WEC Energy Group, Inc. (WEC) Earnings & Analysis

Latest quarter

WEC Energy Group reported third-quarter revenue of $2.3 billion, above the $2.2 billion consensus and up from $2.1 billion a year earlier. Adjusted earnings per share, as counted by the consensus, were $1.18 against an estimate of $0.98. WEC’s diluted EPS was $1.19, compared with $0.83 a year earlier.

The company’s filing attributed higher Wisconsin segment earnings to rate orders, warmer summer weather, sales to very large customers and returns earned during construction. The filing said those gains were partly offset by higher operating expenses, including regulatory amortization, transmission costs and depreciation. It also reported a smaller Illinois segment loss, citing lower benefit expenses and higher fixed charges.

WEC’s operating margin rose to 24.6% from 21.4% a year earlier, while gross margin increased to 71.6% from 71.1%. The company recorded free cash flow of −$95.4 million, compared with −$700.8 million in the prior-year quarter.

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

What management said on the call

CEO Scott Lauber said warmer-than-normal weather, capital-plan execution and operating efficiency drove third-quarter earnings. CFO Xia Liu estimated weather added $0.08 per share compared with normal conditions, while rate-base growth contributed $0.19 to earnings. Liu said projects for and supported by very large customers accounted for $0.12 of incremental construction-related returns.

Liu said weather-normalized retail electric sales grew 4.1% from a year earlier, driven by very large customers; excluding those customers and the iron ore mine, sales grew 0.4%. Lauber said WEC expects electric demand to grow 4.9 gigawatts between 2026 and 2031, including forecast demand in the I-94 region and at the Vantage data-center site.

To serve demand, Lauber outlined a $47.5 billion capital plan for 2027–2031, including an incremental $6.8 billion for natural gas generation versus the prior plan. He said WEC also plans to extend its Point Beach power purchase agreement by 20 years, subject to regulatory approval. On rates, Lauber said WEC expects Wisconsin final orders by year-end and an Illinois decision in December.

Asked about financing additional investment, Liu said WEC expects roughly 40% equity content for each incremental dollar of capital over time. She said the company has been “working with our VLC customers to try to charge more cash returns” during construction instead of assuming mostly noncash returns. Liu also expects operating cash flow and incremental debt to fund portions of the five-year plan.

Discussing customer concentration, Lauber pointed to financial security requirements and commitments matched to asset lives. He said “the return on those assets is where the earnings come from,” rather than electricity volumes alone. On Illinois pipe retirement, Lauber said workforce constraints had slowed the ramp-up and that WEC was working with trade associations and colleges to train workers.

Guidance

WEC raised and narrowed its 2026 earnings guidance to $5.60 to $5.64 per share from $5.51 to $5.61, assuming normal weather for the rest of the year. Lauber said the updated plan calls for $47.5 billion of capital investment from 2027 through 2031, compared with $37.5 billion in the previous five-year plan. He projected compound annual EPS growth of 7% to 9+% from 2027 to 2031, based on the midpoint of original 2026 guidance; the prior projection was 7% to 8% annually between 2026 and 2030.