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NorthWestern Corporation (NASDAQ:NWE) Q4 2023 Earnings Call Transcript

NorthWestern Corporation (NASDAQ:NWE) Q4 2023 Earnings Call Transcript February 15, 2024

NorthWestern Corporation isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Brian Bird: Thanks, Travis. The first slide here, we talk about recent highlights. We just had two days of Board meetings. And one of the recent highlights was our ability to serve our customers in a cold snap in the middle of January. And really, that cold snap will be demonstrated two things. One, it demonstrates our need for capacity. So the importance of the Yellowstone County plant and the incremental coal strip that we'll be adding in 1/1/26 that's the first thing. The second thing is just a fantastic coordination of our operating folks to serve our customers when they need it most. That means days of minus 45-degree weather, very, very proud of our team and our ability to serve our customers. So the points on this particular page, recent highlights, reported GAAP diluted EPS of $3.22 for the year and non-GAAP diluted EPS of $3.27.

We're affirming our 2024 diluted EPS guidance of $3.42 to $3.62. We're also affirming our long term five year rate base and earnings per share growth rate targets of 4% to 6%. And I'd also like to point out we had unanimous approval of multi-party rate review settlements. In Montana, both our electric and natural gas rate reviews. In South Dakota, our electric brake review. We completed the second and final phase of the holding company reorganization on January 1, 2024, certainly can't overlook the monumental task that was and the great work throughout our company to make that happen. And we have also declared a dividend for the quarter of $0.65 per share payable March 9, 2024, to shareholders of record as of March 15, 2024. And lastly, a recent highlight for us.

Aerial view of a group of transmission substations and surrounding city surrounded by trees.
Aerial view of a group of transmission substations and surrounding city surrounded by trees.

Certainly, you talked about it before, but northwestern celebrating 100 powerful years. You may recall back in 2012, Montana Power celebrated its 100 year anniversary and our proud companies coming together now collectively been serving our customers in our service territories for over 100 years. If I move forward to the next page, I think about the great outcomes we had in 2023, particularly the rate reviews and clarity associated with earnings growth on a going forward basis, it still surprises me to see a 5% dividend yield in terms of that clarity. But with that is where we sit today and a base capital plan with a 4% to 6% EPS growth rate based upon capturing the value of $2.5 billion of investment provides a total return opportunity of 9% to 11%, which is fantastic.

And you can put on top of that opportunities we're focusing on and trying to also capture in our plan associated with accretive EPS projects associated with FERC transmission, incremental generate capacity, trying to buy out certain power purchase agreements and QF facilities and lastly, electrification supporting economic development, many projects associated with that, that we continue to stay focused on. And with being able to capture any of those pushes us over 11% total return. So we feel very good about the opportunities for this company on a going forward basis. There's still a tad surprise we sit here today with a 5-plus dividend yield. And with that, I'm going to pass it to Crystal.

Crystal Lail: Thank you, Brian, spoken like a former CFO, as always. So good afternoon, everyone, and thank you for joining us to discuss our year end financial performance here. Brian was highlighting what felt like a year of a lot of execution, I can tell you on the side of the house. And all of that led to the financial performance that we're closing out here, we're going to speak to, but highlighting specifically the element of regulatory execution, and that theme will continue throughout my remarks regarding our financial performance. As Brian mentioned, closing out the quarter on a non-GAAP basis, we reported EPS of $1.38 in Q4 of 2023, that's versus $1.13 in the fourth quarter of 2022. For a full year perspective on 2023, on a non-GAAP basis, we delivered $3.27 and that's versus $3.18 in 2022.

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To continue reading the Q&A session, please click here.

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