OGE Energy Corp. reports third quarter 2024 results

Rhea-AI Summary

OGE Energy Corp. (NYSE: OGE) reported third quarter 2024 earnings of $1.09 per diluted share, down from $1.20 in Q3 2023. The company's regulated electric subsidiary, OG&E, contributed $1.12 per share, compared to $1.22 in the same period last year. The decrease was primarily due to higher depreciation, interest expense, and operational costs, partially offset by robust load growth. Despite milder weather, strong normalized energy demand and customer growth delivered solid results. The company expects 2024 consolidated earnings at the top of its guidance range of $2.06 to $2.18 per diluted share, driven by strong load growth and warmer than normal weather.

Positive

• Strong load growth across all sectors
• Continued customer growth and increased digital adoption
• 2024 earnings expected at top of guidance range ($2.06-$2.18)
• Net income of $218.7 million in Q3 2024

Negative

• Q3 EPS decreased 9.2% YoY ($1.09 vs $1.20)
• Higher depreciation and interest expenses
• Increased operation and maintenance expenses
• Higher income tax expense

Insights

Financial Analyst

Q3 2024 results show mixed performance with earnings per share declining 9.2% year-over-year to $1.09. The core utility business OG&E contributed $225.0 million in net income, down from $246.1 million last year, primarily due to higher operational costs and depreciation expenses.

Despite headwinds from milder weather, strong load growth and customer additions helped maintain solid performance. Management's projection of earnings at the top end of $2.06-$2.18 guidance range is encouraging, supported by robust weather-normalized demand across sectors. The pending Oklahoma rate review settlement approval could provide regulatory clarity and support future earnings stability.

The balance sheet pressure from higher interest expenses warrants attention, though the regulated utility model and customer growth provide defensive characteristics. The 9.2% YoY earnings decline appears manageable given the company's focus on operational excellence and digital adoption initiatives.

OKLAHOMA CITY, Nov. 5, 2024 /PRNewswire/ -- OGE Energy Corp. (NYSE: OGE), the parent company of Oklahoma Gas and Electric Company ("OG&E"), today reported earnings of $1.09 per diluted share during the three months that ended September 30, 2024, compared to $1.20 per diluted share in the same period 2023.

• OG&E, a regulated electric company, contributed earnings of $1.12 per diluted share, compared to earnings of $1.22 per diluted share in the third quarter 2023.
• Other operations, which includes the holding company, contributed a loss of $0.03 per diluted share, compared to a loss of $0.02 per diluted share in the third quarter 2023.

"Delivering reliable, safe, resilient energy at some of the lowest rates in the nation is OG&E's north star," said Sean Trauschke, OGE Energy Corp. Chairman, President and CEO. "Strong weather normalized energy demand across all sectors combined with continued customer growth and outstanding operational excellence including increased digital adoption among our customers delivered solid third quarter results."

Third Quarter 2024 results

OG&E contributed net income of $225.0 million, or $1.12 per diluted share, in the third quarter compared to $246.1 million, or $1.22 per diluted share, in the same period 2023. The decrease in net income was primarily due to expected higher depreciation and interest expense on a growing asset base, as well as higher operation and maintenance expense and income tax expense, partially offset by robust load growth, which offset the impact of milder weather compared to last year.

Other Operations resulted in a loss of $6.3 million, or $0.03 per diluted share, in the third quarter compared to a loss of $4.2 million, or $0.02 per diluted share, in the same period 2023. The increase in net loss was primarily due to higher interest expense, partially offset by a higher income tax benefit.

OGE Energy's net income was $218.7 million or $1.09 per diluted share in the third quarter, compared to earnings of $241.9 million, or $1.20 per diluted share, in the same period 2023.

2024 Outlook
Due to strong load growth and warmer than normal weather, OGE Energy expects 2024 consolidated earnings at the top of its original guidance range of $2.06 to $2.18 per average diluted share. The guidance assumes, among other things, approval of the uncontested rate review settlement by the Oklahoma Corporation Commission in 2024, approximately 201.5 million average diluted shares outstanding, and normal weather for the remainder of the year. OG&E has significant seasonality in its earnings due to weather on a year over year basis. See OGE Energy's 2023 Form 10-K for other key factors and assumptions underlying its 2024 guidance.

Conference Call Webcast
OGE Energy Corp. will host an earnings and business update conference call on Tuesday, November 5, 2024, at 8 a.m. CT. The conference will be available through the Investor Center at www.oge.com.

OGE Energy Corp. is the parent company of OG&E, a regulated electric company with approximately 905,000 customers in Oklahoma and western Arkansas.

Some of the matters discussed in this news release may contain forward-looking statements that are subject to certain risks, uncertainties, and assumptions. Such forward-looking statements are intended to be identified in this document by the words "anticipate," "believe," "estimate," "expect," "forecast," "intend," "objective," "plan," "possible," "potential," "project," "target" and similar expressions. Actual results may vary materially. Factors that could cause actual results to differ materially from the forward-looking statements include, but are not limited to: general economic conditions, including the availability of credit, access to existing lines of credit, access to the commercial paper markets, actions of rating agencies and inflation rates, and their impact on capital expenditures; the ability of the Company and its subsidiaries to access the capital markets and obtain financing on favorable terms, as well as inflation rates and monetary fluctuations; the ability to obtain timely and sufficient rate relief to allow for recovery of items such as capital expenditures, fuel and purchased power costs, operating costs, transmission costs and deferred expenditures; prices and availability of electricity, coal and natural gas; competitive factors, including the extent and timing of the entry of additional competition in the markets served by the Company, potentially through deregulation; the impact on demand for the Company's services resulting from cost-competitive advances in technology, such as distributed electricity generation and customer energy efficiency programs; technological developments, changing markets and other factors that result in competitive disadvantages and create the potential for impairment of existing assets; factors affecting utility operations such as unusual weather conditions; catastrophic weather-related damage; unscheduled generation outages; unusual maintenance or repairs; unanticipated changes to fossil fuel, natural gas or coal supply costs or availability due to higher demand, shortages, transportation problems or other developments; environmental incidents; or electric transmission or gas pipeline system constraints; availability and prices of raw materials and equipment for current and future construction projects; the effect of retroactive pricing of transactions in the SPP markets or adjustments in market pricing mechanisms by the SPP; federal or state legislation and regulatory decisions and initiatives that affect cost and investment recovery, have an impact on rate structures or affect the speed and degree to which competition enters the Company's markets; environmental laws, safety laws or other regulations that may impact the cost of operations, restrict or change the way the Company's facilities are operated or result in stranded assets; the ability of the Company to meet future capacity requirements mandated by the SPP, which could be impacted by future load growth, environmental regulations recently finalized by the EPA, and the availability of resources; changes in accounting standards, rules or guidelines; the discontinuance of accounting principles for certain types of rate-regulated activities; the cost of protecting assets against, or damage due to, terrorism or cyberattacks, including losing control of our assets and potential ransoms, and other catastrophic events; changes in the use, perception or regulation of generative artificial intelligence technologies, which could limit our ability to utilize such technology, create risk of enhanced regulatory scrutiny, generate uncertainty around intellectual property ownership, licensing or use, or which could otherwise result in risk of damage to our business, reputation or financial results; creditworthiness of suppliers, customers and other contractual parties, including large, new customers from emerging industries such as cryptocurrency; social attitudes regarding the electric utility and power industries; identification of suitable investment opportunities to enhance shareholder returns and achieve long-term financial objectives through business acquisitions and divestitures; increased pension and healthcare costs; national and global events that could adversely affect and/or exacerbate macroeconomic conditions, including inflationary pressures, interest rate fluctuations, supply chain disruptions, economic recessions, pandemic health events and uncertainty surrounding continued hostilities or sustained military campaigns, and their collateral consequences; costs and other effects of legal and administrative proceedings, settlements, investigations, claims and matters, including, but not limited to, those described in the Company's Form 10-Q for the quarter ended September 30, 2024; and other risk factors listed in the reports filed by the Company with the Securities and Exchange Commission, including those listed within the Company's most recent Form 10-K for the year ended December 31, 2023.

Note: Condensed Consolidated Statements of Income for OGE Energy Corp., Condensed Statements of Income and Comprehensive Income for Oklahoma Gas & Electric Company, and Financial and Statistical Data for Oklahoma Gas & Electric Company attached.

 

OGE ENERGY CORP.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
		Three Months Ended				Nine Months Ended
		September 30,				September 30,
(In millions, except per share data)		2024		2023		2024		2023
OPERATING REVENUES
Revenues from contracts with customers		$ 945.2		$ 923.0		$ 2,171.9		$ 2,056.8
Other revenues		20.2		22.4		52.9		50.8
Operating revenues		965.4		945.4		2,224.8		2,107.6
FUEL, PURCHASED POWER AND DIRECT TRANSMISSION EXPENSE		350.1		333.8		776.2		716.2
OPERATING EXPENSES
Other operation and maintenance		131.4		122.7		394.2		381.4
Depreciation and amortization		144.0		132.5		408.7		377.8
Taxes other than income		26.7		25.3		82.6		78.2
Operating expenses		302.1		280.5		885.5		837.4
OPERATING INCOME		313.2		331.1		563.1		554.0
OTHER INCOME (EXPENSE)
Allowance for equity funds used during construction		6.9		4.5		18.2		14.1
Other net periodic benefit income		1.7		1.5		5.0		4.1
Other income		6.8		8.5		20.2		38.1
Other expense		(4.7)		(7.9)		(15.8)		(18.8)
Net other income		10.7		6.6		27.6		37.5
INTEREST EXPENSE
Interest on long-term debt		59.6		52.0		166.5		153.0
Allowance for borrowed funds used during construction		(3.9)		(1.9)		(10.7)		(5.3)
Interest on short-term debt and other interest charges		8.5		7.3		33.5		15.2
Interest expense		64.2		57.4		189.3		162.9
INCOME BEFORE TAXES		259.7		280.3		401.4		428.6
INCOME TAX EXPENSE		41.0		38.4		61.8		60.0
NET INCOME		$ 218.7		$ 241.9		$     339.6		$    368.6
BASIC AVERAGE COMMON SHARES OUTSTANDING		200.9		200.3		200.7		200.3
DILUTED AVERAGE COMMON SHARES OUTSTANDING		201.5		201.0		201.2		200.9
BASIC EARNINGS PER AVERAGE COMMON SHARE		$   1.09		$   1.21		$ 1.69		$       1.84
DILUTED EARNINGS PER AVERAGE COMMON SHARE		$   1.09		$   1.20		$ 1.69		$       1.83

 

OKLAHOMA GAS AND ELECTRIC COMPANY
CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Unaudited)
		Three Months Ended				Nine Months Ended
		September 30,				September 30,
(In millions)		2024		2023		2024		2023
OPERATING REVENUES
Revenues from contracts with customers		$ 945.2		$ 923.0		$ 2,171.9		$ 2,056.8
Other revenues		20.2		22.4		52.9		50.8
Operating revenues		965.4		945.4		2,224.8		2,107.6
FUEL, PURCHASED POWER AND DIRECT TRANSMISSION EXPENSE		350.1		333.8		776.2		716.2
OPERATING EXPENSES
Other operation and maintenance		131.4		123.3		394.0		383.4
Depreciation and amortization		144.0		132.5		408.7		377.8
Taxes other than income		26.7		24.7		82.6		75.3
Operating expenses		302.1		280.5		885.3		836.5
OPERATING INCOME		313.2		331.1		563.3		554.9
OTHER INCOME (EXPENSE)
Allowance for equity funds used during construction		6.9		4.5		18.2		14.1
Other net periodic benefit income		1.9		1.7		5.5		4.9
Other income		3.4		3.6		8.6		22.0
Other expense		(0.6)		(2.0)		(3.9)		(4.7)
Net other income		11.6		7.8		28.4		36.3
INTEREST EXPENSE
Interest on long-term debt		53.6		51.1		156.0		149.2
Allowance for borrowed funds used during construction		(3.9)		(1.9)		(10.7)		(5.3)
Interest on short-term debt and other interest charges		4.4		1.8		15.1		4.9
Interest expense		54.1		51.0		160.4		148.8
INCOME BEFORE TAXES		270.7		287.9		431.3		442.4
INCOME TAX EXPENSE		45.7		41.8		71.8		64.6
NET INCOME		$ 225.0		$ 246.1		$    359.5		$    377.8
Other comprehensive income, net of tax		—		—		—		—
COMPREHENSIVE INCOME		$ 225.0		$ 246.1		$    359.5		$    377.8

 

OKLAHOMA GAS AND ELECTRIC COMPANY
FINANCIAL AND STATISTICAL DATA
		Three Months Ended				Nine Months Ended
		September 30,				September 30,
(Dollars in millions)		2024		2023		2024		2023
Operating revenues by classification:
Residential		$   422.8		$   401.2		$    898.1		$    836.0
Commercial		288.8		243.8		626.1		538.2
Industrial		79.0		78.0		190.0		187.5
Oilfield		68.1		68.0		166.4		164.4
Public authorities and street light		86.8		82.2		198.6		182.4
System sales revenues		945.5		873.2		2,079.2		1,908.5
Provision for tax refund		(43.5)		—		(43.5)		2.0
Integrated market		19.2		26.2		51.3		57.7
Transmission		36.6		35.6		114.7		106.9
Other		7.6		10.4		23.1		32.5
Total operating revenues		$   965.4		$   945.4		$ 2,224.8		$ 2,107.6
MWh sales by classification (In millions)
Residential		3.2		3.3		7.8		7.6
Commercial		3.2		2.6		7.8		6.5
Industrial		1.1		1.1		3.2		3.2
Oilfield		1.1		1.1		3.3		3.3
Public authorities and street light		0.9		0.9		2.4		2.3
System sales		9.5		9.0		24.5		22.9
Integrated market		0.2		0.3		0.6		0.7
Total sales		9.7		9.3		25.1		23.6
Number of customers		904,900		893,894		904,900		893,894
Weighted-average cost of energy per kilowatt-hour (In cents)
Natural gas		2.142		2.668		2.453		2.927
Coal		2.976		3.368		3.064		3.402
Total fuel		2.277		2.744		2.487		2.909
Total fuel and purchased power		3.448		3.430		2.953		2.887
Degree days (A)
Heating - Actual		—		—		1,812		1,926
Heating - Normal		19		19		2,155		2,155
Cooling - Actual		1,387		1,510		2,139		2,087
Cooling - Normal		1,268		1,268		1,831		1,831

(A) Degree days are calculated as follows: The high and low degrees of a particular day are added together and then averaged. If the calculated average is above 65 degrees, then the difference between the calculated average and 65 is expressed as cooling degree days, with each degree of difference equaling one cooling degree day. If the calculated average is below 65 degrees, then the difference between the calculated average and 65 is expressed as heating degree days, with each degree of difference equaling one heating degree day. The daily calculations are then totaled for the particular reporting period. The calculation of heating and cooling degree normal days is based on a 30-year average and updated every ten years.

 

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SOURCE OGE Energy Corp.

FAQ

What was OGE Energy's earnings per share in Q3 2024?

OGE Energy Corp. reported earnings of $1.09 per diluted share in Q3 2024, compared to $1.20 per diluted share in Q3 2023.

What is OGE Energy's earnings guidance for 2024?

OGE Energy expects 2024 consolidated earnings to be at the top of its guidance range of $2.06 to $2.18 per diluted share.

What factors caused OGE's decrease in Q3 2024 earnings?

The decrease was primarily due to higher depreciation, interest expense, operation and maintenance costs, and income tax expense, partially offset by robust load growth.

How many customers does OG&E serve?

OG&E serves approximately 905,000 customers in Oklahoma and western Arkansas.