Black Hills (US:BKH)2026-02-04 21:28Financial Performance - Black Hills Corp. reported a net income of $104.9 million for Q4 2025, compared to $98.1 million in Q4 2024, and a full-year net income of $291.6 million, up from $273.1 million in 2024[1][2]. - The GAAP EPS for 2025 was $3.98, an increase of 1.8% from $3.91 in 2024, while the adjusted EPS was $4.10, reflecting a 5% increase compared to the previous year[2][6]. - Revenue for the three months ended Dec. 31, 2025, was $635.5 million, an increase of 6.8% compared to $597.1 million for the same period in 2024[20]. - Operating income for the twelve months ended Dec. 31, 2025, was $537.5 million, up 6.8% from $503.1 million in 2024[27]. - Total revenue for the twelve months ended Dec. 31, 2025, reached $2,310.0 million, a 8.6% increase from $2,127.7 million in 2024[27]. - Total operating expenses for the three months ended Dec. 31, 2025, were $464.1 million, compared to $433.8 million in 2024, representing a 6.0% increase[20]. - Other income, net, increased by $4.8 million for the three months ended Dec. 31, 2025, due to higher investment income from the captive insurance cell[26]. - Earnings per share (diluted) for the twelve months ended Dec. 31, 2025, was $3.98, compared to $3.91 in 2024, indicating a 1.8% increase[20]. - Weighted average common shares outstanding (diluted) increased to 75.4 million for the three months ended Dec. 31, 2025, from 71.6 million in 2024[20]. Capital Investments and Projects - Black Hills Corp. invested nearly $900 million in capital projects in 2025, including the completion of three rate reviews that generated over $52 million in new annual revenue[3][6]. - The Ready Wyoming electric transmission expansion project, a 260-mile initiative costing $350 million, was completed on schedule and is expected to enhance system resiliency and customer service[10][6]. - The company’s data center pipeline exceeds 3 GW, with plans to develop 600 MW by 2030, driven by partnerships with major tech companies like Microsoft and Meta[5][6]. Merger and Regulatory Matters - The merger with NorthWestern Energy is anticipated to close in the second half of 2026, with regulatory approvals already filed in multiple states[7][12]. - Black Hills filed 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 Black Hills and NorthWestern will be included in the joint proxy statement/prospectus related to the merger[47]. - The merger transaction will involve the solicitation of proxies from stockholders of both companies[47]. - Free copies of relevant documents can be obtained through the SEC website or by contacting investor relations departments[48]. - Media assistance is available 24 hours a day for inquiries related to the merger[48]. Customer Base and Market Presence - The company serves 1.37 million natural gas and electric utility customers across eight states, indicating a broad market presence and customer base[40]. Future Outlook and Guidance - The company initiated 2026 adjusted EPS guidance in the range of $4.25 to $4.45, indicating a projected 6% year-over-year growth[4][12]. - The company anticipates future growth and has provided earnings guidance for 2026, focusing on regulatory filings and the merger with NorthWestern Energy[41]. - The company expects an increase in operations and maintenance expenses of approximately 3.5% in 2026, based on a 2025 expense of $580 million[12][16]. Operational Challenges and Risks - The company is facing risks related to supply chain disruptions, inflation, and regulatory approvals that could impact future performance[42]. - Electric Utilities' operating income decreased by $10.5 million for the twelve months ended Dec. 31, 2025, primarily due to higher operating expenses and unplanned generation outages[28]. - Gas Utilities' operating income increased by $49.5 million for the twelve months ended Dec. 31, 2025, driven by new rates and rider recovery[28]. Energy Generation and Efficiency - Coal generation facility availability decreased to 69.4% in Q4 2025 from 97.2% in Q4 2024, while natural gas and diesel oil availability improved to 88.4% from 85.5%[32]. - The wind capacity factor for the company was reported at 39.7% for Q4 2025, an increase from 38.0% in Q4 2024, indicating improved efficiency in wind energy generation[32]. - The company has implemented a weather normalization mechanism for Nebraska Gas, effective August 2025, to mitigate weather impacts on utility margins[37]. Revenue and Sales Metrics - Retail revenue from residential customers for the three months ended December 31, 2025, was $226.8 million, an increase from $215.4 million in 2024, with total retail revenue for gas utilities reaching $402.9 million, up from $385.2 million[34]. - Quantities sold for the three months ended December 31, 2025, were 1,917.2 GWh, compared to 1,800.2 GWh in 2024, and for the twelve months, quantities sold were 7,666.8 GWh, up from 7,235.2 GWh in 2024[31]. - The company reported a 12% decrease in heating degree days for Arkansas Gas, with actual degree days at 1,105 compared to a normal of 1,073[36].