Xcel Energy reported fourth-quarter earnings of $189 million on revenues of $2.8 billion Wednesday, falling short of Wall Street expectations.

On a per-share basis, the Minneapolis-based company said it had net income of 37 cents. Earnings, adjusted for pretax expenses, came to 42 cents per share.

The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of 43 cents per share.

For the year, Xcel reported profit of $1.15 billion, or $2.25 per share. Revenue was reported as $11.4 billion.

Chief Financial Officer Bob Frenzel told investors the most significant drivers of the increased earnings were higher electric and natural gas margins, largely due to rate hikes, and lower taxes resulting from wind energy tax credits.

State regulators approved electric and natural gas rate increases of 3.2 and 3.9 percent for customers of Xcel’s Wisconsin subsidiary in 2017. Rate increases of 1.4 and 8.3 percent were approved for 2018.

Frenzel said overall electricity sales increased by 0.1 percent in 2017, while natural gas sales grew by 2.7 percent, both driven primarily by the commercial and industrial sectors.

Growth in the customer base was largely offset by customers using less energy, particularly in the residential sector.

CEO Ben Fowke said the tax reform bill passed by Congress last year will save the company some $1.3 billion during the next five years.

“We believe that tax reform is beneficial to our customers and will result in lower revenue requirements, which provides the opportunity to reduce customer bills, make investments in areas important to our customers and take actions to preserve our credit ratings,” Fowke said during a conference call.

Regulators in Minnesota and Wisconsin are working on plans to direct what investor-owned utilities do with the savings.

Xcel expects full-year earnings in the range of $2.37 to $2.47 per share.

Xcel shares have fallen 11 percent since the beginning of the year, while the Standard & Poor’s 500 index has risen roughly 1 percent. The stock has climbed 3 percent in the last 12 months.

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Reporter

Rhymes with Lubbock. La Crosse Tribune reporter and data geek. Covers energy, transportation and the environment, among other things. Call him at 608-791-8217.

(1) comment

Redwall

Does the record profit mean its customers will not see yet another rate increase next year? Is the Public Service Commission listening?

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