Core Viewpoint - MGE (MGEE) reported quarterly earnings of $1.14 per share, exceeding the Zacks Consensus Estimate of $0.98 per share, and showing an increase from $0.93 per share a year ago, indicating a 16.33% earnings surprise [1] Financial Performance - MGE's revenues for the quarter ended March 2025 were $218.97 million, surpassing the Zacks Consensus Estimate by 8.18%, compared to $191.34 million in the same quarter last year [2] - Over the last four quarters, MGE has exceeded consensus EPS estimates only once and has topped consensus revenue estimates two times [2] Stock Performance and Outlook - MGE shares have declined approximately 2.7% since the beginning of the year, while the S&P 500 has decreased by 4.7% [3] - The future performance of MGE's stock will largely depend on management's commentary during the earnings call and the revisions of earnings estimates [3][4] Earnings Estimates - The current consensus EPS estimate for the upcoming quarter is $0.78 on revenues of $156.63 million, and for the current fiscal year, it is $3.69 on revenues of $720.77 million [7] - The trend for estimate revisions prior to the earnings release was unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Utility - Electric Power industry is currently ranked in the top 20% of over 250 Zacks industries, suggesting that stocks in the top 50% of Zacks-ranked industries tend to outperform those in the bottom 50% by more than 2 to 1 [8]

Earnings Announcement - MGE Energy, Inc. announced its first quarter 2025 earnings on May 7, 2025[5] - The press release regarding the earnings is included as Exhibit 99.1 in the report[5] Financial Reporting - No financial statements of businesses acquired or pro forma financial information were reported[7] - The registrants are not emerging growth companies and have not elected to use the extended transition period for new financial accounting standards[4] Report Signing - The report was signed by Jenny L. Lagerwall, Assistant Vice President - Accounting and Controller[9]

PART I. FINANCIAL INFORMATION [Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements.) Presents MGE Energy and MGE's unaudited Q1 2025 consolidated financial statements, including income, cash flow, and balance sheets [MGE Energy, Inc. - Consolidated Statements of Income](index=6&type=section&id=MGE%20Energy%2C%20Inc.%20-%20Consolidated%20Statements%20of%20Income%20%28unaudited%29) MGE Energy, Inc. - Q1 2025 vs Q1 2024 Income Statement Highlights | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change | | :--- | :--- | :--- | :--- | | **Total Operating Revenues** | $218,970 | $191,336 | +14.4% | | **Operating Income** | $52,865 | $40,745 | +29.7% | | **Net Income** | $41,592 | $33,814 | +23.0% | | **Diluted EPS** | $1.14 | $0.93 | +22.6% | | **Dividends per share** | $0.450 | $0.428 | +5.1% | [MGE Energy, Inc. - Consolidated Statements of Cash Flows](index=7&type=section&id=MGE%20Energy%2C%20Inc.%20-%20Consolidated%20Statements%20of%20Cash%20Flows%20%28unaudited%29) MGE Energy, Inc. - Q1 2025 vs Q1 2024 Cash Flow Summary | Activity (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Cash Provided by Operating Activities** | $77,862 | $65,815 | | **Cash Used for Investing Activities** | ($50,592) | ($46,426) | | **Cash Used for Financing Activities** | ($15,107) | ($14,288) | | **Change in cash, cash equivalents, and restricted cash** | $12,163 | $5,101 | [MGE Energy, Inc. - Consolidated Balance Sheets](index=8&type=section&id=MGE%20Energy%2C%20Inc.%20-%20Consolidated%20Balance%20Sheets%20%28unaudited%29) MGE Energy, Inc. - Balance Sheet Highlights | Metric (in thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | $2,841,377 | $2,827,959 | | **Total Liabilities** | $820,000 | $834,124 | | **Total Common Shareholders' Equity** | $1,258,913 | $1,230,138 | | **Total Liabilities and Capitalization** | $2,841,377 | $2,827,959 | [Madison Gas and Electric Company - Consolidated Statements of Income](index=10&type=section&id=Madison%20Gas%20and%20Electric%20Company%20-%20Consolidated%20Statements%20of%20Income%20%28unaudited%29) MGE - Q1 2025 vs Q1 2024 Income Statement Highlights | Metric (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Total Operating Revenues** | $218,970 | $191,336 | | **Operating Income** | $53,162 | $41,159 | | **Net Income** | $39,803 | $32,200 | | **Net Income Attributable to MGE** | $34,204 | $26,603 | [Notes to Consolidated Financial Statements](index=14&type=section&id=MGE%20Energy%2C%20Inc.%2C%20and%20Madison%20Gas%20and%20Electric%20Company%20-%20Notes%20to%20Consolidated%20Financial%20Statements%20%28unaudited%29) - MGE Transco's equity earnings from its investment in American Transmission Company (ATC) were **$3.0 million** in Q1 2025, up from **$2.7 million** in Q1 2024. Dividends received from ATC also increased to **$3.3 million** from **$2.1 million** year-over-year[53](index=53&type=chunk) - MGE Energy's effective income tax rate was **13.1%** for Q1 2025, compared to **7.7%** for Q1 2024. The increase was primarily due to a smaller benefit from the amortization of excess deferred taxes related to the 2017 Tax Cut and Jobs Act[55](index=55&type=chunk) - In Q1 2025, MGE Energy issued approximately **35,774 shares** of common stock under its Direct Stock Purchase and Dividend Reinvestment Plan, raising net proceeds of about **$3.3 million**[61](index=61&type=chunk) - The EPA finalized new environmental rules in May 2024, including the Effluent Limitations Guidelines (ELG) and Greenhouse Gas (GHG) performance standards, which will impact coal-fired power plants. MGE is evaluating compliance options for its Elm Road Units and expects to meet requirements for other units through planned retirements and fuel switching[69](index=69&type=chunk)[71](index=71&type=chunk) Approved and Proposed Rate Changes | Period | Utility | Rate Increase | Authorized ROE | Effective Date | | :--- | :--- | :--- | :--- | :--- | | **2025** | Electric | 2.63% | 9.7% | 1/1/2025 | | **2025** | Gas | 1.32% | 9.7% | 1/1/2025 | | **2026 (Proposed)** | Electric | 4.89% | 10.0% | 1/1/2026 | | **2026 (Proposed)** | Gas | 2.33% | 10.0% | 1/1/2026 | | **2027 (Proposed)** | Electric | 4.33% | 10.0% | 1/1/2027 | | **2027 (Proposed)** | Gas | 2.16% | 10.0% | 1/1/2027 | Joint Plant Construction Project Ownership (as of March 31, 2025) | Project | Ownership Interest | Share of Generation | Estimated Costs (in millions) | Costs Incurred (in millions) | Est. Commercial Operation | | :--- | :--- | :--- | :--- | :--- | :--- | | **Paris** | 10% | 11 MW Battery | $25 million | $22.9 million | 2025 Battery | | **Darien** | 10% | 25 MW Solar/7.5 MW Battery | $63 million | $47.1 million | 2025 Solar / 2026 Battery | | **Koshkonong** | 10% | 30 MW Solar/16.5 MW Battery | $104 million | $20.0 million | 2026 Solar / 2027 Battery | | **High Noon** | 10% | 30 MW Solar/16.5 MW Battery | $99 million | $1.1 million | 2027 | MGE Energy Segment Net Income (Q1 2025 vs Q1 2024) | Segment (in thousands) | Q1 2025 Net Income (in thousands) | Q1 2024 Net Income (in thousands) | | :--- | :--- | :--- | | **Electric Utility** | $20,195 | $15,764 | | **Gas Utility** | $13,585 | $10,613 | | **Non-Regulated Energy** | $6,023 | $5,823 | | **Transmission Investment** | $2,314 | $1,996 | | **All Others** | ($525) | ($382) | | **Consolidated Total** | **$41,592** | **$33,814** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) MGE Energy's Q1 2025 net income rose from utility segment growth, driven by rate adjustments and weather, supporting renewable investments MGE Energy Net Income by Business Segment (in millions) | Business Segment | Q1 2025 (in millions) | Q1 2024 (in millions) | | :--- | :--- | :--- | | Electric Utility | $20.2 | $15.8 | | Gas Utility | $13.6 | $10.6 | | Nonregulated Energy | $6.0 | $5.8 | | Transmission Investments | $2.3 | $2.0 | | All Other | ($0.5) | ($0.4) | | **Total Net Income** | **$41.6** | **$33.8** | - Electric utility earnings increased due to higher investments included in the 2025 rate case and favorable weather that boosted residential sales[119](index=119&type=chunk) - Gas utility earnings increased due to a **19% rise** in gas retail sales, driven by a **13% increase** in heating degree days compared to Q1 2024[120](index=120&type=chunk) - MGE is advancing its goal of **80% carbon reduction by 2030** by transitioning coal plants (Columbia and Elm Road) to natural gas and investing in new renewable generation, including approximately **178 MW of solar** and **18 MW of wind projects**[130](index=130&type=chunk)[131](index=131&type=chunk) - The company is monitoring potential solar project cost increases and delays due to the Uyghur Forced Labor Protection Act (UFLPA) and new U.S. tariffs on solar cells and modules[132](index=132&type=chunk)[172](index=172&type=chunk)[174](index=174&type=chunk) MGE Energy Capitalization Ratios | Component | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Common shareholders' equity | 62.1% | 61.5% | | Long-term debt | 37.9% | 38.5% | | Short-term debt | 0.0% | 0.0% | [Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) No material changes were reported to the market risks disclosed in the 2024 Annual Report on Form 10-K - There were no material changes to the market risks disclosed in the 2024 Annual Report on Form 10-K[177](index=177&type=chunk) [Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded the company's disclosure controls were effective as of March 31, 2025, with no material changes to internal controls - As of March 31, 2025, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective[179](index=179&type=chunk) - No changes in internal controls over financial reporting occurred during the quarter ended March 31, 2025, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[180](index=180&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings.) The company is involved in ordinary course legal proceedings not expected to materially affect financial condition or operations - MGE Energy and its subsidiaries are involved in various legal proceedings handled in the ordinary course of business, which are not expected to be material[181](index=181&type=chunk) [Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors.) No material changes were reported from the risk factors disclosed in the 2024 Annual Report on Form 10-K - No material changes were reported from the risk factors disclosed in the 2024 Annual Report on Form 10-K[182](index=182&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) MGE Energy issued new common stock in Q1 2025 via its Direct Stock Purchase Plan, shifting to open market purchases from May 2025 - In Q1 2025, MGE Energy issued new common stock shares to participants in its Direct Stock Purchase and Dividend Reinvestment Plan. The company plans to switch to open market purchases for the plan starting in May 2025[183](index=183&type=chunk) [Defaults Upon Senior Securities](index=41&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities.) The company reports no defaults upon senior securities - None[184](index=184&type=chunk) [Mine Safety Disclosures](index=41&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This item is not applicable to MGE Energy and MGE - Not applicable[185](index=185&type=chunk) [Other Information](index=41&type=section&id=Item%205.%20Other%20Information.) No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during Q1 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during Q1 2025[186](index=186&type=chunk) [Exhibits](index=42&type=section&id=Item%206.%20Exhibits.) This section lists exhibits filed with the Form 10-Q, including CEO/CFO certifications and XBRL data files - The report includes required certifications from the CEO and CFO under Sarbanes-Oxley Act rules, as well as XBRL data files[187](index=187&type=chunk)

MGE (MGEE) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended March 2025. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The earnings report might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may mov ...

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Core Viewpoint - MGE's quarterly earnings of $0.61 per share fell short of the Zacks Consensus Estimate of $0.84 per share, marking a -27.38% earnings surprise, despite an increase from $0.55 per share a year ago [1][2] Financial Performance - MGE reported revenues of $171.42 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 2.71%, compared to $164.65 million in the same quarter last year [2] - Over the last four quarters, MGE has not surpassed consensus EPS estimates and has only topped revenue estimates once [2] Stock Performance - MGE shares have declined approximately 1% since the beginning of the year, while the S&P 500 has gained 1.7% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.96 on revenues of $198.17 million, and for the current fiscal year, it is $3.84 on revenues of $707.88 million [7] - The trend of estimate revisions for MGE is mixed, which could change following the recent earnings report [6] Industry Context - The Utility - Electric Power industry is currently in the top 50% of over 250 Zacks industries, suggesting that stocks in this category tend to outperform those in the bottom 50% by more than 2 to 1 [8]

Financial Performance - MGE Energy's GAAP earnings for the full year of 2024 were $120.6 million, or $3.33 per share, representing an increase from $117.7 million, or $3.25 per share, in 2023[1] - For Q4 2024, MGE Energy reported earnings of $22.0 million, or 61 cents per share, up from $20.1 million, or 55 cents per share, in Q4 2023[2] - Operating revenues for the full year of 2024 were $676.9 million, a decrease from $690.4 million in 2023[6] - Operating income for the full year of 2024 was $146.3 million, slightly down from $146.4 million in 2023[6] - The weighted average shares outstanding for basic earnings per share in 2024 were 36,210 thousand, compared to 36,163 thousand in 2023[6] Customer Base - MGE Energy serves 167,000 electricity customers and 178,000 natural gas customers in Wisconsin[7] Renewable Energy Initiatives - MGE Energy completed the Paris solar project in December 2024, contributing to its renewable generation investments[2] - The company continues to focus on cost-effective renewable generation to support asset growth and increase electric earnings[2] Market Conditions - Gas retail therm deliveries decreased approximately 4% in 2024 compared to the prior year, primarily due to warmer-than-normal weather[3] Forward-Looking Statements - MGE Energy cautions that forward-looking statements are based on current expectations and are subject to risks and uncertainties[8]

Electric Operations and Revenue - MGE Energy's electric operations accounted for approximately 74%, 71%, and 65% of total regulated revenues in 2024, 2023, and 2022 respectively[27]. - As of December 31, 2024, MGE supplied electric service to approximately 167,000 customers, with 91% located in urban areas[26]. - MGE's electric operations include regulated electric and gas utility operations, as well as nonregulated energy operations[26]. - Gas operations accounted for approximately 26%, 29%, and 35% of MGE's total regulated revenues in 2024, 2023, and 2022, respectively[49]. - No single customer accounted for more than 10% of total operating revenues for MGE Energy and MGE in 2024[281]. Carbon Reduction and Renewable Energy Goals - MGE aims for a net-zero carbon electricity target by 2050 and has committed to achieving at least 80% carbon reductions by 2030 from 2005 levels[36]. - MGE's carbon reduction goals align with the recommendations of the Intergovernmental Panel on Climate Change (IPCC)[37]. - MGE plans to eliminate coal as an owned generation source by the end of 2032, reducing approximately two-thirds of its current coal-fired generation capacity by 2030[39]. - MGE is working to increase renewable energy to 25% of retail electric sales by 2025 and to 30% by 2030[72]. - MGE currently exceeds Wisconsin's renewable energy requirement of approximately 8%[81]. Transition from Coal and Natural Gas - The company is transitioning away from coal and adding new renewable generation to meet its carbon reduction goals[38]. - MGE plans to retire the Columbia unit by the end of 2029 and transition the Elm Road Units from coal to natural gas by the end of 2032[72]. - MGE purchased 25 MW in the West Riverside Energy Center in early 2023 and an additional 25 MW in June 2024, as part of its investment in natural gas plants[45]. Renewable Energy Projects and Initiatives - Since 2015, MGE has added 222 MW of solar and 93 MW of wind generation facilities, with an expectation to add approximately 178 MW of solar, 18 MW of wind, and 118 MW of battery storage by the end of 2028[40]. - MGE has developed approximately 42 MW of solar generation under the Renewable Energy Rider (RER) program, partnering with large energy users[43]. - The Shared Solar Program allows residential and small business customers to use locally generated solar energy for up to half of their annual energy needs, with a total capacity of 4 MW from two solar facilities[44]. - MGE's 19% share in the Columbia Energy Storage project will be 3 MW, which is set to be the first of its kind in the United States if approved[41]. Emission Reduction and Environmental Compliance - MGE aims to achieve net-zero methane emissions from its natural gas distribution system by 2035, introducing a renewable natural gas program in May 2024[51]. - The EPA finalized a rule to lower the average annual PM2.5 NAAQS from 12 ug/m3 to 9 ug/m3, effective May 2024, which may impact Milwaukee County[67]. - The EPA's final performance standards under section 111(b) of the Clean Air Act for carbon dioxide emissions will require states to submit plans for existing natural gas-fired combustion turbines within two years[74]. Workforce and Safety - As of December 31, 2024, MGE Energy had 717 employees, with women and ethnic minorities representing 25% and 10% of the workforce, respectively[82]. - MGE has implemented a comprehensive safety culture involving employees at all levels to enhance workplace safety[87]. Financial Management and Risk - MGE manages market risks associated with interest rates, commodity prices, and equity returns through risk management policies and derivative instruments[270]. - MGE expects to recover $72.3 million in fuel and purchased power costs in 2025, subject to PSCW fuel rules[272]. - As of December 31, 2024, the fair value of exchange-traded derivatives and financial transmission rights (FTRs) exceeded the cost basis by $0.1 million[275]. - A 1% reduction in the expected rate of return on pension plan assets would increase annual pension costs by approximately $4.4 million before taxes[277]. - The value of employee benefit plans trusts' assets increased by approximately 11% in 2024 and 15% in 2023[277]. - MGE manages credit risk through established credit policies, including credit approval processes and counterparty limits[278]. - MGE's cash and cash equivalents are placed with high credit-quality financial institutions to mitigate credit risk[282]. - MGE employs physical contracts and financial derivative contracts to reduce price risk from market fluctuations[274]. - Assuming a 1% change in average interest rates, 2024 interest expense and net income would have increased/decreased by $0.4 million for both MGE Energy and MGE[276].

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分组1 - MGE reported quarterly earnings of $1.13 per share, missing the Zacks Consensus Estimate of $1.17 per share, but showing an increase from $1.05 per share a year ago, resulting in an earnings surprise of -3.42% [1] - The company posted revenues of $168.48 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 2.85%, compared to year-ago revenues of $160.53 million [2] - MGE shares have increased approximately 25.6% since the beginning of the year, outperforming the S&P 500's gain of 21.2% [3] 分组2 - The current consensus EPS estimate for the coming quarter is $0.64 on revenues of $167.94 million, and for the current fiscal year, it is $3.69 on revenues of $674.38 million [7] - The Zacks Industry Rank for Utility - Electric Power is currently in the top 39% of over 250 Zacks industries, indicating a favorable outlook for the industry [8] 分组3 - The estimate revisions trend for MGE is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, suggesting it is expected to perform in line with the market in the near future [6] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]