CenterPoint Energy (NYSE:CNP) executives celebrated their company’s status as a “pure play regulated utility” during their first-quarter earnings call Tuesday with financial analysts.
“We heard loud and clear that many of you wanted CenterPoint to exit the [gas] midstream industry,” CEO David Lesar said. “We did it in a way we believe was better and quicker than many of you ever expected.”
Late last year, CenterPoint and OGE Energy (NYSE:OGE) completed the $7.2 billion sale of their partnership in Enable Midstream Partners to Energy Transfer Partners (NYSE:ET). (See OGE, CenterPoint Complete Enable’s Disposal.)
CenterPoint sold all its common units within four months of the transaction at a 20% premium to Energy Transfer’s unit price when the deal was announced, Lesar said.
“Not a bad outcome for those shareholders who thought we would never get out of this investment, let alone receive approximately $1.3 billion of net after-tax proceeds from it,” he said. “We listen to our investors.”
The Houston-based utility in February also sold gas distribution businesses in Arkansas and Oklahoma for more than $1.6 billion. It has used $1.8 billion of the combined proceeds to reduce debt, with a goal of slicing parent-level debt to about 20% of the total by the end of the year.
Management expects full recovery of $1.1 billion in gas costs incurred during the 2021 winter storm through Texas securitization efforts. CenterPoint will also soon file in Indiana for the cost of retiring two coal plants. It expects a decision by the end of the year and, with approval, securitization bonds to be issued early next year.
The utility reported earnings of $518 million ($0.82/diluted share) for 2022’s first quarter, up from $334 million ($0.56/diluted share) for the same period a year ago. The non-GAAP earnings of 47 cents/share just missed the Zacks Consensus Estimate of 48 cents.
The company’s share price closed at $30.54 on Tuesday, a gain of 33 cents.
