Xcel Energy, Inc. :XEL-US: Earnings Analysis: 2016 By the Numbers : February 3, 2017

Xcel Energy, Inc. reports financial results for the year ended December 31, 2016.

We analyze the earnings along side the following peers of Xcel Energy, Inc. – WEC Energy Group Inc and PPL Corporation (WEC-US and PPL-US) that have also reported for this period.

Highlights

  • Gross margins widened from 24.12% to 24.72% compared to the same period last year, operating (EBITDA) margins now 31.67% from 30.85%.
  • Earnings growth from operating margin improvements as well as one-time items.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2016 2015 2014 2013 2012
Relevant Numbers (Annual)
Revenues 11106.92 11031.77 11684.61 10903.7 10116
Revenue Growth (YOY) N/A N/A N/A N/A N/A
Earnings 1123.38 984.49 1021.31 948.23 905.2
Earnings Growth (YOY) 14.11 -3.61 7.71 4.75 7.59
Net Margin 10.11 8.92 8.74 8.7 8.95
EPS 2.21 1.94 2.03 1.91 1.85
Return on Equity 10.4 9.46 10.33 10.28 10.43
Return on Assets 2.88 2.59 2.88 2.92 2.99

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Earnings Growth Analysis

The company’s earnings growth was influenced by year-on-year improvement in gross margins from 24.12% to 24.72% as well as better cost controls. As a result, operating margins (EBITDA margins) rose from 30.85% to 31.67% compared to the same period last year. For comparison, gross margins were 24.12% and EBITDA margins were 30.85% in the last reporting period.

Gross Margin Versus EBITDA Margin

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Commodity; Low Cost, Commodity; High Cost, Differentiated; High Cost

Margins

The company’s earnings growth has also been influenced by the following factors: (1) Improvements in operating (EBIT) margins from 19.48% to 19.93% and (2) one-time items. The company’s pretax margins are now 15.35% compared to 13.84% for the same period last year.

EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables
EBIT Margin History
PreTax Margin History

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Company Profile

Xcel Energy, Inc. operates as a holding company, which engages in the generation, purchase, transmission, distribution and sale of electricity and natural gas business through its subsidiaries. It operates through the following segments: Regulated Electric Utility, Regulated Natural Gas Utility and All Others. The Regulated Electric Utility segment generates, transmits and distributes electricity primarily in portions of Minnesota, Wisconsin, Michigan, North Dakota, South Dakota, Colorado, Texas and New Mexico. In addition, this segment includes sales for resale and provides wholesale transmission service to various entities in the United States. It also includes commodity trading operations. The Regulated Natural Gas Utility segment transports, stores, and distributes natural gas primarily in portions of Minnesota, Wisconsin, North Dakota, Michigan and Colorado. The All Others segment primarily includes steam, appliance repair services, nonutility real estate activities, processing solid waste into refuse-derived fuel and investments in rental housing projects that qualify for low-income housing tax credits. The company was founded in 1909 and is headquartered in Minneapolis, MN.

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