-CenterPoint Energy, Inc. (NYSE: CNP) or “CenterPoint” today reported its second quarter 2024 earnings, reaffirmed its 2024 earnings guidance, and provided an update on its response to Hurricane Beryl, including the actions the company is taking to improve its emergency preparedness and response and customer communications.
“We are privileged to serve one of the most dynamic cities in the United States. We understand with that privilege comes the responsibility of supporting and communicating clearly with our customers during emergency events such as Hurricane Beryl,” said CenterPoint President and CEO Jason Wells.
CenterPoint’s mission is building and operating the most resilient coastal grid anywhere in the country with best-in-class communications. The company’s plan, which was submitted to the Public Utility Commission of Texas last week, focuses on three classes of priorities and details a series of initial actions that the company will take both immediately and long-term, including:
- Resiliency Investments: By accelerating adoption of the latest construction standards, retrofitting existing assets on an accelerated basis, and using predictive modeling, AI and other advanced technologies, CenterPoint will harden its distribution system and speed restoration. The company will also take action to protect its electrical assets by nearly doubling the size of its vegetation management crews and targeting higher risk vegetation to address the number one cause of damage and outages in Hurricane Beryl.
- Best-in-Class Customer Communications: To ensure customers have the information they need when they need it, CenterPoint will launch a new and more customer-oriented outage tracker by August 1. This online tool will provide better and more complete information during storms and is designed to handle increased demand during such events.
- Strengthened Partnerships: Effective emergency preparedness and response requires close coordination with government officials. CenterPoint will hire a seasoned emergency response leader to help the company rapidly accelerate its planning capabilities and develop close community partnerships to ease the burden of storm events on more vulnerable communities.
“We have already begun implementing solutions to improve customer outcomes, but we have more work to do. We will be taking further steps as we continue to learn from engagement with customers, community stakeholders and regulators, as well as complete broader after-action reviews,” said Wells.
CenterPoint reported income available to common shareholders of $228 million on a GAAP basis and $234 million on a non-GAAP basis, or $0.36 per diluted share on both a GAAP and non-GAAP basis for the second quarter of 2024. The company will discuss its quarterly results on its scheduled earnings call.
Earnings Outlook
In addition to presenting its financial results in accordance with GAAP, including presentation of income (loss) available to common shareholders and diluted earnings (loss) per share, CenterPoint provides guidance based on non-GAAP income and non-GAAP diluted earnings per share. Generally, a non-GAAP financial measure is a numerical measure of a company’s historical or future financial performance that excludes or includes amounts that are not normally excluded or included in the most directly comparable GAAP financial measure.
Management evaluates CenterPoint’s financial performance in part based on non-GAAP income and non-GAAP earnings per share. Management believes that presenting these non-GAAP financial measures enhances an investor’s understanding of CenterPoint’s overall financial performance by providing them with an additional meaningful and relevant comparison of current and anticipated future results across periods. The adjustments made in these non-GAAP financial measures exclude items that management believes do not most accurately reflect the company’s fundamental business performance. These excluded items are reflected in the reconciliation tables of this news release, where applicable. CenterPoint’s non-GAAP income and non-GAAP diluted earnings per share measures should be considered as a supplement to, and not as a substitute for, or superior to, income available to common shareholders and diluted earnings per share, which respectively are the most directly comparable GAAP financial measures. These non-GAAP financial measures also may be different than non-GAAP financial measures used by other companies.
2023 and 2024 non-GAAP EPS; 2024 non-GAAP EPS guidance range
- 2023 and 2024 non-GAAP EPS and 2024 non-GAAP EPS guidance excludes:
- Earnings or losses from the change in value of CenterPoint’s 2.0% Zero-Premium Exchangeable Subordinated Notes due 2029 (“ZENS”) and related securities; and
Gain and impact, including related expenses, associated with mergers and divestitures, such as the divestiture of Energy Systems Group, LLC and our Louisiana and Mississippi natural gas local distribution company (“LDC”) businesses.
In providing 2023 and 2024 non-GAAP EPS and 2024 non-GAAP EPS guidance, CenterPoint does not consider the items noted above and other potential impacts such as changes in accounting standards, impairments, or other unusual items, which could have a material impact on GAAP reported results for the applicable guidance period. The 2024 non-GAAP EPS guidance ranges also consider assumptions for certain significant variables that may impact earnings, such as customer growth and usage including normal weather, throughput, recovery of capital invested, effective tax rates, financing activities and related interest rates, and regulatory and judicial proceedings. To the extent actual results deviate from these assumptions, the 2024 non-GAAP EPS guidance ranges may not be met, or the projected annual non-GAAP EPS growth rate may change. CenterPoint is unable to present a quantitative reconciliation of forward-looking non-GAAP diluted earnings per share without unreasonable effort because changes in the value of ZENS and related securities, future impairments, and other unusual items are not estimable and are difficult to predict due to various factors outside of management’s control.