Xcel Energy Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 30 July 2026: press release. Guidance figures: 1 raised, 3 lowered, 8 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Second quarter EPS rose to $0.93: Diluted GAAP and ongoing EPS were $0.93 against $0.75 a year earlier. GAAP net income was $586 million, against $444 million in the same quarter of 2025. Source
• Guidance reaffirmed at $4.04 to $4.16: The company reaffirmed 2026 ongoing EPS guidance of $4.04 to $4.16, unchanged from the first quarter, while depreciation, interest and AFUDC assumptions were revised. Source
• Minnesota electric ROE raised to 9.60%: The MPUC issued a verbal decision in June 2026 in NSP-Minnesota's electric case: about $211 million over two years, average annual increase 2.9%, equity ratio held at 52.5%. Source
• Google data center agreement advances: NSP-Minnesota's electric service agreement with a new Google data center has Google paying all costs for its new service. Management estimates about $1.1 billion of benefits to customers if approved. Source
• Depreciation fell on nuclear extensions: Depreciation and amortization dropped $60 million in the quarter, as 2025 and 2026 nuclear life extension reductions were recognized in the second quarter, partly offset by system expansion. Source
• Smokehouse Creek settlements now $404 million: Settlements reached total $404 million of expected loss payments, with $398 million paid through June 30, 2026. Total estimated losses and legal costs for the matter are $503 million. Source
• Remaining claims could exceed insurance: Remaining complaints and claims could exceed the $525 million annual policy coverage, of which about $80 million remains. The company says this could have a material adverse effect. Source

“consistent execution across all our key priorities: customer satisfaction and affordability, system reliability and resiliency, meeting the clean energy aspirations of our communities and ensuring financial discipline”

Bob Frenzel, chairman, president and CEO of Xcel Energy

Guidance

What changed from last quarter

• Guidance kept: 2026 ongoing EPS guidance of $4.04 to $4.16 was reaffirmed, the same range given in the first quarter. Source
• Guidance lowered: Depreciation increase guidance moved to $140 million to $150 million from $330 million to $340 million, with management citing nuclear life extensions. Source
• Guidance raised: AFUDC equity guidance rose to $150 million to $160 million from $130 million to $140 million. Source
• Guidance lowered: Capital rider revenue guidance moved to $480 million to $490 million from $505 million to $515 million. Source
• Guidance lowered: Interest expense guidance moved to $240 million to $250 million from $270 million to $280 million. Source
• New: The MPUC issued a verbal decision in NSP-Minnesota's electric case in June 2026, raising the ROE from 9.25% to 9.60%. Source
• New: PSCo filed a non-unanimous electric rate settlement in June 2026 with a $225 million revenue increase and a 9.3% ROE. Source
• New: PSCo filed a natural gas rate settlement in July 2026 with a $123 million revenue increase and a 9.2% ROE. Source
• New: SPS and parties filed a New Mexico stipulation in June 2026 for a $90 million base rate increase and a 9.5% ROE. Source
• New: The South Dakota Public Utilities Commission approved a $26 million net annual electric increase in May 2026, effective July 1, 2026. Source
• New: The MPUC ordered a $41 million disallowance for Prairie Island replacement power costs in May 2026. Source
• New: PSCo completed $1.3 billion of first mortgage bonds in 2026 that were not listed in the first quarter financing table. Source
• Ended: Settlements have now been executed with all Marshall Wildfire plaintiffs and subrogation insurers, where the first quarter showed three individual plaintiffs still litigating. Source

Earnings and growth drivers

• Second quarter EPS rose to $0.93: Diluted GAAP and ongoing EPS were $0.93 against $0.75 a year earlier. GAAP net income was $586 million, against $444 million in the same quarter of 2025. Source
• Year-to-date EPS up on recovery: Year-to-date ongoing EPS was $1.84, against $1.59. Ongoing figures add back a $0.04 Prairie Island refund and remove a $0.02 Marshall Wildfire benefit. Source
• Guidance reaffirmed at $4.04 to $4.16: The company reaffirmed 2026 ongoing EPS guidance of $4.04 to $4.16, unchanged from the first quarter, while depreciation, interest and AFUDC assumptions were revised. Source
• Electric recovery drove quarter gains: Lower electric fuel and purchased power added $0.30 per share in the quarter and higher AFUDC added $0.08. Other net items added $0.12. Source
• Higher financing costs offset gains: Interest charges rose $94 million in the quarter, reducing EPS by $0.12, and common equity financing reduced EPS by $0.06. Management attributed the year-to-date interest increase to higher debt levels. Source

Rate case outcomes by jurisdiction

• Minnesota electric ROE raised to 9.60%: The MPUC issued a verbal decision in June 2026 in NSP-Minnesota's electric case: about $211 million over two years, average annual increase 2.9%, equity ratio held at 52.5%. Source
• Colorado electric settlement filed: PSCo and parties filed a non-unanimous settlement with a 9.3% ROE and 54.5% equity ratio. It includes a performance framework for the Comanche Unit 3 coal facility through 2029. Source
• Colorado gas settlement at $123 million: The July 2026 settlement in PSCo's natural gas case sets a 9.2% ROE and a 54.5% equity ratio, based on a 2025 historic test year with average rate base. Source
• New Mexico stipulation for SPS: SPS and parties filed a stipulation for a $90 million base rate increase, with a 9.5% ROE and 54.70% equity ratio, based on the filed future test year. Source
• Minnesota gas settlement at $38 million: NSP-Minnesota and certain intervenors reached a non-unanimous settlement for a $38 million (4.9%) revenue increase, with a weighted average cost of capital of 7.21%. Source
• South Dakota electric increase approved: The SDPUC approved a black box settlement for a $26 million net annual electric increase, down from the $44 million (15%) originally requested in 2025. Source

“The change in earnings per share was primarily driven by increased recovery of electric infrastructure investments, partially offset by higher financing costs.”

Xcel Energy Inc., press release

Sales and demand

• Commercial and industrial sales growing: Year-to-date weather-normalized commercial and industrial electric sales rose 3.0% for the company, with higher use per customer in SPS and NSP-Minnesota and customer growth in NSP-Wisconsin. Source
• Gas sales fell on lower use: Firm natural gas sales declined 7.8% in the second quarter and 14.7% year-to-date on an actual basis. Management attributed the decline to reduced use per customer. Source
• Weather trimmed year-to-date earnings: Weather reduced year-to-date EPS by $0.10 compared with normal conditions. The second-quarter weather effect against normal was $0.005 per share. Source
• Google data center agreement advances: NSP-Minnesota's electric service agreement with a new Google data center has Google paying all costs for its new service. Management estimates about $1.1 billion of benefits to customers if approved. Source

Costs, depreciation and financing

• Fuel costs fell with pass-through: Electric fuel and purchased power expense fell $240 million in the quarter, largely from lower commodity prices in SPS. These costs are generally recovered through regulatory mechanisms. Source
• Depreciation fell on nuclear extensions: Depreciation and amortization dropped $60 million in the quarter, as 2025 and 2026 nuclear life extension reductions were recognized in the second quarter, partly offset by system expansion. Source
• AFUDC rose on system investment: AFUDC increased $54 million in the second quarter and $115 million year-to-date, which management attributed to system investment, while higher debt levels drove interest charges up. Source
• O&M rose on generation costs: O&M expenses rose $16 million in the second quarter and $5 million year-to-date, with the year-to-date increase primarily from higher generation costs. Source

Wildfire litigation

• Smokehouse Creek settlements now $404 million: Settlements reached total $404 million of expected loss payments, with $398 million paid through June 30, 2026. Total estimated losses and legal costs for the matter are $503 million. Source
• Remaining claims could exceed insurance: Remaining complaints and claims could exceed the $525 million annual policy coverage, of which about $80 million remains. The company says this could have a material adverse effect. Source
• Texas claims and state lawsuit progress: Of 73 complaints, 28 are resolved. SPS has received 304 claims, with 237 final settlements, and a Texas Attorney General lawsuit seeks damages and civil penalties. Source
• Marshall Wildfire settlements executed: PSCo's $640 million Marshall Wildfire settlement payments are executed. Year-to-date, PSCo recorded a $19 million net reduction to operating expenses from a higher insurance recoverable estimate. Source

Capital, debt and liquidity

• Debt issuance completed across utilities: Completed issues in 2026 include $1.3 billion PSCo, $1.2 billion NSP-Minnesota, $1.2 billion SPS and $800 million Xcel junior subordinated notes. A $1.1 billion PSCo bond and $700 million senior notes are upcoming. Source
• Forward sale agreements expanded: Forward sale agreements covered 42.5 million shares in the first half of 2026, with minimum expected proceeds of $3.2 billion. Total unsettled shares at June 30 were 69.7 million. Source
• Term loan fully drawn, matures January 2027: The $1.5 billion Xcel Energy Inc. term loan was fully drawn at June 30, against $1.15 billion drawn at March 31. Total committed liquidity was $4,694 million as of July 28, 2026. Source
• Debt share of capital rose: Total debt was $39,457 million at June 30, 2026, or 62% of total capitalization, up from $33,883 million and 59% at December 31, 2025. Source
• Credit ratings unchanged at July 28: Ratings were listed as of July 28, 2026. Moody's rated Xcel Energy Inc. unsecured debt Baa1 with a Negative view, and PSCo secured debt A1 Negative. Source

Resource plans and large loads

• Minnesota resource RFP shortlist announced: Short-listed projects for the NSP-Minnesota and NSP-Wisconsin RFP seeking up to 3,500 MW were announced in June 2026. Source
• SPS preferred portfolio sized at 3,928 MW: SPS's preferred portfolio includes wind, solar, solar plus storage and gas, totaling 3,928 MW nameplate, of which 2,623 MW is company owned and 1,305 MW is power purchase agreements. Source
• PSCo needs about 5,400 MW of capacity: The CPUC approved a load forecast with 3% compound annual sales growth through 2031 and a generation capacity need of about 5,400 MW for PSCo. Source

Shareholder returns and objectives

• Quarterly dividend rose to $0.5925: Cash dividends declared were $0.5925 per common share in the quarter, against $0.57 a year earlier. Book value per share was $38.36, against $35.67. Source
• Long-term EPS growth objective stated: Management stated a long-term objective of annual EPS growth of 6% to 8+%, based off $3.80 per share. Source
• Dividend growth and payout objectives: Objectives include annual dividend increases of 4% to 6% and a dividend payout ratio target of 45% to 55%. Source
• Senior secured rating objective: Management stated a goal of maintaining senior secured debt credit ratings in the A range. Source

Coming up, as management said on 30 July 2026

• Minnesota final electric order: A final written MPUC order on the NSP-Minnesota electric case was expected by July 31, 2026, following the June verbal decision. Source
• Minnesota gas ALJ report and decision: The administrative law judge report on the NSP-Minnesota gas settlement is expected by September 2026, with an MPUC decision in November 2026. Source
• Colorado electric decision in third quarter: A CPUC decision and implementation of final rates for PSCo's electric case is anticipated in the third quarter of 2026. Source
• Colorado gas decision in fourth quarter: A CPUC decision and implementation of final rates for PSCo's natural gas case is anticipated in the fourth quarter of 2026. Source
• New Mexico decision and December rates: An NMPRC decision on the SPS stipulation is anticipated in the fourth quarter of 2026, with rates expected in December 2026. Source
• PSCo Phase II solicitation RFP: The RFP for the Phase II competitive solicitation process, seeking the balance of PSCo's resource needs through 2031, is expected in the third quarter of 2026. Source
• SPS Texas approval expected: SPS has NMPRC approval of certificate filings for specific assets, and PUCT approval of those filings is expected in the third quarter. Source
• SPS project certificates filed: Project certificate filings for the SPS resource RFP are expected in late 2026 or early 2027. Source
• Google request decision in early 2027: The MPUC request for approval of the Google electric service agreement, including a 1,900 MW Clean Energy Accelerator Charge, was filed in April 2026, with a decision expected in early 2027. Source
• Remaining clean energy requests by year-end: Approvals for 1,000 MW of Clean Energy Accelerator resources are pending, and the remaining resources are expected to be requested in existing processes by the end of 2026. Source

Figures management reported

Risks management discussed

• Financial: Smokehouse Creek loss estimate excludes government penalties, fines and exemplary damages, which could add to exposure beyond the reported amounts. Source
• Financial: Capital market access depends partly on credit ratings, and Xcel Energy Inc. unsecured debt and PSCo secured debt carry Negative views at Moody's. Source
• Regulatory: NMPRC Staff opposes certain components of the SPS New Mexico stipulation, which remains pending a decision. Source
• Demand: Weather deviations from normal can affect earnings; Minnesota true-up and decoupling mechanisms predominately mitigate weather impacts there. Source

Earlier plans management reported on

• Not stated: Management reaffirmed the 2026 ongoing EPS guidance range given earlier in the year. Source
• Not stated: The Phase II solicitation RFP for PSCo was expected to be issued in the third quarter of 2026, as stated earlier and repeated this quarter. Source
• Not stated: The long-term dividend growth objective of 4% to 6% annual increases was restated in the second quarter materials. Source

Other quarters

• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.