In what its CEO said was “truly a stellar year,” Xcel Energy on Thursday reported year-end earnings of $2.79/share, a 15-cent increase from its 2019 performance.
“Last year was certainly a challenging year,” Xcel CEO Ben Fowke told financial analysts during an earnings conference call. “But our employees came through delivering on our financial and operational objectives while mitigating the impacts of COVID and helping our communities.”
Fowke highlighted the Minneapolis-based company’s environmental, social and governance (ESG) performance, telling analysts Xcel estimated it has reduced carbon emissions by about 50% from 2005 levels. Xcel has 3.8 GW of wind capacity; it is converting a Texas coal plant to natural gas; and it has proposed closing Colorado coal plants by 2024.
Eliminating the last 20% of carbon emissions will take technologies becoming commercially viable, Fowke said, because “this transition is based on economics.”
“You get a lot of bipartisan support when economics can drive the decisions,” he said. “Could we go faster than our goal of 2050? It’s possible. But I think that would mean that those technologies that we refer to — whether it is the next-generation nuclear; whether it is the development of hydrogen; whether it is carbon capture working economically; whether it is long-term storage — they have to come into the money much sooner than I think they will.”
Fowke said completely moving away from fossil fuels will require “an incredible emergence and acceleration of technologies,” reminding listeners that “2035 is like tomorrow in utility land as far as technologies go.”
“I have always said we will move as fast as the speed of technology, and that is what we will do,” he said. “We support 100% carbon free. We are aligned with that. I think under the Biden administration, you will see an acceleration of [electric vehicles] and an acceleration of transmission build. I think you will see an acceleration of R&D and the technologies that we need to achieve those goals, whether it is 2035, 2040 or 2050.
“Nobody would have thought that we would be where we are today as an industry, and certainly not at Xcel Energy, just five years ago, so I’m excited about what the future possibilities hold,” Fowke said.
Xcel’s quarterly earnings came in at $288 million ($0.54/share), in line with Zacks Investment Research’s consensus estimate. Xcel reported earnings of $292 million ($0.56/share) for 2019’s fourth quarter.
Wall Street reacted to the earnings announcement by driving Xcel’s share price to $65.15 in mid-afternoon trading, following Wednesday’s close of $63.82. Xcel was trading at $63.64 in after hours.
