IDACORP, Inc.’s (IDA) long-term investments should fortify infrastructure and add more clean energy generation assets to its portfolio. Consistent customer growth should increase the demand for IDA’s services, bolstering its financial performance.However, this Zacks Rank #3 (Hold) company has to face risks related to strict licensing processes and weather fluctuations.Factors Acting in Favor of IDAIDACORP’s regulated electric operations in Idaho generate a relatively stable and growing income stream. The co ...

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Financial Data and Key Metrics Changes - IDACORP's diluted earnings per share increased to $5.50 compared to $5.14 in the previous year, marking a growth of approximately 7% [7] - The company recorded an additional tax credit amortization of $29.8 million for 2024, compared to no such amortization in 2023 [8] - Net income increased by $28 million compared to 2023, primarily due to higher net income at Idaho Power from a January rate increase and customer growth [32] Business Line Data and Key Metrics Changes - Customer growth for Idaho Power was strong, with nearly 650,000 customers served at the end of 2024, reflecting a 2.6% increase [12] - Total other O&M expenses rose by $61.1 million, driven by increased pension-related expenses and wildfire mitigation costs [34] - Depreciation expense increased by $28.1 million due to ongoing system investments [36] Market Data and Key Metrics Changes - Moody's GDP forecast for the Idaho Power service area predicts growth of 4.5% in 2025 and 3.7% in 2026, indicating a robust local economy [12] - The Idaho labor force surpassed 1 million workers for the first time in December 2024, showing strong economic activity [13] Company Strategy and Development Direction - The company plans to file another general rate case in Idaho in 2025 to collect necessary revenue for operations and ensure a reasonable rate of return [19] - IDACORP is focusing on infrastructure development to support large load customers, including ongoing projects with Meta and Micron [14][16] - The company aims to maintain affordability for customers while managing significant capital expenditures, with a forecasted average annual CapEx of $1.1 billion from 2025 to 2029 [41][48] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining earnings growth and quality, citing strong customer growth and regulatory support [31][53] - The company anticipates a potential load growth of 8.3% annually, driven by large load projects and infrastructure needs [21] - Management highlighted the importance of regulatory mechanisms to reduce lag and improve credit metrics [72] Other Important Information - The company appointed Scott Madison to the Board of Directors, bringing extensive experience in business strategy and finance [27] - Current snowpack conditions are favorable, exceeding 120% of average, which is expected to positively impact hydropower operations [28] Q&A Session Summary Question: Discussion on replenishing the ADITC mechanism - Management indicated that the process could involve including it in a general rate case request or a separate filing [65] Question: Credit metrics and conversations with rating agencies - IDACORP ended 2024 with approximately 18% cash flow preworking capital over debt, with expectations of a slight reduction in 2025 due to financing needs [68][70] Question: Opportunities for shifting to a period-end rate base framework - Management stated that all options are being explored, including the potential for a period-end rate base in future filings [77][78] Question: Incremental load growth and data center activity - Management noted strong interest from various industries, including data centers, agriculture, and manufacturing, contributing to load growth [82][85] Question: Impact of executive orders from Washington on generation mix - Management is monitoring executive orders and their potential impact on permitting and generation mix, but no immediate changes are anticipated [90][92] Question: Characterization of fourth quarter weather - The fourth quarter experienced a mix of warm and cold weather, with snow occurring unexpectedly after Thanksgiving [98] Question: Customer growth sources - Customer growth is primarily driven by large commercial and industrial customers, with modest contributions from residential in-migration [104][105] Question: Property tax refunds from litigation - The property tax refunds were related to a three-year historic period, with a pretax number of around $10 million recorded in 2024 [107]

Earnings Conference Call 4th Quarter & Year-End 2024 February 20, 2025 Forward-Looking Statements This presentation (and oral statements relating to this presentation) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements, other than statements of historical facts, that express or involve discussions of expectations, beliefs, plans, objectives, outlooks, assumptions, or future events or performance are forward-looking. Forward-looking ...

Core Viewpoint - IDACORP, Inc. reported strong financial performance for the fourth quarter and full year of 2024, with earnings per share exceeding estimates and overall revenue growth driven by customer growth and favorable weather conditions [1][2][3]. Financial Performance - Fourth-quarter 2024 earnings were 70 cents per share, surpassing the Zacks Consensus Estimate of 63 cents by 11.1%, compared to 61 cents per share in the same quarter last year [1]. - Full-year 2024 earnings reached $5.50 per share, an increase from $5.14 per share in the previous year, benefiting from strong customer growth and favorable weather [2]. - Total revenues for 2024 were $1.82 billion, reflecting a 3.4% increase from $1.76 billion in 2023 [3]. Operational Highlights - Customer growth in service areas increased by 2.6% year over year for the 12 months ending December 31, 2024, contributing to a $1.9 million boost in operating income [4]. - Net income increased by $6.6 million from the prior year, primarily due to higher net income at Idaho Power [5]. - The company added 7.2 MWh of hydropower to its generation portfolio in 2024 [5]. Financial Position - As of December 31, 2024, cash and cash equivalents were $368.9 million, up from $327.4 million a year earlier [6]. - Long-term debt increased to $3.05 billion from $2.78 billion as of December 31, 2023 [6]. - Net cash provided by operating activities was $594.4 million, compared to $267 million in the previous year [6]. Guidance and Projections - IDACORP initiated its full-year 2025 earnings guidance of $5.65-$5.85 per share, with the Zacks Consensus Estimate at $5.85 per share [7]. - Projected capital expenditures for 2025 are expected to be between $1 billion and $1.1 billion [7]. - The company anticipates O&M expenses to range from $465 million to $475 million and plans to add hydropower in the range of 6.5-8.5 MWh in 2025 [7].

Financial Performance - IDACORP reported Q4 2024 net income of $37.9 million, or $0.70 per diluted share, up from $31.3 million, or $0.61 per diluted share in Q4 2023, representing a 21% increase in net income[1][4] - For the full year 2024, IDACORP's net income was $289.2 million, or $5.50 per diluted share, compared to $261.2 million, or $5.14 per diluted share in 2023, marking an increase of 11%[1][4] - IDACORP anticipates 2025 earnings guidance in the range of $5.65 to $5.85 per diluted share, assuming normal weather conditions and power supply expenses[3][23] Revenue and Customer Growth - Retail revenues per megawatt-hour (MWh) increased by $52.7 million in 2024, primarily due to higher Idaho base rates effective January 1, 2024[14] - Customer growth of 2.6% contributed an additional $19.0 million to operating income in 2024, while usage per retail customer added $4.5 million[15] Capital Expenditures and Investments - Capital expenditures for Idaho Power are projected to be between $1,000 million and $1,100 million in 2025, up from $943 million in 2024[23] - The company plans to utilize $60 to $77 million in additional tax credits under the Idaho regulatory mechanism in 2025[3][23] Operating Expenses - Other operations and maintenance (O&M) expenses increased by $61.1 million in 2024, driven by pension-related expenses and wildfire mitigation costs[17] - Depreciation expense rose by $28.1 million in 2024 due to an increase in plant-in-service[18] - Non-operating expenses increased by $2.2 million in 2024, primarily due to higher interest expenses on long-term debt[20] Risks and Challenges - IDACORP and Idaho Power's forward-looking statements include expectations regarding future financial performance, power generation, and capital expenditures[27] - The company anticipates potential impacts from regulatory decisions by the Idaho and Oregon public utilities commissions and the Federal Energy Regulatory Commission on cost recovery and return on investment[27] - Risks associated with capital expenditures and utility infrastructure projects may affect Idaho Power's ability to serve customers and generate revenues[27] - Economic conditions, including inflation and interest rates, could impact operations, capital investments, and customer demand for electricity[27] - The company faces challenges related to workforce factors, including attracting and retaining skilled workers and managing labor costs[27] - Changes in laws and regulations may result in increased compliance costs and impact recovery of costs through rates[27] - Abnormal weather conditions and natural disasters could affect customer sales and hydropower generation[27] Strategic Focus - The company is focused on the transition from coal-fired operations to natural gas, which may involve remediation costs[28] - IDACORP aims to maintain dividend payments and achieve target payout ratios based on financial performance and capital requirements[28] - The emergence of new energy and transmission markets in the western United States may alter market dynamics affecting the company[28]

Financial Performance - Idaho Power's net income for the last quarter was reported at $45 million, reflecting a 12% increase compared to the same period last year[20]. - Total retail revenues for Idaho Power in 2024 reached $1,552.78 million, an increase of 5.4% from $1,472.67 million in 2023[42]. - Idaho Power's total electric utility operating revenues for 2024 were $1,822.97 million, compared to $1,762.89 million in 2023, reflecting a year-over-year growth of 3.4%[42]. - Retail energy sales in 2024 totaled 15,971 thousand MWh, up from 15,515 thousand MWh in 2023, indicating a growth of 2.9%[42]. - Idaho Power's wholesale energy sales increased significantly to 1,412 thousand MWh in 2024, compared to 840 thousand MWh in 2023, marking a growth of 67.6%[42]. - Idaho Power's irrigation revenue for 2024 was $196.40 million, up from $173.93 million in 2023, indicating a growth of 12.8%[42]. Capital Expenditures and Investments - Idaho Power's projected capital expenditures for 2024 are estimated to be approximately $300 million, focusing on infrastructure improvements and renewable energy projects[20]. - The company plans to invest $50 million in the development of energy storage technologies over the next three years[20]. - Idaho Power plans to own a 300 MW wind turbine generator power plant in Wyoming, with a planned in-service date in 2027[48]. - Idaho Power's environmental compliance expenditures are projected to be $57 million in 2025 and $143 million for 2026-2027[87]. - The company is planning to convert coal-fired operations to natural gas, which involves remediation costs[21]. Renewable Energy and Sustainability - Idaho Power anticipates a 10% growth in renewable energy generation capacity by 2025, aligning with state regulatory goals[20]. - The company is committed to transitioning away from coal-fired operations, with plans to convert existing plants to natural gas by 2026[20]. - Idaho Power plans to achieve a targeted 88% reduction in annual CO2 emissions by 2030 compared to the 2005 baseline year[82]. - Idaho Power aims to achieve 100% clean energy by 2045, with short-term and medium-term goals for CO2 emission reductions, subject to various risks and uncertainties[153]. - The preferred resource portfolio in the 2023 IRP includes 8,436 MW of resource capacity, with significant additions of 3,325 MW of solar and 1,800 MW of wind over the next 20 years[74]. Customer Demand and Load - The company reported a 5% increase in customer load demand year-over-year, driven by new industrial and commercial customers[20]. - Idaho Power's highest all-time system peak demand reached 3,793 MW on July 22, 2024, and the winter peak demand was 2,719 MW on January 16, 2024[50]. - Idaho Power's average monthly usage per residential customer has declined from 1,032 kWh in 2012 to 914 kWh in 2024, indicating a long-term decrease in usage per customer[115]. - The company has experienced a net growth in customer numbers, but there is no guarantee that this growth will continue at the current rate[115]. Regulatory and Compliance Challenges - The company is facing regulatory challenges that could impact its cost recovery mechanisms, particularly in Idaho and Oregon[20]. - Idaho Power's regulatory cost recovery mechanisms may not function as intended, potentially affecting financial condition and results of operations[112]. - Regulatory approvals are necessary for Idaho Power to borrow money or issue securities, making it dependent on favorable orders from public utility commissions[161]. - Changes in legislation and regulation may materially impact IDACORP and Idaho Power's business, including potential changes in tax policy and environmental regulations[148]. Operational Risks and Challenges - The company is exposed to risks from natural disasters and severe weather, which can affect power generation and service interruptions[20]. - Changes in weather conditions and climate change can significantly affect Idaho Power's operating results, with demand peaking during hot summer months and cold winter months[118]. - Idaho Power's operations are vulnerable to cyber and physical security attacks, which could disrupt its ability to generate, purchase, or transmit power[127]. - The company faces potential liabilities from wildfires, which could adversely impact its financial condition and results of operations[124]. - Factors such as labor shortages, supply chain disruptions, and environmental regulations could impact the ability to meet energy demands and increase operational costs[136]. Strategic Initiatives - Idaho Power's strategy focuses on enhancing financial strength and improving its core business, emphasizing reliable and affordable clean energy[36]. - The company is committed to balancing the interests of shareholders, customers, employees, and other stakeholders in its operations[36]. - Idaho Power is actively pursuing FERC relicensing for its largest hydropower generation source, the HCC, and its second largest, American Falls[55]. - The company is exploring potential acquisitions to expand its service area and customer base, with a focus on renewable energy assets[20]. Employee and Human Capital Management - As of December 31, 2024, IDACORP had 2,130 full-time employees, with 48% having worked at the company for over 10 years[91]. - Idaho Power's human capital management programs focus on attracting and retaining high-quality employees, with regular engagement surveys conducted[90]. - Idaho Power's compensation and benefits include a 401k plan with company matching contributions and a defined benefit pension plan that vests after five years[94]. Financial Risks - Financial risks include the ability to meet financial obligations and mitigate exposure to market risks, including liquidity and interest rate risks[159]. - A downgrade in credit ratings could limit access to capital and increase borrowing costs, potentially requiring collateral with transaction counterparties[162]. - The unavailability of expected tax credits or benefits could adversely impact the economic viability of planned or existing facilities[150]. - Idaho Power's pension and postretirement benefit plan costs are affected by investment performance, with rising health care costs posing additional financial challenges[166].

Core Viewpoint - IdaCorp (IDA) has experienced a significant downtrend with a 7.3% decline over the past four weeks, but it is now in oversold territory, suggesting a potential turnaround due to analysts' positive earnings outlook [1][3]. Group 1: Stock Performance and Analyst Sentiment - The stock has faced excessive selling pressure, leading to a decline of 7.3% in the last month [1]. - Analysts have raised earnings estimates for IDA, resulting in a 0.1% increase in the consensus EPS estimate over the past 30 days, indicating a potential for price appreciation [3]. - IDA holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a turnaround [3]. Group 2: Technical Indicators - The Relative Strength Index (RSI) is utilized to identify oversold conditions, with a reading below 30 typically indicating that a stock is oversold [4]. - IDA's current RSI reading is 28.8, suggesting that the heavy selling may be exhausting itself and a trend reversal could be imminent [5].

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Core Insights - The U.S. electric power sector is transitioning towards cleaner energy sources, with companies aiming for 100% clean energy and zero emissions in the coming years, supported by government tax credits and a goal of carbon neutrality by 2050 [2] - IDACORP and Pinnacle West Capital Corporation are compared for investment potential, with IDACORP having a market capitalization of $5.88 billion and Pinnacle West at $9.73 billion [4] - IDACORP's 2024 earnings estimate is $5.42 per share on revenues of $1.85 billion, reflecting a 5.5% increase in earnings and a 4.5% increase in revenue year-over-year, while Pinnacle West's estimates are $5.14 per share on revenues of $5.05 billion, indicating a 16.6% increase in earnings and a 7.6% increase in revenue [5] - Over the past six months, IDACORP's shares have risen by 19.9%, outperforming the industry growth of 7.2%, while Pinnacle West's shares increased by 13.3% [6] Industry Factors - Utilities benefit from favorable factors such as new electric rates, customer additions, cost management, and energy-efficiency programs, alongside investments to enhance electric infrastructure resilience against extreme weather [7] - The Federal Reserve's reduction of the fund rate by 1 percentage point since September 2024 is expected to benefit capital-intensive utilities by lowering capital servicing costs, thus improving margins and profitability [8] - The U.S. Energy Information Administration projects that renewable energy will account for 23% of electricity generation in 2024 and 25% in 2025, with a 2% increase in electricity sales expected this winter compared to last year [9] Company Financials - IDACORP has a debt-to-capital ratio of 48.8%, while Pinnacle West's ratio is 59%, both below the industry average of 61.32% [12] - The times interest earned (TIE) ratio for IDACORP is 2.9 and for Pinnacle West is 2.8, indicating sufficient financial flexibility to meet near-term interest obligations [15] - IDACORP's current ratio is 1.71, significantly better than the industry average of 0.77, while Pinnacle West's current ratio is 0.71, suggesting IDACORP has better short-term asset management [16] Dividend Information - IDACORP's dividend yield is 3.12%, and Pinnacle West's is 4.18%, both exceeding the S&P 500 composite average of 1.19% [17] Investment Recommendation - Both IDACORP and Pinnacle West Capital are positioned as wise investments, but IDACORP is favored due to better debt management, TIE ratio, liquidity, and price performance [18]