Key Takeaways:
CenterPoint Energy Inc. reported second-quarter adjusted earnings of $0.40 per share, beating the $0.37 consensus estimate by 8.1 percent, as revenue rose 10.7 percent to $2.15 billion.
"The midpoint of our guidance range represents 8 percent growth from 2025 delivered results," Chair and Chief Executive Officer Jason Wells said. The company reaffirmed its full-year non-GAAP EPS guidance of $1.89 to $1.91.
Revenue of $2.15 billion topped the $2.11 billion consensus by 1.8 percent, while operating income climbed to $534 million from $417 million a year earlier. Higher rate recovery added $0.10 per share year over year, reflecting updated rates and interim filing mechanisms, Chief Financial Officer Chris Foster said. Operating and maintenance expense was $0.02 favorable because of efficiencies in the vegetation-management program, while milder weather in Texas and Indiana reduced results by $0.01.
CenterPoint raised its 10-year capital investment plan by $1.2 billion to $66.7 billion, including $800 million for system upgrades tied to 14 GW of eligible large-load projects in Texas and $400 million for the Downtown Houston Revitalization Project. The company submitted more than 17 GW of prospective large-load projects through ERCOT's Batch Zero process, with 14 GW remaining eligible — representing more than 65 percent of Houston Electric's current 21-GW system peak. Approximately 10 GW have both required studies approved and qualify for base-load designation, while another 4 GW have one study approved and may qualify as studied load.
CenterPoint expects nearly all 14 GW to be energized by the end of 2030, with 3 GW expected to connect in 2027. The projects are backed by signed Facilities Extension Agreements and approximately $900 million in customer cash commitments. Wells said system upgrades can be completed at less than $60 million per gigawatt, and the company anticipates an additional 2 GW of distribution-level demand from advanced manufacturing and population growth in the greater Houston area.
The company estimates the large-load projects could save residential and commercial customers more than $5 billion over the next decade, as large-load customers absorb system costs that would otherwise fall on smaller ratepayers. Demand-charge cash flow is expected to provide roughly $6 million per GW per month as new load comes online. Foster said the revised capital plan does not require additional equity financing, citing existing funding capacity and the expected Oct. 1 closing of the Ohio Gas sale.
Houston Electric's rate base is expected to grow at a compound annual rate of more than 18 percent over the next three years. CenterPoint's adjusted FFO-to-debt ratio under Moody's methodology stood at 13.4 percent at the end of the second quarter, nearly 100 basis points higher than in the first quarter.
The guidance raise and $66.7 billion capex plan show management's confidence in Texas data center and industrial demand driving multiyear growth. Investors will watch the pace of ERCOT's Batch Zero allocation process, expected to conclude in April 2027, and the timing of the 3 GW of connections planned for next year.
This article is for informational purposes only and does not constitute investment advice.
