Xcel Energy tops second-quarter profit estimates on higher infrastructure investment recovery

Utility Xcel Energy beat Wall Street expectations for second-quarter profit on Thursday, as higher recovery of electric infrastructure investments helped offset rising financing costs.

Utility companies have benefited from a surge in electricity demand amid the AI-driven data center boom even as they grapple with elevated interest rates that raise costs to fund and maintain infrastructure.

• On an adjusted basis, the Minneapolis, Minnesota-based company reported a profit of 93 cents per share for the three months ended June 30, above analysts' average estimate of 78 cents per share, according to data compiled by LSEG.
• The utility's net income came in at $586 million or 93 cents per share, a 32% rise from $444 million or 75 cents per share a year ago.
• Shares of the company were marginally down in noon trading.
• Xcel recovered much of its electric infrastructure investments through regulator-approved rates and riders during the quarter, helping offset costs tied to grid upgrades and power infrastructure expansion.
• However, revenue in its electric segment fell 4.7% to $2.74 billion, while revenue at its natural gas division dropped to $365 million from $396 million a year earlier.

On a call with analysts, Xcel said it expects to secure an additional 4 gigawatts of data center load by the end of 2027, with at least 1 gigawatt of that new load expected to materialize by the end of this year, underscoring robust demand from AI-driven data centers.

The company also flagged more than $10 billion in incremental investment opportunities beyond its existing five-year base capital plan, pointing to further upside from data center growth, transmission projects and renewables buildout.

Xcel said it plans to release an updated capital and financing plan in the third quarter, extending its investment outlook through 2027-2031.