Group 1 - WEC Energy Group, Inc. plans to offer $700 million in convertible senior notes due 2028 in a private offering to qualified institutional buyers [1][2] - The company may grant initial purchasers an option to buy an additional $105 million in convertible notes within 13 days of the initial issuance [1] - The final terms of the convertible notes, including conversion price and interest rate, will be determined at the time of pricing [2] Group 2 - The convertible notes will be senior, unsecured obligations, with interest paid semiannually and maturity on June 1, 2028 [2] - Holders can convert their notes under specific conditions before March 1, 2028, and at any time thereafter until two trading days before maturity [3] - Upon conversion, WEC Energy Group will pay cash for the principal amount and may pay or deliver cash, shares, or a combination for any excess [3] Group 3 - The net proceeds from the offering will be used for general corporate purposes, including repayment of short-term debt [4] - WEC Energy Group serves 4.7 million customers across Wisconsin, Illinois, Michigan, and Minnesota [6] - The company's principal utilities include We Energies, Wisconsin Public Service, and others, with a subsidiary focused on renewable generation facilities [7]

Core Viewpoint - WEC Energy Group (WEC) has shown a downtrend recently, losing 6.7% over the past week, but a hammer chart pattern suggests a potential trend reversal as buying interest may be emerging [1][2]. Technical Analysis - The hammer chart pattern indicates a possible bottoming out, suggesting that selling pressure may be subsiding [2][5]. - This pattern forms when there is a small candle body with a long lower wick, indicating that despite a new low, buying interest has emerged to push the stock price up towards the opening price [4][5]. - Hammer candles can appear on various timeframes and are utilized by both short-term and long-term investors [5]. Fundamental Analysis - There has been a positive trend in earnings estimate revisions for WEC, which is a bullish indicator as it typically leads to price appreciation [7]. - The consensus EPS estimate for the current year has remained unchanged over the last 30 days, indicating strong agreement among analysts regarding WEC's potential for better earnings [8]. - WEC currently holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which historically outperform the market [9].

Core Insights - Zacks Premium provides various tools for investors to enhance their stock market strategies, including daily updates on Zacks Rank and Industry Rank, Equity Research reports, and Premium stock screens [1] - The Zacks Style Scores are designed to help investors identify stocks with the highest potential to outperform the market within a 30-day timeframe, using a grading system from A to F based on value, growth, and momentum characteristics [2] Zacks Style Scores Breakdown - **Value Score**: Focuses on identifying undervalued stocks by analyzing ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow to highlight attractive investment opportunities [3] - **Growth Score**: Evaluates a company's financial health and future outlook by examining projected and historical earnings, sales, and cash flow to find stocks with sustainable growth potential [4] - **Momentum Score**: Targets stocks with upward or downward price trends, utilizing metrics like one-week price changes and monthly earnings estimate changes to identify optimal buying opportunities [5] - **VGM Score**: Combines Value, Growth, and Momentum Scores to provide a comprehensive indicator for investors seeking to balance multiple investment strategies [6] Zacks Rank and Style Scores Interaction - The Zacks Rank is a proprietary model that leverages earnings estimate revisions to assist investors in building successful portfolios, with 1 (Strong Buy) stocks achieving an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [7][8] - To maximize returns, investors are encouraged to select stocks with a Zacks Rank of 1 or 2 that also possess Style Scores of A or B, ensuring a higher probability of success [9] - Stocks rated 4 (Sell) or 5 (Strong Sell) should be avoided, even if they have high Style Scores, due to their declining earnings forecasts [10] Company Spotlight: WEC Energy Group - WEC Energy Group is a diversified holding company involved in electricity generation and distribution across Wisconsin and Michigan, currently holding a Zacks Rank of 2 (Buy) with a VGM Score of B [11] - The company is particularly appealing to growth investors, with a Growth Style Score of B and a projected year-over-year earnings growth of 8.5% for the current fiscal year, alongside a recent upward revision in earnings estimates [12]

Core Viewpoint - WEC Energy Group reported a strong year in customer satisfaction, financial performance, and execution of its capital plan, emphasizing its commitment to providing affordable, reliable, and clean energy to millions of customers across the Midwest [1]. Company Highlights - The company serves 4.7 million customers across Wisconsin, Illinois, Michigan, and Minnesota [4]. - WEC Energy Group has approximately 33,000 stockholders, 7,000 employees, and over $48 billion in assets [6]. - The company operates principal utilities including We Energies, Wisconsin Public Service, Peoples Gas, North Shore Gas, Michigan Gas Utilities, Minnesota Energy Resources, and Upper Michigan Energy Resources [5]. Financial Performance - A record $1.06 billion was returned to stockholders through dividends [7]. - The dividend level was increased by 6.9% to an annual rate of $3.57 per share, marking the 22nd consecutive year of higher dividends [7]. - The company was selected for inclusion in the High Yield Dividend Aristocrats Index by Standard and Poor's [7]. Capital Plan and Projects - The largest five-year capital plan in company history was developed, focusing on energy reliability and economic growth [7]. - Two large-scale solar projects, the Paris Solar Energy Center and Darien Solar Energy Center, were added, contributing renewable energy to the Wisconsin power grid [7]. - The company retired coal-fueled capacity at the Oak Creek Power Plant, which had been in service since the 1950s [7]. Customer Satisfaction - WEC Energy Group ranked number one in the nation for customer satisfaction in an independent survey of large commercial and industrial energy users [7]. - Wisconsin Public Service was recognized as one of the top-performing midsize utilities in PA Consulting's 2024 ReliabilityOne® Awards [7]. Stockholder Actions - Stockholders elected directors to terms expiring at the 2026 annual meeting [3]. - Proposed amendments to eliminate supermajority voting requirements and an advisory proposal for a simple majority vote did not receive the required stockholder approval [3][4].

Financial Data and Key Metrics Changes - The company reported first quarter 2025 earnings of $2.27 per share, indicating a solid start to the year [21] - The earnings guidance for 2025 is projected to be in the range of $5.17 to $5.27 per share, assuming normal weather conditions [22] - The Board of Directors raised the dividend by 6.9%, marking the 22nd consecutive year of dividend increases [18] Business Line Data and Key Metrics Changes - The company is focused on a balanced power generation mix, with plans to add 4,300 megawatts of renewable generation over the next five years, requiring an investment of $9.1 billion [24] - Significant investments are planned in natural gas generation and liquefied natural gas storage to enhance reliability [24][26] Market Data and Key Metrics Changes - Economic development opportunities are expected to drive significant growth in electricity demand, with major investments from companies like Microsoft and Eli Lilly in the region [22][23] - The company anticipates a compound annual growth rate in earnings of 6.5% to 7% [25] Company Strategy and Development Direction - The company announced a $28 billion investment plan, the largest in its history, aimed at supporting safety, reliability, and growth [23] - The capital plan includes projects for renewable energy, natural gas generation, and strengthening the distribution network [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to execute the capital plan and highlighted the bright future and significant investment opportunities ahead [27] - The company is focused on maintaining reliability while integrating a mix of energy sources to meet growing capacity needs [30][34] Other Important Information - The proposals to amend the articles of incorporation and bylaws to eliminate supermajority voting did not pass, while the advisory vote on executive compensation was approved [16] Q&A Session Summary Question: Will there be less demand for renewable energy during the Trump years? - Management indicated that a mix of energy sources, including renewables, is necessary to meet growing electricity demand, and customers are benefiting from fuel savings due to renewables [29][31] Question: Why not invest in reliable power sources like nuclear instead of renewables? - Management emphasized the need for a mix of energy sources and noted that nuclear is a long-term option that requires significant time to develop [32][34] Question: Can you comment on the current regulatory environment in Illinois and the Chicago pipeline replacement program? - Management reported receiving clarity on the need to replace approximately 1,100 miles of old pipeline and is ramping up efforts to execute the replacement program efficiently [35][37]

Company Performance - WEC Energy Group reported first-quarter 2025 earnings of $2.27 per share, exceeding the Zacks Consensus Estimate of $2.19 by 3.7% and increasing 15.2% from $1.97 in the same quarter last year [1] - Operating revenues reached $3.15 billion, surpassing the Zacks Consensus Estimate of $2.82 billion by approximately 11.9% and increasing 17.5% from $2.68 billion in the year-ago quarter [1] Revenue and Consumption - Electricity consumption by small commercial and industrial customers rose by 2.1% in the first quarter, while large commercial and industrial customers, excluding the iron ore mine, saw a 1.1% increase year over year [2] - Total electric sales volume for the quarter was 10,628.8 thousand megawatt-hours, reflecting a 1.1% year-over-year increase [2] Expenses and Financials - Total operating expenses amounted to $2.21 billion, up 18.2% from $1.87 billion in the previous year, driven by higher cost of sales and increased operational and maintenance expenses [3] - Operating income was $937.5 million, a 15.2% increase from $813.4 million in the year-ago quarter [3] - Interest expense was $223 million, up 16.1% from $192 million in the prior year [3] Financial Position - As of March 31, 2025, WEC had cash and cash equivalents of $82.2 million, significantly up from $9.8 million as of December 31, 2024 [4] - Long-term debt decreased to $16.2 billion from $17.2 billion as of December 31, 2024 [4] - Net cash provided by operating activities during the first three months of 2025 was $1.16 billion, compared to $0.86 billion in the same period last year [4] Guidance - WEC reaffirmed its 2025 earnings projection in the range of $5.17-$5.27 per share, with the Zacks Consensus Estimate at $5.24 per share, higher than the midpoint of the company's guidance [5] - The company plans to invest $28 billion during the 2025-2029 period [5] Zacks Rank - WEC currently holds a Zacks Rank 2 (Buy) [6]

Financial Performance - In Q1 2025, net income attributed to common shareholders increased by $101.9 million to $724.2 million compared to Q1 2024, with diluted EPS rising to $2.27 from $1.97[232] - The Wisconsin segment's net income attributed to common shareholders was $359.9 million in Q1 2025, a 35.1% increase from $266.4 million in Q1 2024, driven by higher margins from rate orders and retail sales volumes[239] - Operating revenues for Q1 2025 increased to $788.3 million, up $122.3 million or 18.4% from $666.0 million in Q1 2024[254] - Net income attributed to common shareholders decreased to $178.1 million, down $9.4 million or 5.0% from $187.5 million in Q1 2024[254] - The Illinois segment's net income attributed to common shareholders was $178.1 million in Q1 2025, a 5.0% decrease from $187.5 million in Q1 2024, attributed to higher operating expenses[252] - The other states segment's net income attributed to common shareholders was $43.1 million, representing an increase of $4.5 million or 11.7% over Q1 2024[260] Revenue and Sales Volumes - Operating revenues for the Wisconsin segment increased by $281.1 million, reaching $2,059.9 million in Q1 2025 compared to $1,778.8 million in Q1 2024[240] - Electric sales volumes increased by 180.7 MWh (in thousands), totaling 8,868.5 MWh in Q1 2025, compared to 8,687.8 MWh in Q1 2024[241] - Natural gas sales volumes rose by 175.2 therms (in millions), reaching 1,309.0 therms in Q1 2025, compared to 1,133.8 therms in Q1 2024[241] - Natural gas sales volumes increased to 889.8 million therms, up 108.0 million therms or 13.8% from 781.8 million therms in Q1 2024[254] Capital Expenditures and Investments - The company plans to invest approximately $9.1 billion in regulated renewable energy from 2025 to 2029, including 2,900 MWs of utility-scale solar, 900 MWs of wind, and 565 MWs of battery storage[212] - Capital expenditures totaled $701.1 million in Q1 2025, an increase of $256.6 million compared to Q1 2024, primarily due to renewable energy projects[290] - Estimated capital expenditures for 2025 are projected at $5,138.1 million, with a total of $5,402.5 million expected for 2027[298] - The company plans to invest approximately $542 million in the Paris solar project, which includes 180 MWs of solar generation and 99 MWs of battery storage, with completion expected in 2025[300] - The estimated cost for the Darien solar project is approximately $567 million, with 225 MWs of solar generation and 68 MWs of battery storage, expected to be completed in 2026[300] - A total of $940 million is proposed for additional LNG facilities in Wisconsin to enhance natural gas supply during peak winter demand[301] - The company plans to build natural gas-fired combustion turbines capable of producing approximately 675 MWs at an estimated cost of $960 million[302] Environmental and Regulatory Initiatives - The company aims to reduce carbon emissions from its electric generation fleet by 60% by the end of 2025 and by 80% by the end of 2030, using 2005 as a baseline[209] - The company has retired nearly 2,500 MWs of fossil-fueled generation since 2018 and plans to retire an additional 1,200 MWs of coal-fired generation by the end of 2031[211] - The company is targeting net-zero methane emissions from its natural gas distribution operations by the end of 2030, with contracts in place for 2.1 Bcf of renewable natural gas[216] - The company has initiated a pilot program to test long-duration energy storage technology, expected to continue through 2025[217] Tax and Financial Management - The company expects its 2025 annual effective tax rate to be between 6.5% and 7.5%[235] - Interest expense in the Wisconsin segment increased by $4.0 million in Q1 2025, driven by long-term debt issuance in 2024[249] - Income tax expense in the Wisconsin segment rose by $7.1 million in Q1 2025, reflecting higher pre-tax income[250] - Interest expense for the Illinois segment decreased by $1.8 million due to lower average short-term debt balances[258] - Income tax expense for the Illinois segment decreased by $2.9 million, driven by a decrease in pre-tax income[259] Market and Economic Conditions - The company is monitoring inflation and supply chain disruptions to minimize their impact on costs, including medical plans, fuel, and construction costs[361] - Changes in U.S. trade policy, including tariffs, could increase material costs and disrupt supply chains, adversely affecting infrastructure projects and capital plans[360] - The company believes the IRA will help reduce costs associated with investing in projects that support emission reductions and provide affordable, reliable, and clean energy[349] - The pause in fund disbursement under the Infrastructure Investment and Jobs Act and IRA could disrupt ongoing infrastructure projects and lead to potential project delays and cancellations[350] - The company is exposed to market risks due to ongoing regional conflicts, which may impact the global economy, supply chains, and fuel prices[359] Regulatory Developments - The Illinois Commerce Commission (ICC) ordered PGL to replace all cast and ductile iron pipes under 36 inches in diameter by January 1, 2035, with potential civil penalties for non-compliance[334] - The ICC approved PGL's use of the Qualifying Infrastructure Plant (QIP) rider for cost recovery, with pending reconciliations from 2017 through 2023 totaling approximately $2.8 billion[333] - In March 2025, Moody's changed the rating outlook for PGL to stable from negative, affirming its Aa3 senior secured rating and P-1 short term rating for commercial paper[325] - The Department of Commerce (DOC) announced final affirmative determinations in its AD/CVD investigations, increasing preliminary tariff rates on solar panels from Southeast Asian countries, impacting costs and availability[345] - The company expects to continue evaluating the impact of the increased tariff rates on its solar projects following the DOC's final determinations[345] Shareholder and Equity Information - The current quarterly dividend rate is $0.8925 per share, equating to an annual dividend of $3.57 per share[309] - As of March 31, 2025, common shareholders' equity was $12,975.8 million, with a total capitalization of $33,225.0 million, resulting in a debt to total capitalization ratio of 60.9%[320] - The company maintained compliance with all financial covenants related to outstanding short-term and long-term debt as of March 31, 2025[322]

Core Viewpoint - WEC Energy Group is conducting a conference call to discuss its financial results for the first quarter of 2025, highlighting the importance of the information shared during the call and the potential for forward-looking statements [1][2][3]. Group 1: Company Overview - Scott Lauber, the President and CEO of WEC Energy Group, is leading the conference call, indicating a structured approach to presenting the company's financial performance [4][5]. Group 2: Financial Information - Detailed financial information related to the first quarter results is available on the company's website, emphasizing transparency and accessibility for analysts and investors [1].

Financial Data and Key Metrics Changes - The company reported first quarter 2025 earnings of $2.27 per share, reflecting a $0.30 increase compared to the first quarter of 2024 [3][15] - The earnings guidance for 2025 is reaffirmed at $5.17 to $5.27 per share, assuming normal weather conditions for the remainder of the year [4][20] - The long-term compound annual growth rate (CAGR) target is maintained at 6.5% to 7% [4][20] Business Line Data and Key Metrics Changes - Utility operations earnings increased by $0.28 compared to the first quarter of 2024, driven by weather impacts and rate-based growth [15][16] - Earnings from the Energy Infrastructure segment increased by $0.05, largely due to higher production tax credits [18] - Earnings from the Corporate and Other segment decreased by $0.03, primarily due to higher interest expenses [19] Market Data and Key Metrics Changes - Wisconsin's unemployment rate stands at 3.2%, below the national average, indicating strong economic conditions [4] - Weather-normalized retail electric delivery saw a 0.7% growth, led by large commercial and industrial classes [17] Company Strategy and Development Direction - The company is focused on a $28 billion capital investment plan aimed at economic growth and reliability [7] - A new Very Large Customer (VLC) tariff proposal has been filed to accommodate economic growth and attract data center investments [11][12] - The company is actively working on transitioning its generation assets to gas and renewables to meet future capacity needs [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the economic development in Southeastern Wisconsin, particularly with significant projects like Microsoft's data center [5][39] - The company is monitoring the impacts of tariffs on its supply chain and capital plan, estimating a 2% to 3% exposure overall [7][8] - Management remains optimistic about continued growth in the region and the company's future prospects [22] Other Important Information - The company has no active rate cases currently and is preparing for future rate proceedings related to its capital investments [14] - The company is closely monitoring developments related to the Inflation Reduction Act and is actively seeking to safe harbor projects in its capital plan [9][49] Q&A Session Summary Question: Thoughts on recent MISO capacity auction results and CapEx for data centers - Management noted a tight auction and is working to ensure enough capacity to meet demand, with plans for additional gas generation [26][27] Question: Pipeline safety modernization program in Illinois and CapEx opportunities - Management indicated a ramp-up in spending expected in 2026 and 2027, with a projected annual spending of over $500 million [33][36] Question: Update on Microsoft and its data center development - Management confirmed ongoing positive discussions with Microsoft, with confidence in the demand forecast for Southeastern Wisconsin [39] Question: Impact of equity issuance on market uncertainty and cash needs - Management acknowledged that stock price, cash needs, and market conditions all play a role in equity issuance plans [40][41] Question: Potential impacts of the IRA and tax credit transferability - Management expressed that while the phase-out of IRA benefits could occur, the impact on existing projects would be limited [46][50] Question: Insights on the VLC tariff and its competitiveness - Management emphasized the fair and balanced nature of the VLC tariff, designed to attract large customers without subsidizing costs for others [56][57] Question: Drivers behind strong residential electric load growth - Management attributed the growth to normalization after an unusually warm previous year, with good customer connections contributing [63][65] Question: Cloverleaf project and generation needs - Management indicated that the Cloverleaf project could support up to 3.5 gigawatts of load, with a mix of gas and renewables expected [66][68]

Financial Data and Key Metrics Changes - The company reported first quarter 2025 earnings of $2.27 per share, reflecting a $0.30 increase compared to the first quarter of 2024 [4][16] - The earnings guidance for 2025 is reaffirmed at $5.17 to $5.27 per share, assuming normal weather conditions for the remainder of the year [5][22] - The long-term compound annual growth rate (CAGR) target remains at 6.5% to 7% [5][22] Business Line Data and Key Metrics Changes - Utility operations earnings increased by $0.28 compared to the first quarter of 2024, driven by weather impacts and rate-based growth [16][17] - Earnings from the Energy Infrastructure segment increased by $0.05, largely due to higher production tax credits [20] - Earnings from the Corporate and Other segment decreased by $0.03, primarily due to higher interest expenses [21] Market Data and Key Metrics Changes - Wisconsin's unemployment rate stands at 3.2%, below the national average, indicating strong economic conditions [5] - Weather-normalized retail electric delivery saw a 0.7% growth, led by large commercial and industrial classes [18][20] - The company anticipates a weather-normal annual electric sales growth of 4.5% to 5% starting in 2027 [20] Company Strategy and Development Direction - The company is focused on a $28 billion capital investment plan aimed at economic growth and reliability [8][10] - A new Very Large Customer (VLC) tariff proposal has been filed to accommodate economic growth and attract data center investments [12][13] - The company is actively working on transitioning its generation assets to gas and renewables to meet future capacity needs [29][68] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the economic development along the I-94 corridor and ongoing projects, including significant expansions by companies like Microsoft and Eli Lilly [6][7][92] - The management is cautiously optimistic about the future, noting that while there is caution among customers regarding tariffs, significant projects are still progressing [91][92] - The company is monitoring federal developments related to the Inflation Reduction Act and is actively seeking to safe harbor projects in its capital plan [10][51] Other Important Information - The company has no active rate cases currently and is preparing for future rate case filings [12][15] - The company plans to raise a total of $700 to $800 million in common equity in 2025 through various programs [21][43] - The company is managing tariff impacts on its capital plan, estimating a 2% to 3% overall exposure [8][80] Q&A Session Summary Question: Thoughts on recent MISO capacity auction results and CapEx for data centers - Management indicated a tight auction and is working to ensure enough capacity to meet demand, with plans for additional gas generation [27][28] Question: Pipeline safety modernization program in Illinois and CapEx opportunities - Management expects to ramp up the program in 2026 and 2027, with spending projected to exceed $500 million annually [35][37] Question: Update on Microsoft and data center developments - Management confirmed ongoing strong demand and development from Microsoft, with no concerns about the project's progress [39][41] Question: Impact of tariffs on capital plan - Management noted that tariffs could impact costs, particularly for solar and battery projects, and will notify regulators of any significant increases [78][81] Question: Future of gas in Illinois and potential impacts from workshops - Management remains optimistic about the gas needs and the approved pipe replacement program, with no expected negative changes [96] Question: Commentary on large load customers outside data centers - Management reported cautious optimism among large customers, with ongoing expansions in various sectors despite tariff concerns [91][92]