RAPID CITY, S.D., Dec. 09, 2025 (GLOBE NEWSWIRE) -- Black Hills Corp. (NYSE: BKH) today announced that its natural gas utility subsidiary in Nebraska received approval from the Nebraska Public Service Commission of a unanimous settlement agreement for new rates. The new rates will provide recovery of over $453 million of system investments since the utility’s last general rate filing in 2020 and operational costs required to deliver safe, reliable natural gas service for over 304,000 Nebraska customers. “Th ...

Core Viewpoint - Black Hills Corp. has filed a rate review application with the Arkansas Public Service Commission, seeking $29.4 million in new annual revenue to cover capital infrastructure and operational costs for its natural gas utility serving over 189,000 customers in Arkansas [1][2]. Summary by Sections Rate Review Application - The company is requesting $29.4 million in new annual revenue to recover necessary costs for safe and reliable natural gas service [1]. - This request is based on a capital structure of 50.2% equity and 49.8% debt, with a targeted return on equity of 10.5% [3]. Infrastructure Investments - Black Hills Corp. aims to recover approximately $147 million invested in safety, reliability, and system integrity for its natural gas pipeline infrastructure since the last general rate filing in 2023 [2]. - These investments are essential for system growth and compliance with state and federal regulations [2]. Company Overview - Black Hills Corp. serves 1.35 million natural gas and electric utility customers across eight states, including Arkansas, Colorado, and South Dakota [4]. - The company emphasizes its commitment to providing safe and reliable natural gas service while supporting growth through critical infrastructure investments and prudent cost management [3].

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Core Insights - The investment community is preparing for the gradual withdrawal of Warren Buffett from the forefront of investing, acknowledging the end of an era in which his influence has been significant [1] Group 1 - Buffett's investment lessons are expected to endure and continue to provide guidance for investors even as he steps back [1]

Core Insights - Black Hills Corporation (NYSE:BKH) is recognized as one of the 15 overlooked dividend stocks to consider for investment [1] - Scotiabank upgraded Black Hills from Sector Perform to Outperform, raising the price target from $66 to $81, highlighting the strong growth potential from data centers in Wyoming [2] - The analyst noted that the Crusoe/Tallgrass project could enhance earnings by approximately 35% [2] - Despite concerns regarding a pending merger, the downside risk is considered limited, and the current risk/reward profile of the stock is viewed positively [3] Financial and Strategic Developments - In its Q3 2025 earnings report, Black Hills outlined a five-year strategy targeting 500 MW of data center demand by 2029, supported by partnerships with Microsoft and Meta [4] - The company is expanding its data center load pipeline from over 1 GW to more than 3 GW, which is expected to drive significant earnings growth through innovative tariffs and investments in new projects [4] - Black Hills aims to enhance its position as a customer-focused, growth-driven utility company committed to becoming the energy partner of choice [5]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported GAAP EPS of $0.34, including $0.10 of merger-related costs, resulting in an adjusted EPS of $0.45 compared to $0.35 for Q3 2024, reflecting a year-over-year increase [10][11] - Year-to-date EPS was reported at $2.58, including $0.11 of merger-related costs, leading to an adjusted EPS of $2.68, a 6.3% increase from $2.52 in the same period last year [12][14] - The company reaffirmed its 2025 earnings guidance with an adjusted EPS range of $4-$4.20, indicating a 5% growth rate at the midpoint over 2024 EPS [6][15] Business Line Data and Key Metrics Changes - Regulatory efforts contributed $0.21 per share of new rates and rider recovery margin for Q3 2025, offsetting unfavorable weather and increased operating costs [10][11] - Customer growth, particularly from large load customers like data centers, is positively impacting earnings, with ongoing negotiations for over 3 gigawatts of demand [6][18] Market Data and Key Metrics Changes - The company is experiencing strong economic conditions in its service territories, with no significant indicators of weakness noted [32] - The merger with Northwestern Energy is expected to enhance competitive positioning and create additional value for customers and shareholders [9] Company Strategy and Development Direction - The company is executing a $1 billion capital plan to support key projects and has made significant progress on regulatory and growth initiatives [4][5] - The merger with Northwestern Energy is anticipated to be finalized in the second half of next year, which will provide increased scale and new opportunities [9][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving long-term growth targets, supported by a $4.7 billion capital plan and strong customer demand [7][15] - The company is on track to complete major projects, including the Ready Wyoming transmission expansion and the Lang 2 generation project, which are expected to enhance service reliability and support growth [20][21] Other Important Information - The company has maintained a healthy balance sheet with a net debt to total capitalization target of 55% and a strong liquidity position [14] - The company has a long-standing commitment to dividends, targeting a payout ratio of 55%-65% [16] Q&A Session Summary Question: Data center resource requirements and equipment reservations - Management confirmed they have reservations in place and are utilizing a flexible service model to meet growing demand [26][27] Question: Concerns about the approval process in Montana - Management is closely monitoring the situation and remains optimistic about the approval process [29] Question: Fourth-quarter issues that might impact guidance - Management indicated no significant operational or financial issues, with weather being the primary concern [30][31] Question: Indicators of economic weakness in service areas - Management reported no signs of weakness in their service territories, with conditions remaining strong [32] Question: EPS upside from data center projects - Management acknowledged the potential for significant EPS growth from data centers, but emphasized the variability in contractual agreements [40][41] Question: Strategic considerations for coal mine assets - Management is keeping options open regarding the coal mine, aware of potential rare earth minerals but not expecting significant monetization in the near term [45]

Customer Base and Operations - The company serves over 1.35 million customers across 800+ communities in eight states, focusing on operational excellence and growth[126] Financial Performance - For the three months ended September 30, 2025, Electric Utilities' operating income decreased by $2.7 million to $62.4 million, while Gas Utilities' operating income increased by $9.9 million to $20.8 million[141] - For the nine months ended September 30, 2025, Electric Utilities' operating income decreased by $10.3 million to $165.7 million, while Gas Utilities' operating income increased by $43.1 million to $207.7 million[141] - The company’s net income for the nine months ended September 30, 2025, was $191.1 million, an increase of $8.5 million compared to the same period in 2024[141] - Electric Utilities revenue for the three months ended September 30, 2025, was $249.7 million, an increase of 7.4% compared to $232.5 million in the same period of 2024[148] - Total revenue for the nine months ended September 30, 2025, was $706.3 million, up from $659.8 million in 2024, reflecting a 7.0% increase[154] - Gas Utilities revenue for the three months ended September 30, 2025, was $184.4 million, up 6.2% from $173.6 million in 2024[162] - The total revenue for Gas Utilities for the nine months ended September 30, 2025, was $979.9 million, an increase of 10.8% from $884.2 million in 2024[162] Margins and Expenses - Electric Utility margin (non-GAAP) for the three months ended September 30, 2025, increased by $2.3 million to $179.9 million from $177.6 million in 2024[149] - The Electric Utility margin for the nine months ended September 30, 2025, increased by $10.0 million to $514.1 million compared to $504.1 million in 2024[149] - Operations and maintenance expenses rose by $4.7 million to $69.8 million for the three months ended September 30, 2025, compared to $65.1 million in 2024[148] - Operations and maintenance expenses for Gas Utilities decreased by $4.5 million in Q3 2025 compared to Q3 2024, primarily due to lower employee-related expenses[163] Energy Generation and Demand - Wyoming Electric set a new all-time peak load of 379 MW on June 20, 2025, surpassing the previous peak of 314 MW set in January 2024[140] - Coal generation decreased to 556.8 GWh for the three months ended September 30, 2025, from 645.7 GWh in 2024, primarily due to unplanned outages[155] - Total purchased energy increased to 734.8 GWh for the three months ended September 30, 2025, compared to 516.1 GWh in 2024, driven by increased demand[156] - Total generated electricity for the nine months ended September 30, 2025, was 3,856.7 GWh, a decrease of 2.9% from 3,971.3 GWh in 2024[157] - Total purchased electricity for the nine months ended September 30, 2025, was 2,225.3 GWh, a 30.8% increase from 1,701.3 GWh in 2024[157] Debt and Capital Expenditures - Interest expense increased by $17.7 million for the nine months ended September 30, 2025, primarily due to higher interest rates on long-term debt[142] - Capital expenditures for the nine months ended September 30, 2025, totaled $(550.2) million, an increase of $19.7 million compared to $(530.5) million in 2024, primarily due to the Ready Wyoming and Lange II projects[180] - The company completed a public debt offering of $450 million on October 2, 2025, with net proceeds intended to repay $300 million of senior unsecured notes due January 2026[175] Equity and Liquidity - Total stockholders' equity as of September 30, 2025, was $3,768.0 million, compared to $3,501.5 million as of December 31, 2024, indicating a growth in equity[174] - Available liquidity as of September 30, 2025, was $642.0 million, slightly up from $628.8 million as of December 31, 2024[174] - The company's debt to capitalization ratio improved to 53.7% as of September 30, 2025, down from 55.6% at the end of 2024[174] Tax and Other Expenses - Income tax expense increased by $2.9 million primarily due to higher pre-tax income[147] - The effective tax rate for the three months ended September 30, 2025, was 13.5%, up from 10.0% in 2024, primarily due to non-deductibility of certain merger-related expenses[177] Merger Activity - The company is in the process of a merger with NorthWestern, which was agreed upon on August 18, 2025[130] - Operating loss for the three months ended September 30, 2025, increased to $(4.5) million, compared to $(0.2) million for the same period in 2024, primarily due to $8.4 million of NorthWestern merger-related costs[171] Sustainability and Corporate Responsibility - The company published its 2024 Corporate Sustainability Report, highlighting progress on major projects and climate goals[140]

Financial Performance & Outlook - Black Hills Corp reaffirmed its full-year adjusted earnings guidance range of $400 to $420[14] - The company is targeting a long-term EPS growth of 4% to 6%, planning to deliver in the upper half of the range starting in 2026[14] - Black Hills Corp is forecasting $1 billion in capital investment for 2025 and $47 billion from 2025 to 2029[14] - The company completed a $220 million equity issuance in 2025[12] Strategic Initiatives & Merger - Black Hills Corp is progressing with its merger with NorthWestern Energy, having filed joint applications for transaction approval with regulatory commissions in Montana, Nebraska, and South Dakota[21, 22] - The company expects to file a joint application with FERC during Q4 2025[22] - Black Hills Corp is engaged with high-quality partners representing 3 GW+ of data center load requests[12] Capital Investments & Projects - The company's capital investment forecast is $47 billion from 2025-2029[16] - The Ready Wyoming transmission expansion project is on track to be placed in service by year-end, with the first phase completed in late 2024 at a cost of ~$40 million out of a total ~$350 million project[12, 58] - Construction has commenced on the 99 MW Lange II generation project in Rapid City, with an expected in-service date in the second half of 2026[12] Regulatory & Reliability - Black Hills Corp reached a settlement for the Nebraska Gas rate review[12] - The company was recognized by Escalent as the 2025 Most Trusted Utility Brand and 2025 Easiest Utilities to do Business With[12]

Financial Performance - Net income available for common stock for Q3 2025 was $24.9 million, compared to $24.4 million in Q3 2024, while year-to-date net income was $186.6 million, up from $175.0 million in the same period last year [2][20]. - Adjusted EPS for Q3 2025 was $0.45, excluding $0.10 of merger-related costs, compared to $0.35 in Q3 2024; year-to-date adjusted EPS was $2.68, up from $2.52 in 2024 [3][4][20]. - Revenue for the three months ended September 30, 2025, was $430.2 million, a 7.1% increase from $401.6 million in the same period of 2024 [22]. - Operating income for the three months ended September 30, 2025, was $78.7 million, compared to $75.8 million in 2024, reflecting a 3.8% increase [22]. - For the nine months ended September 30, 2025, total revenue was $1,674.5 million, up from $1,530.6 million in the same period of 2024, representing a 9.4% increase [27]. - Total revenue for the nine months ended September 30, 2025, reached $706.3 million, up 7.0% from $659.8 million in 2024 [31]. Capital and Investment - The company is advancing a $4.7 billion five-year capital plan, which includes a 260-mile transmission expansion project expected to be completed by year-end 2025 [6][8]. - Black Hills Corp. completed a public debt offering of $450 million in Q3 2025, with proceeds used to repay $300 million of notes due in January 2026 [13]. - The company maintained solid investment-grade credit ratings, with Moody's affirming a Baa2 rating and S&P Global affirming a BBB+ rating [13]. Merger and Acquisition - The merger with NorthWestern Energy is anticipated to close in the second half of 2026, pending regulatory approvals filed in October 2025 [9][10]. - Black Hills plans to file a registration statement on Form S-4 with the SEC to register shares of common stock to be issued to NorthWestern stockholders in connection with the pending merger transaction [45]. - The definitive joint proxy statement/prospectus will be sent to stockholders of both Black Hills and NorthWestern regarding the merger transaction [45]. - Investors are urged to read the registration statement and joint proxy statement/prospectus for important information about the pending merger transaction [46]. - Information about directors and executive officers of both companies will be included in the joint proxy statement/prospectus related to the merger [47]. - Additional information regarding the interests of participants in the merger will be included in the joint proxy statement/prospectus when available [47]. Revenue Breakdown - Electric Utilities' revenue for the three months ended September 30, 2025, was $249.7 million, compared to $232.5 million in 2024, marking a 7.0% increase [29]. - Gas Utilities' revenue for the three months ended September 30, 2025, was $184.4 million, up from $173.6 million in 2024, reflecting a 6.8% increase [29]. - Colorado Electric revenue increased to $79.6 million in Q3 2025, a 6.3% rise from $74.9 million in Q3 2024 [31]. - South Dakota Electric revenue rose to $90.6 million in Q3 2025, a 5.3% increase from $86.0 million in Q3 2024 [31]. - Total quantities sold for the nine months ended September 30, 2025, were 5,749.6 GWh, compared to 5,435.1 GWh in 2024, reflecting a growth of 5.8% [31]. - Total revenue from gas utilities for the nine months ended September 30, 2025, was $979.9 million, a 10.8% increase from $884.2 million in 2024 [34]. Dividends and Shareholder Returns - A quarterly dividend of $0.676 per share was approved, representing 55 consecutive years of increases, the second-longest track record in the industry [13]. Operational Highlights - Electric Utilities' operating income decreased by $2.7 million primarily due to milder weather and higher operating expenses [26]. - Gas Utilities' operating income increased by $9.9 million, driven by new rates and rider recovery [26]. - The availability of coal generating facilities decreased to 77.3% in Q3 2025 from 90.7% in Q3 2024 [32]. - Retail revenue from residential customers increased to $86.0 million in Q3 2025, up 12.9% from $76.2 million in Q3 2024 [34]. Future Outlook - The company reaffirms its 2025 adjusted earnings guidance in the range of $4.00 to $4.20 per share, excluding merger-related costs [8][14]. - The company plans to discuss its financial results in a conference call on November 6, 2025 [38]. - Black Hills Corp. serves 1.35 million natural gas and electric utility customers across eight states [40].

Core Insights - Black Hills Corp. reported a net income of $24.9 million for Q3 2025, slightly up from $24.4 million in Q3 2024, with diluted EPS of $0.34 compared to $0.35 in the previous year [1][2] - Adjusted EPS for Q3 2025 was $0.45, benefiting from new rates and rider recovery, despite higher financing and depreciation costs [1][3] - The company reaffirmed its 2025 adjusted earnings guidance in the range of $4.00 to $4.20 per share, excluding merger-related costs [5][11] Financial Performance - Year-to-date GAAP EPS increased to $2.58 from $2.52 in 2024, while adjusted EPS rose to $2.68 from $2.52, driven by new rates and favorable weather [2][11] - Total revenue for Q3 2025 was $430.2 million, up from $401.6 million in Q3 2024, with operating income of $78.7 million compared to $75.8 million [18][26] - Operating expenses increased to $351.5 million in Q3 2025 from $325.8 million in Q3 2024, primarily due to higher fuel and maintenance costs [18][26] Strategic Initiatives - The company is advancing a $4.7 billion five-year capital plan focused on safety, reliability, and growth, including the completion of the 260-mile Ready Wyoming transmission expansion project by year-end 2025 [4][5] - Black Hills Corp. is preparing to file a new electric rate review in South Dakota and has secured a settlement for natural gas rates in Nebraska [3][5] - The planned merger with NorthWestern Energy is expected to close in the second half of 2026, enhancing the company's scale and growth opportunities [6][7] Operational Highlights - The Ready Wyoming project is expected to enhance system resiliency and support local economic growth, while the Lange II generation project in South Dakota will replace aging infrastructure [4][9] - The company is negotiating with partners to expand its data center load pipeline to over 3 GW, driven by demand from Microsoft and Meta [5][6] - Electric Utilities' operating income decreased due to milder weather and higher operating expenses, while Gas Utilities' operating income increased due to new rates and rider recovery [23][25][27]