• Reported Net Income: $48.2 million for Q1 2024, falling short of the estimated $59.31 million.

• Earnings Per Share (EPS): Reported at $0.95, below the estimated $1.15.

• Year-over-Year Comparison: Net income decreased from $56.1 million in Q1 2023 to $48.2 million in Q1 2024.

• Customer Growth: Contributed an increase of $4.7 million to operating income, with customer numbers growing by approximately 15,800 or 2.5%.

• Usage per Retail Customer: Decreased by $9.1 million, primarily due to milder weather reducing energy use for heating.

• Depreciation and Interest Expenses: Increased by $8.6 million and $1.8 million respectively, impacting net income negatively.

• 2024 Earnings Guidance: Reaffirmed in the range of $5.25 to $5.45 per diluted share, assuming normal weather conditions and power supply expenses.

• Warning! GuruFocus has detected 6 Warning Signs with IDA.

On May 2, 2024, Idacorp Inc (NYSE:IDA) disclosed its first-quarter earnings for 2024, revealing a net income of $48.2 million, or $0.95 per diluted share, a decline from $56.1 million, or $1.11 per diluted share, reported in the same period last year. This performance fell short of analyst expectations, which had estimated earnings of $1.15 per share and a net income of $59.31 million. The company released these figures in its recent 8-K filing.

Idacorp Inc, headquartered in Boise, Idaho, operates primarily through its subsidiary, Idaho Power. This utility company engages in the generation, transmission, distribution, and sale of electric energy across the Northwestern United States. With a significant portion of its energy produced from hydroelectric and coal-fired plants, Idacorp serves a diverse customer base, including residential, commercial, and industrial sectors.

Operational Highlights and Financial Performance

Idacorp's President and CEO, Lisa Grow, noted that the quarter reflected a mixed performance with benefits from rate changes and customer growth being offset by lower usage per customer due to milder weather, alongside rising depreciation and interest expenses linked to system investments. The company also continues to navigate through a request for proposal process to address rapid customer and load growth, potentially leading to higher capital expenditures.

The detailed financial results show a decrease in net income primarily due to lower performance at Idaho Power. Despite a 2.5% increase in customer numbers, reduced energy usage, particularly among residential customers due to warmer temperatures, significantly impacted revenues. Additionally, increased expenses related to pension and wildfire mitigation efforts further strained the financial results.

Challenges and Strategic Measures

The first quarter saw Idacorp grappling with several challenges. Key among these was the impact of weather conditions on energy usage. The company's operational costs also rose, notably from pension-related expenses and investments in wildfire mitigation, which are critical for maintaining service reliability and safety but have immediate financial impacts. Moreover, depreciation expenses increased due to expanded plant services, reflecting ongoing investments in infrastructure to support long-term growth.

Future Outlook and Earnings Guidance

Looking ahead, Idacorp reaffirms its full-year earnings guidance for 2024, projecting earnings per diluted share in the range of $5.25 to $5.45. This forecast assumes normal weather conditions and stable power supply expenses. The guidance also includes the utilization of $35 to $60 million in additional tax credits under the Idaho earnings support regulatory mechanism, which will aid in offsetting some of the financial pressures.

Idacorp's strategic focus remains on enhancing its operational efficiency and financial stability. The company is committed to navigating the complexities of the energy market, ensuring reliable service delivery, and pursuing sustainable growth initiatives aligned with its long-term objectives.

Conclusion

Despite the challenges faced in the first quarter, Idacorp is poised to continue its trajectory towards sustainable growth. Investors and stakeholders are encouraged to monitor the company's progress as it implements strategic initiatives to enhance shareholder value and maintain its competitive position in the utility sector.

Explore the complete 8-K earnings release (here) from Idacorp Inc for further details.

This article first appeared on GuruFocus.