Xcel Energy Inc. (XEL) Earnings & Analysis

Latest quarter

Xcel Energy reported third-quarter revenue of $4.2 billion, above the $4.1 billion consensus and up from $3.9 billion a year earlier. Adjusted earnings of $1.52 per share also exceeded the $1.39 consensus.

The company’s diluted GAAP earnings rose to $1.52 per share from $0.88. On an ongoing basis, earnings increased from $1.24 per share a year earlier. Xcel attributed the ongoing increase primarily to greater recovery of electric infrastructure investments, earnings on equity method investments and unseasonably warm weather, partly offset by higher financing costs.

By utility, the filing reported higher quarterly ongoing earnings contributions from Public Service Company of Colorado, Southwestern Public Service and NSP-Wisconsin, while NSP-Minnesota’s contribution declined. The filing also reported higher quarterly operations and maintenance expenses and interest charges.

Xcel’s gross margin rose to 73.0% from 70.3%, and its operating margin increased to 28.5% from 19.1%. The company reported free cash flow of −$1.2 billion, compared with −$1.3 billion a year earlier.

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

What management said on the call

CFO Brian Van Abel said year-to-date electric sales rose 2.5% after adjusting for weather, driven by energy-sector activity at Southwestern Public Service, manufacturing across the operating companies and higher residential use per customer. He said higher electric revenue added $0.32 per share to quarterly earnings, while higher interest expense reduced earnings by 13 cents per share.

CEO Bob Frenzel said Xcel’s updated $70 billion plan for 2027–2031 is anchored in serving existing customers, strengthening networks and modernizing generation. He said the plan does not depend on signing new data center customers. The plan includes approximately $4 billion for distribution and transmission investments intended to improve resilience and reduce future wildfire risk.

Frenzel said Xcel remains on track to sign agreements for an additional one gigawatt of data centers by the end of 2026 and another three gigawatts by the end of 2027. He said the infrastructure for those centers sits outside the base plan. On customer pricing, Frenzel said Xcel has filed large-load tariffs with cost tests, long-term commitments, minimum bills, credit support and exit protections, adding: “existing customers should not subsidize new large loads.”

Van Abel said Xcel had proposed a Minnesota electric rate stabilization plan that would keep customer base rates flat in 2027 and 2028, with a commission decision requested in January 2027. He said the capital plan includes approximately $26 billion of additional debt and $8 billion of equity, of which more than 40% had already been contracted.

Asked about large-load opportunities, Van Abel said the Upper Midwest and Southwestern Public Service offered the biggest near-term prospects, while Colorado was likely to develop later. On a question about Michigan, he said Xcel was selling a business serving 9,000 electric customers and 6,000 gas customers and expected the transaction to close by the end of next year.

Guidance

Xcel narrowed its 2026 ongoing earnings guidance to $4.10 to $4.16 per share from its previously reaffirmed $4.04 to $4.16 range, and initiated 2027 guidance of $4.48 to $4.62 per share.

For 2026, the company reduced its projected increase in capital rider revenue to $370.0 million–$380.0 million from $480.0 million–$490.0 million. Xcel also raised its expected operations and maintenance expense growth to 5.00% from 3.00%.