“Xcel Energy posted a solid fourth quarter with GAAP diluted earnings per share climbing to $0.95 from $0.81 a year earlier, driven by higher revenues and infrastructure recoveries, though partially offset by increased expenses. Revenues rose to $3.56 billion, fueled by electric and natural gas segments. For the full year, ongoing EPS reached $3.80, surpassing prior guidance, amid robust sales growth and strategic investments, while affirming a 2026 outlook of $4.04 to $4.16 per share.”
Financial Highlights
Xcel Energy’s fourth quarter results showcased resilience in a challenging utility landscape, with net income reaching $567 million, marking a notable increase from the $464 million recorded in the prior year’s comparable period. This translated into GAAP diluted earnings per share of $0.95, reflecting growth from the previous $0.81. On an adjusted basis, ongoing earnings per share stood at $0.96, highlighting the company’s ability to navigate operational headwinds.
Operating revenues for the quarter totaled $3.561 billion, up significantly from $3.120 billion in the fourth quarter of the previous year. This uptick was primarily attributed to the electric utility segment, which generated $2.809 billion in revenues, compared to $2.410 billion previously, benefiting from higher sales volumes and rate recoveries. The natural gas segment contributed $737 million, a modest rise from $695 million, supported by regulatory adjustments and customer demand patterns.
Operating expenses climbed to $2.981 billion from $2.773 billion, influenced by higher costs in fuel, purchased power, and maintenance activities. Despite this, operating income surged to $580 million from $347 million, underscoring efficient cost management and revenue growth. Interest charges increased to $364 million from $297 million, reflecting higher borrowing costs in a rising rate environment, while income tax provisions shifted favorably, providing a $132 million benefit compared to a $297 million expense previously.
For the full year, Xcel Energy achieved GAAP net income of $2.018 billion, or $3.42 per diluted share, slightly down from $1.936 billion or $3.44 per share in the prior year, largely due to one-time settlements and refunds absent in the current period. However, ongoing diluted earnings per share advanced to $3.80 from $3.50, demonstrating strong underlying performance. Full-year operating revenues expanded to $14.669 billion from $13.441 billion, with electric revenues at $12.160 billion and natural gas at $2.452 billion.
Full-year operating expenses totaled $12.086 billion, up from $11.055 billion, with key components including electric fuel and purchased power at $3.961 billion, natural gas costs at $1.041 billion, operations and maintenance at $2.732 billion, and depreciation and amortization at $2.953 billion. Operating income for the year rose to $2.583 billion from $2.386 billion, bolstered by infrastructure investments and sales expansion.
Segment Analysis
| Metric | Q4 2025 | Q4 2024 | Change | Full Year 2025 | Full Year 2024 | Change |
|---|---|---|---|---|---|---|
| GAAP Diluted EPS | $0.95 | $0.81 | +$0.14 | $3.42 | $3.44 | -$0.02 |
| Ongoing Diluted EPS | $0.96 | $0.81 | +$0.15 | $3.80 | $3.50 | +$0.30 |
| Net Income (millions) | $567 | $464 | +$103 | $2,018 | $1,936 | +$82 |
| Operating Revenues (billions) | $3.561 | $3.120 | +$0.441 | $14.669 | $13.441 | +$1.228 |
| Operating Expenses (billions) | $2.981 | $2.773 | +$0.208 | $12.086 | $11.055 | +$1.031 |
| Operating Income (millions) | $580 | $347 | +$233 | $2,583 | $2,386 | +$197 |
Breaking down performance by operating companies revealed varied contributions. NSP-Minnesota, serving customers in Minnesota and the Dakotas, delivered $0.36 per share in the fourth quarter, a slight improvement from $0.35, driven by electric sales growth and rate case outcomes. For the full year, it contributed $1.53 per share, up from $1.41, benefiting from infrastructure riders and favorable weather-normalized sales.
Public Service Company of Colorado (PSCo) reported $0.36 per share for the quarter, advancing from $0.33, thanks to higher natural gas recoveries and electric margins. Annually, however, GAAP earnings dipped to $1.15 per share from $1.39, impacted by a significant wildfire settlement charge, though ongoing metrics showed resilience.
Southwestern Public Service (SPS), operating in Texas and New Mexico, posted $0.13 per share in the fourth quarter, up from $0.12, supported by transmission investments and sales increases. Full-year results were $0.67 per share, marginally down from $0.70, due to higher depreciation and interest expenses offsetting revenue gains.
NSP-Wisconsin contributed $0.08 per share in the quarter, rising from $0.05, aided by regulatory approvals and cost recoveries. For the year, it achieved $0.27 per share, an increase from $0.24, reflecting steady utility operations.
Overall, the regulated utility segments combined for $0.94 per share in the fourth quarter, up from $0.85, and $3.65 per share for the year on a GAAP basis, with ongoing at $4.03 versus $3.83 previously.
Key Drivers and Operational Insights
| Segment | Q4 2025 EPS | Q4 2024 EPS | Full Year 2025 EPS | Full Year 2024 EPS |
|---|---|---|---|---|
| NSP-Minnesota | $0.36 | $0.35 | $1.53 | $1.41 |
| PSCo | $0.36 | $0.33 | $1.15 | $1.39 |
| SPS | $0.13 | $0.12 | $0.67 | $0.70 |
| NSP-Wisconsin | $0.08 | $0.05 | $0.27 | $0.24 |
| Total Regulated | $0.94 | $0.85 | $3.65 (GAAP) / $4.03 (Ongoing) | $3.76 (GAAP) / $3.83 (Ongoing) |
Several factors propelled Xcel Energy’s results. Higher electric revenues added approximately $1.27 per share annually, stemming from non-fuel riders, fuel cost recoveries, production tax credits, new regulatory rates, and a 2.0% weather-normalized sales growth. Natural gas revenues contributed $0.29 per share, buoyed by infrastructure investments and rate adjustments, despite a 1.7% decline in weather-normalized sales.
Allowance for funds used during construction (AFUDC) provided a $0.27 per share boost, reflecting ongoing capital projects. These positives were tempered by elevated interest expenses subtracting $0.28 per share, increased depreciation at $0.28 per share, and higher operations and maintenance costs at $0.25 per share. Common equity financing diluted earnings by $0.18 per share, while weather impacts reduced full-year earnings by about $0.043 per share.
Regulatory developments played a pivotal role. Approved rate cases in multiple jurisdictions enabled recovery of investments, including Minnesota’s electric and gas rates, South Dakota’s electric adjustments, and Wisconsin’s settlements. However, wildfire-related charges posed challenges: a $298 million settlement for the Marshall Fire affected GAAP results, and an estimated $430 million loss from the Smokehouse Creek Fire (before insurance) was noted, with $195 million in receivables outstanding.
Capital structure remained balanced, with debt at 59% and equity at 41% by year-end, supporting $3.011 billion in available liquidity. Financing activities included $4.8 billion in long-term debt issuances and $3.34 billion in net equity proceeds, funding a robust capital program.
Operational milestones included completing Phase 2 of the Sherco Solar facility, converting the Harrington coal plant to natural gas, and energizing initial segments of the Colorado Power Pathway transmission project. These initiatives align with Xcel Energy’s clean energy transition, maintaining low customer bills relative to national averages.
Outlook and Strategic Priorities
Looking ahead, Xcel Energy has reaffirmed its 2026 ongoing earnings guidance in the range of $4.04 to $4.16 per share. This projection assumes normal weather conditions, electric sales growth of around 3%, and natural gas sales up by about 1%. Key assumptions include capital rider revenues increasing by $535 million to $545 million, operations and maintenance expenses rising by 3%, depreciation up $350 million to $360 million, and net interest expenses climbing $300 million to $310 million, partially offset by AFUDC equity gains of $140 million to $150 million.
The company anticipates a five-year capital expenditure plan totaling $60 billion from 2026 to 2030, emphasizing transmission, distribution, generation, and renewables. Recent announcements include a major data center customer addition and strategic partnerships with development and supply chain firms to accelerate infrastructure delivery and innovation.
Return on equity for the year was 9.36% on a GAAP basis and 10.38% ongoing, down slightly from prior levels but reflective of disciplined capital allocation. Xcel Energy continues to prioritize affordability, reliability, and sustainability, positioning itself for sustained growth in the evolving energy sector.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, investment recommendations, or endorsements. Readers should conduct their own research and consult qualified professionals before making any decisions based on the content herein. All data and analyses are derived from publicly available information and are subject to change without notice.