Evergy Announces 2023 Results, Declares Quarterly Dividend and Issues 2024 Guidance
- Evergy's 2023 GAAP earnings were $731.3 million, with EPS of $3.17, down from $752.7 million and EPS of $3.27 in 2022.
- Adjusted earnings for 2023 were $815.6 million, with adjusted EPS of $3.54, compared to $853.8 million and $3.71 in 2022.
- The company issued 2024 GAAP and adjusted EPS guidance of $3.73 to $3.93, reaffirming a 4% to 6% annual growth target through 2026.
- A quarterly dividend of $0.6425 per share was declared, payable on March 22, 2024, to shareholders of record as of March 11, 2024.
- Evergy updated its five-year $12.5 billion capital investment plan from 2024 through 2028.
- The company's financial results were impacted by challenges from the higher interest rate environment, regulatory lag, and mild weather in 2023.
- Management remains focused on operational and financial execution and advancing regulatory policies to attract investment capital and capitalize on economic development opportunities.
- Earnings for 2023 declined compared to 2022, with lower adjusted earnings and EPS.
- Challenges from the higher interest rate environment, regulatory lag, and mild weather affected the financial results.
- The company's adjusted O&M expenses were 12% lower relative to 2022, indicating cost management efforts.
Insights
The reported GAAP EPS of $3.17 for the full year 2023 compared to the previous year's $3.27 indicates a slight decline in profitability on a per-share basis. This decline, even though marginal, can be a concern for investors as it reflects a decrease in net income attributable to common shareholders. The adjusted EPS (non-GAAP) also shows a similar downtrend from $3.71 to $3.54. These figures, especially the GAAP EPS, are critical as they are often used by the market to gauge a company's performance. However, the guidance for 2024 suggests an expected improvement in both GAAP and adjusted EPS, which could be an indicator of management's confidence in the company's future performance and may impact the stock positively if investors share this optimism.
Moreover, the declaration of a quarterly dividend of $0.6425 per share is a sign of returning value to shareholders and can be seen as a positive signal regarding the company's liquidity and cash flow management. The update of the five-year capital investment plan to $12.5 billion through 2028 is significant as it highlights the company's commitment to long-term growth and strategic objectives. Investors will likely scrutinize how these capital investments will drive future earnings and operational efficiency. In the utility sector, where investments are often capital-intensive, such plans are critical for maintaining and improving infrastructure and hence, can have a substantial impact on long-term shareholder value.
Evergy's strategic focus on affordability, reliability and sustainability, as evidenced by the Kansas rate case settlement and the addition of the Persimmon Creek wind farm, reflects the ongoing industry shift towards cleaner energy and regulatory compliance. The nearly 10% improvement in reliability is notable as it can lead to increased customer satisfaction and potentially lower operational costs in the long run. However, the company's financial performance has been affected by an unfavorable interest rate environment and regulatory lag, which are common challenges in the energy sector.
The management's mention of 'laser-focus' on operational and financial execution and advancing constructive regulatory policies is crucial. It underscores the importance of operational efficiency and a favorable regulatory environment in the energy sector. Regulatory policies can significantly affect utilities' operations, pricing and profitability and any changes can have material implications for the company's financial health and stock performance.
The 12% decrease in adjusted operations and maintenance expense relative to 2022 is a testament to the company's cost management initiatives. In the utility industry, where margins are often regulated and tight, the ability to manage costs effectively is a key driver of profitability. Investors will likely view this as a positive development, expecting that such cost efficiencies could buffer against external pressures such as interest rate hikes and mild weather conditions that can dampen demand.
The reaffirmed long-term adjusted EPS (non-GAAP) annual growth target of 4% to 6% through 2026 is an important metric for investors, as it provides a growth trajectory against which they can measure the company's future performance. This growth expectation, if met, could contribute to a positive investor sentiment and support the company's stock price. However, it is critical for investors to monitor the company's ability to achieve this target in the context of the broader economic and regulatory environment.
-
2023 GAAP EPS of
$3.17 $3.27 -
2023 Adjusted EPS (Non-GAAP) of
$3.54 $3.71 -
2024 GAAP and Adjusted (Non-GAAP) EPS guidance of
$3.73 $3.93 -
Declares quarterly dividend of
$0.64 25 -
Updates five-year
$12.5 billion
Evergy’s full year 2023 adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP) were
Fourth quarter 2023 adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP) were
Full year 2023 adjusted earnings (non-GAAP) per share were driven by higher interest expense, higher depreciation and amortization, unfavorable weather compared to the prior year, partially offset by lower operations and maintenance expense, tax items, and higher corporate owned life insurance proceeds.
"In 2023, we advanced our strategic objectives of affordability, reliability and sustainability. The
Earnings Guidance
The Company issued its 2024 GAAP EPS guidance range of
Dividend Declaration
The Board of Directors declared a dividend on the Company’s common stock of
Capital Investment Plan
The Company updated its five-year capital investment plan to
Earnings Conference Call
Evergy management will host a conference call Thursday, February 29, with the investment community at 9:00 a.m. ET (8:00 a.m. CT). To view the webcast and presentation slides, please go to investors.evergy.com. To access via phone, investors and analysts will need to register using this link where they will be provided a phone number and access code.
Members of the media are invited to listen to the conference call and then contact Gina Penzig with any follow-up questions.
This earnings announcement, a package of detailed fourth quarter financial information, the Company's quarterly report on Form 10-K for the period ended December 31, 2023, and other filings the Company has made with the Securities and Exchange Commission are available on the Company's website at http://investors.evergy.com.
Adjusted Earnings (non-GAAP) and Adjusted Earnings Per Share (non-GAAP)
Management believes that adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) are representative measures of Evergy's recurring earnings, assists in the comparability of results and is consistent with how management reviews performance.
Evergy's adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) for 2023 were
In addition to net income attributable to Evergy, Inc. and diluted EPS, Evergy's management uses adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) to evaluate earnings and EPS without:
- the costs resulting from non-regulated energy marketing margins from the February 2021 winter weather event;
- gains or losses related to equity investments subject to a restriction on sale;
- the deferral of the cumulative amount of prior year revenues collected from customers since December 2018 for the return on investment of the retired Sibley Station in 2022 for future refunds to customers;
-
the mark-to-market impacts of economic hedges related to Evergy Kansas Central's
8% ownership share of JEC; - costs resulting from executive transition, severance and advisor expenses;
- the deferral of the cumulative amount of transmission revenues collected from customers since 2018 through Evergy Kansas Central's FERC TFR to be refunded to customers in accordance with a December 2022 FERC order;
- the impairment loss on Sibley Unit 3 and other regulatory disallowances;
- the 2023 deferral of the cumulative amount of prior year revenues collected since October 2019 for costs related to an electric subdivision rebate program to be refunded to customers in accordance with a June 2020 KCC order; and
- the deferral of revenues for future refund of amounts previously collected from customers related to COLI rate credits in accordance with a September 2023 KCC rate case unanimous settlement agreement.
Adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) are intended to aid an investor's overall understanding of results. Management believes that adjusted earnings (non-GAAP) provides a meaningful basis for evaluating Evergy's operations across periods because it excludes certain items that management does not believe are indicative of Evergy's ongoing performance or that can create period to period earnings volatility.
Adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) are used internally to measure performance against budget and in reports for management and the Evergy Board. Adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) are financial measures that are not calculated in accordance with GAAP and may not be comparable to other companies' presentations or more useful than the GAAP information provided elsewhere in this report.
Evergy, Inc |
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Consolidated Earnings and Diluted Earnings Per Share |
||||||||||||||
(Unaudited) |
||||||||||||||
|
||||||||||||||
|
Earnings (Loss) |
Earnings (Loss) per Diluted Share |
Earnings (Loss) |
Earnings (Loss) per Diluted Share |
||||||||||
Three Months Ended December 31 |
2023 |
2022 |
||||||||||||
|
(millions, except per share amounts) |
|||||||||||||
Net income attributable to Evergy, Inc. |
$ |
58.0 |
|
$ |
0.25 |
$ |
7.5 |
|
$ |
0.03 |
|
|||
Non-GAAP reconciling items: |
|
|
|
|
||||||||||
Sibley Station return on investment, pre-tax(b) |
|
— |
|
|
— |
|
13.2 |
|
|
0.06 |
|
|||
Mark-to-market impact of JEC economic hedges, pre-tax(c) |
|
3.9 |
|
|
0.02 |
|
(0.9 |
) |
|
— |
|
|||
Non-regulated energy marketing costs related to February 2021 winter weather event, pre-tax(d) |
|
0.1 |
|
|
— |
|
0.4 |
|
|
— |
|
|||
Executive transition costs, pre-tax(e) |
|
— |
|
|
— |
|
1.5 |
|
|
0.01 |
|
|||
Severance costs, pre-tax(f) |
|
— |
|
|
— |
|
2.3 |
|
|
0.01 |
|
|||
Advisor expenses, pre-tax(g) |
|
— |
|
|
— |
|
2.3 |
|
|
0.01 |
|
|||
Sibley Unit 3 impairment loss and other regulatory disallowances, pre-tax(h) |
|
— |
|
|
— |
|
28.9 |
|
|
0.13 |
|
|||
TFR refund, pre-tax(j) |
|
— |
|
|
— |
|
30.8 |
|
|
0.13 |
|
|||
Income tax benefit(m) |
|
(0.9 |
) |
|
— |
|
(17.4 |
) |
|
(0.08 |
) |
|||
Adjusted earnings (non-GAAP) |
$ |
61.1 |
|
$ |
0.27 |
$ |
68.6 |
|
$ |
0.30 |
|
|||
|
Earnings (Loss) |
Earnings (Loss) per Diluted Share |
Earnings (Loss) |
Earnings (Loss) per Diluted Share |
|||||||||||
Year Ended December 31 |
2023 |
2022 |
|||||||||||||
|
(millions, except per share amounts) |
||||||||||||||
Net income attributable to Evergy, Inc. |
$ |
731.3 |
|
$ |
3.17 |
|
$ |
752.7 |
|
$ |
3.27 |
|
|||
Non-GAAP reconciling items: |
|
|
|
|
|||||||||||
Non-regulated energy marketing margin related to February 2021 winter weather event, pre-tax(a) |
|
— |
|
|
— |
|
|
2.1 |
|
|
0.01 |
|
|||
Sibley Station return on investment, pre-tax(b) |
|
— |
|
|
— |
|
|
51.4 |
|
|
0.22 |
|
|||
Mark-to-market impact of JEC economic hedges, pre-tax(c) |
|
8.7 |
|
|
0.04 |
|
|
(11.2 |
) |
|
(0.05 |
) |
|||
Non-regulated energy marketing costs related to February 2021 winter weather event, pre-tax(d) |
|
0.3 |
|
|
— |
|
|
1.3 |
|
|
0.01 |
|
|||
Executive transition costs, pre-tax(e) |
|
— |
|
|
— |
|
|
2.2 |
|
|
0.01 |
|
|||
Severance costs, pre-tax(f) |
|
— |
|
|
— |
|
|
2.3 |
|
|
0.01 |
|
|||
Advisor expenses, pre-tax(g) |
|
— |
|
|
— |
|
|
5.4 |
|
|
0.02 |
|
|||
Sibley Unit 3 impairment loss and other regulatory disallowances, pre-tax(h) |
|
— |
|
|
— |
|
|
34.9 |
|
|
0.15 |
|
|||
Restricted equity investment losses, pre-tax(i) |
|
— |
|
|
— |
|
|
16.3 |
|
|
0.07 |
|
|||
TFR refund, pre-tax(j) |
|
— |
|
|
— |
|
|
25.0 |
|
|
0.11 |
|
|||
Electric subdivision rebate program costs refund, pre-tax(k) |
|
2.6 |
|
|
0.01 |
|
|
— |
|
|
— |
|
|||
Customer refunds related to COLI rate credits, pre-tax(l) |
|
96.5 |
|
|
0.42 |
|
|
— |
|
|
— |
|
|||
Income tax benefit(m) |
|
(23.8 |
) |
|
(0.10 |
) |
|
(28.6 |
) |
|
(0.12 |
) |
|||
Adjusted earnings (non-GAAP) |
$ |
815.6 |
|
$ |
3.54 |
|
$ |
853.8 |
|
$ |
3.71 |
|
|||
|
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| (a) Reflects non-regulated energy marketing margins related to the February 2021 winter weather event that are included in operating revenues on the consolidated statements of comprehensive income. | |||||||||||||||
| (b) Reflects the deferral of the cumulative amount of prior year revenues collected from customers since December 2018 for the return on investment of the retired Sibley Station for future refunds to customers that are included in operating revenues on the consolidated statements of comprehensive income. | |||||||||||||||
| (c) Reflects mark-to-market gains or losses related to forward contracts for natural gas and electricity entered into as economic hedges against fuel price volatility related to Evergy Kansas Central's |
|||||||||||||||
(d) Reflects non-regulated energy marketing incentive compensation costs related to the February 2021 winter weather event that are included in operating and maintenance expense on the consolidated statements of comprehensive income. |
|||||||||||||||
(e) Reflects costs associated with executive transition including inducement bonuses, severance agreements and other transition expenses that are included in operating and maintenance expense on the consolidated statements of comprehensive income. |
|||||||||||||||
| (f) Reflects severance costs incurred associated with certain severance programs at the Evergy Companies that are included in operating and maintenance expense on the consolidated statements of comprehensive income. | |||||||||||||||
(g) Reflects advisor expenses incurred associated with strategic planning that are included in operating and maintenance expense on the consolidated statements of comprehensive income. |
|||||||||||||||
(h) Reflects the impairment loss on Sibley Unit 3 and costs related to certain meter replacements that were disallowed in the 2022 Evergy Metro and Evergy Missouri West rate cases that are included in Sibley Unit 3 impairment loss and other regulatory disallowances on the consolidated statements of comprehensive income. |
|||||||||||||||
(i) Reflects losses related to equity investments which were subject to a restriction on sale that are included in investment earnings on the consolidated statements of comprehensive income. |
|||||||||||||||
(j) Reflects the deferral of the cumulative amount of prior year transmission revenues collected from customers since 2018 through Evergy Kansas Central's transmission formula rate to be refunded to customers in accordance with a December 2022 Federal Energy Regulatory Commission order that are included in operating revenues on the consolidated statements of comprehensive income. |
|||||||||||||||
(k) Reflects the deferral of the cumulative amount of prior year revenues collected since October 2019 for costs related to an electric subdivision rebate program to be refunded to customers in accordance with a June 2020 KCC order that are included in operating revenues on the consolidated statements of comprehensive income. |
|||||||||||||||
(l) Reflects the deferral of revenues for future refund of amounts previously collected from customers related to COLI rate credits in accordance with a September 2023 KCC rate case unanimous settlement agreement reached between Evergy, the KCC staff and other intervenors that are included in operating revenues on the consolidated statements of comprehensive income. |
|||||||||||||||
| (m) Reflects an income tax effect calculated at a statutory rate of approximately |
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GAAP to Non-GAAP Earnings Guidance
|
Original 2023
Guidance |
2024
Guidance |
|
Net income attributable to Evergy, Inc. |
|
|
|
Non-GAAP reconciling items: |
|
|
|
- |
- |
- |
|
Adjusted earnings (non-GAAP) |
|
|
GAAP to Non-GAAP O&M Reconciliation
|
2022 |
2023 |
|
|
(millions) |
||
GAAP O&M |
|
|
|
Non-GAAP reconciling items: |
|
|
|
- Severance expense |
(2) |
|
- |
- Non-asset margin incentives |
(1) |
|
(0.3) |
- Advisor expense |
(5) |
|
- |
- Executive transition costs |
(2) |
|
- |
Adjusted O&M (non-GAAP) |
|
|
|
About Evergy
Evergy, Inc. (NASDAQ: EVRG), serves 1.7 million customers in
For more information about Evergy, visit us at http://investors.evergy.com.
Forward Looking Statements
Statements made in this document that are not based on historical facts are forward-looking, may involve risks and uncertainties, and are intended to be as of the date when made. Forward-looking statements include, but are not limited to, statements relating to Evergy's strategic plan, including, without limitation, those related to earnings per share, dividend, operating and maintenance expense and capital investment goals; the outcome of legislative efforts and regulatory and legal proceedings; future energy demand; future power prices; plans with respect to existing and potential future generation resources; the availability and cost of generation resources and energy storage; target emissions reductions; and other matters relating to expected financial performance or affecting future operations. Forward-looking statements are often accompanied by forward-looking words such as "anticipates," "believes," "expects," "estimates," "forecasts," "should," "could," "may," "seeks," "intends," "proposed," "projects," "planned," "target," "outlook," "remain confident," "goal," "will" or other words of similar meaning. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results to differ materially from the forward-looking information.
In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the Evergy Companies are providing a number of risks, uncertainties and other factors that could cause actual results to differ from the forward-looking information. These risks, uncertainties and other factors include, but are not limited to: economic and weather conditions and any impact on sales, prices and costs; changes in business strategy or operations; the impact of federal, state and local political, legislative, judicial and regulatory actions or developments, including deregulation, re-regulation, securitization and restructuring of the electric utility industry; decisions of regulators regarding, among other things, customer rates and the prudency of operational decisions such as capital expenditures and asset retirements; changes in applicable laws, regulations, rules, principles or practices, or the interpretations thereof, governing tax, accounting and environmental matters, including air and water quality and waste management and disposal; the impact of climate change, including increased frequency and severity of significant weather events and the extent to which counterparties are willing to do business with, finance the operations of or purchase energy from the Evergy Companies due to the fact that the Evergy Companies operate coal-fired generation; prices and availability of electricity and natural gas in wholesale markets; market perception of the energy industry and the Evergy Companies; the impact of future pandemic health events on, among other things, sales, results of operations, financial position, liquidity and cash flows, and also on operational issues, such as supply chain issues and the availability and ability of the Evergy Companies' employees and suppliers to perform the functions that are necessary to operate the Evergy Companies; changes in the energy trading markets in which the Evergy Companies participate, including retroactive repricing of transactions by regional transmission organizations (RTO) and independent system operators; financial market conditions and performance, disruptions in the banking industry, including volatility in interest rates and credit spreads and in availability and cost of capital and the effects on derivatives and hedges, nuclear decommissioning trust and pension plan assets and costs; impairments of long-lived assets or goodwill; credit ratings; inflation rates; effectiveness of risk management policies and procedures and the ability of counterparties to satisfy their contractual commitments; impact of physical and cybersecurity breaches, criminal activity, terrorist attacks, acts of war and other disruptions to the Evergy Companies' facilities or information technology infrastructure or the facilities and infrastructure of third-party service providers on which the Evergy Companies rely; impact of geopolitical conflicts on the global energy market; ability to carry out marketing and sales plans; cost, availability, quality and timely provision of equipment, supplies, labor and fuel; impacts of tariffs; ability to achieve generation goals and the occurrence and duration of planned and unplanned generation outages; delays and cost increases of generation, transmission, distribution or other projects; the Evergy Companies' ability to manage their transmission and distribution development plans and transmission joint ventures; the inherent risks associated with the ownership and operation of a nuclear facility, including environmental, health, safety, regulatory and financial risks; workforce risks, including those related to the Evergy Companies' ability to attract and retain qualified personnel, maintain satisfactory relationships with their labor unions and manage costs of, or changes in, wages, retirement, health care and other benefits; disruption, costs and uncertainties caused by or related to the actions of individuals or entities, such as activist shareholders or special interest groups, that seek to influence Evergy's strategic plan, financial results or operations; the impact of changing expectations and demands of the Evergy Companies' customers, regulators, investors and stakeholders, including heightened emphasis on environmental, social and governance concerns; the possibility that strategic initiatives, including mergers, acquisitions and divestitures, and long-term financial plans, may not create the value that they are expected to achieve in a timely manner or at all; difficulties in maintaining relationships with customers, employees, regulators or suppliers; and other risks and uncertainties.
This list of factors is not all-inclusive because it is not possible to predict all factors. You should also carefully consider the information contained in the Evergy Companies' other filings with the Securities and Exchange Commission (SEC). Additional risks and uncertainties are discussed from time to time in current, quarterly and annual reports filed by the Evergy Companies with the SEC. New factors emerge from time to time, and it's not possible for the Evergy Companies to predict all such factors, nor can the Evergy Companies assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained or implied in any forward-looking statement. Given these uncertainties, undue reliance should not be placed on these forward-looking statements. The Evergy Companies undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240228216083/en/
Investor Contact:
Pete Flynn
Director, Investor Relations
Phone: 816-652-1060
Peter.Flynn@evergy.com
Media Contact:
Gina Penzig
Director, Corporate Communications
Phone: 785-508-2410
Gina.Penzig@evergy.com
Media line: 888-613-0003
Source: Evergy, Inc.
FAQ
What were Evergy's 2023 GAAP EPS and adjusted EPS?
What is Evergy's 2024 EPS guidance range?
When is Evergy's dividend payable?
What is the updated capital investment plan for Evergy?
What factors impacted Evergy's financial results in 2023?
