remained on track for a second-half closing.

Guidance

Black Hills reaffirmed its 2026 adjusted EPS guidance of $4.25 to $4.45. Evans said on the call that the company remained on track to achieve its earnings guidance for the year.