On Thursday, CenterPoint Energy (NYSE:CNP) discussed first-quarter financial results during its earnings call. The full transcript is provided below.
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Summary
CenterPoint Energy reported a strong first quarter of 2026 with non-GAAP EPS of $0.56, exceeding GAAP EPS of $0.48.
The company reaffirmed its full-year 2026 non-GAAP EPS guidance of $1.89 to $1.91, representing an 8% growth over 2025.
Significant growth is expected in the Houston Electric segment with a firmly committed load forecast increased to 12.2 gigawatts by 2029.
CenterPoint Energy plans to invest $6.8 billion in 2026 and has de-risked its financing plan, completing 70% of its financing needs.
Advanced manufacturing and data centers are key contributors to load growth, supporting affordability and potentially reducing customer bills.
A major project in Indiana could bring $250 million in savings for customers over 15 years, enhancing affordability and economic growth.
The company expects to finalize a refresh load study to inform future transmission planning by the second half of 2026.
Management remains optimistic about long-term growth, targeting EPS growth at the mid to high end of a 7-9% range annually through 2035.
Full Transcript
OPERATOR
Good morning and welcome to CenterPoint Energy’s first quarter 2026 earnings conference call with senior management. During the Company’s prepared remarks, all participants will be in a listen only mode. There will be a question and answer session after Management’s remarks. To ask a question, please press star 11 on your touch phone keypad. I will now turn the call over to Ben Vallejo, Vice President of Investigations and Corporate Planning. Please go ahead
Ben Vallejo (Vice President of Investigations and Corporate Planning)
Good morning and welcome to CenterPoint’s Q1 2026 earnings conference call. Jason Wells, our Chair and CEO, and Chris Foster, our CFO will discuss the company’s first quarter 2026 results. Management will discuss certain topics that will contain projections and other forward looking information and statements that are based on management’s beliefs, assumptions and information currently available to management. These forward looking statements are subject to risks and uncertainties. Actual results could differ materially based on various factors. As noted in our Form 10Q other SEC filings and our earnings materials, we undertake no obligation to revise or update publicly any forward looking statement other than as required under applicable securities laws. We reported $0.48 per diluted share for the first quarter of 2026 on a GAAP basis. Management will be discussing certain non GAAP measures on today’s call when providing guidance. We use the non GAAP EPS measure of diluted adjusted earnings per share on a consolidated basis referred to as non-GAAP EPS. For information on our guidance methodology and reconciliation of the non GAAP measures used in providing guidance, please refer to our earnings news release and presentation on our website. We use our website to announce material information. This call is being recorded. Information on how to access the replay can be found on our website. Now I’d like to turn it over to Jason.
Jason Wells (Chair and CEO)
Thank you Ben and good morning everyone. On today’s call, I’d like to address four key areas of focus for the quarter. First, I’ll walk through our strong first quarter financial results. Second, I’ll provide an update on our load outlook for Houston Electric, including yet another significant increase in our firmly committed load forecast to 12.2 gigawatts of new industrial load. Third, I will cover how our continued and accelerating growth in the Greater Houston area can provide incremental capital investment opportunities and further support customer affordability. And lastly, I’ll touch on our growing optimism for transformational load growth opportunities for our Indiana Electric Service territory which would similarly provide for incremental capital investment and support customer affordability. I will start with our strong first quarter financial results. This morning we reported non GAAP EPS of 56 cents for the first quarter of 2026. Chris will walk through the details of these results, but I want to highlight that our execution through the first quarter positions U.S. well for the remainder of the year. With that said, we are reiterating our full year 2026 non GAAP EPS guidance of $1.89 to $1.91, which at the midpoint would represent 8% growth over actual 2025 delivered results. As a reminder, we rebase our long term earnings guidance from each year’s actual results. This approach provides our investors with the direct benefit from compounding effect of the earnings we have consistently delivered. In addition, this approach helps contribute to the durability of our earnings profile, underscoring our commitment to delivering value through disciplined execution and sustained growth each and every year. Over the long term, we continue to expect to grow non GAAP EPS at the mid to high end of our 7 to 9% annual guidance range through 2028 and 7 to 9% annually thereafter through 2035. I would now like to provide an update on the accelerating growth our Houston Electric business continues to experience and our strong execution which enables us to take advantage of the growth in the near term. As we shared on the fourth quarter call, we have meaningfully accelerated our load growth outlook, bringing forward our forecast for a 50% increase in peak demand by a full two years. Our conviction in that accelerating timeline was grounded in seven and a half gigawatts, a firmly committed load that we expected to be energized by 2029, including 2 1/2 gigawatts that was already under construction as of our last update. Since then, we have made significant progress in executing against our prior forecast while adding additional customers. As a result, we now have clear line of sight to 12.2 gigawatts of firmly committed load with the team’s disciplined execution. We have already secured ERCOT approval for 3.2 gigawatts of this load. Two and a half gigawatts was approved since our last earnings call alone and within less than 80 days of filing for approval. We expect to submit the remaining 9 gigawatts of projects to ERCOT for approval within the next few weeks. Importantly, this firmly committed load is highly diversified, spanning more than a dozen unique customers across nearly 20 distinct projects. We believe these projects are manageable in size with 90% representing half a gigawatt of demand or less. That, along with our utilization of existing capacity and our customer selection of project sites near substations, allows for quick and efficient interconnections. Our focused Execution over the last few months has also provided us with a clear path to energization. Notably, we are positioned to energize approximately 8 gigawatts of this firmly committed load by 2029, which is 80% of our 10 gigawatt increase we originally forecasted to be energized by the end of 2031. This diversified growth and economic development has another key benefit to the Greater Houston area, which helps us keep electricity delivery charges affordable. The Greater Houston area is no longer an emerging destination to site new data centers. It is now firmly established as a location of choice for some of the world’s largest hyperscalers and developers. However, this is only one facet of Houston’s multidimensional growth. The region’s growth is being propelled by significant investments in life sciences, energy, energy exports and advanced manufacturing. With this growth comes new jobs and an influx of new residents which has fueled the 2% annual residential growth the area has experienced for the last few decades. The expansion of the economy and increase in population have significant affordability benefits for our customers. Notably, we expect that utilizing 10 gigawatts of existing system capacity could provide approximately $4 billion in aggregate savings for Texas residential and commercial customers over the next 10 years, supporting affordability and creating headroom for future customer driven investments. This affordability profile is one that very few areas in the country can offer as our charges are 11% below the national average and the lowest in ERCOT. Looking ahead, we believe this growth will continue for years to come, requiring the further expansion of our system to support growth beyond the near term. We are making steady progress on a refresh load study that will inform our transmission planning process and we expect to complete the study later this year in Indiana. We are increasingly confident in our ability to secure potentially transformational opportunities to support local economic growth and address affordability. We continue to make considerable progress in our conversations with a large load customer on a project that would represent our single largest load in our Southern Indiana service territory with substantial upside for additional growth. Beyond the significant economic development benefits this opportunity would bring to the local community, it represents a powerful lever to enhance affordability for our customers. We estimate that this initial incremental load could enable $250 million in savings for residential customers over 15 years, meaningfully reducing customer bills with the opportunity for even greater savings as potential upside for growth materializes. In closing, we continue to believe we have one of the most tangible and executable long term growth plans in the industry. We are uniquely positioned to move at the speed of business to execute on near term customer driven opportunities while also delivering our service affordably. We are laser focused on making longer term investments to enhance growth across all of our service territories while also improving customer outcomes. With that, I’ll turn it over to Chris to cover their financials in more detail.
Chris Foster (Chief Financial Officer)
Thanks Jason. This morning I will cover four areas of focus. First, the details of our strong first quarter financial results and how they position us for the rest of the year. Second, I will provide a brief regulatory update in our progress with respect to timely recovery of our capital investments through the filing of our interim capital trackers. Third,, I will touch on our planned capital deployment in 2026 which is right on track as we target to invest $6.8 billion this year for the benefit of our customers and communities. And finally, I will provide an update on our derisked financing plan, balance sheet health and credit metrics now starting with our strong financial results on slide 6. On a GAAP EPS basis we reported 48 cents for the first quarter of 2026. On a non-GAAP EPS basis we reported 56 cents for the quarter. Our non GAAP EPS excludes the impacts from the tax gain and other expenses related to the sale of our Ohio LDC which is on track to close in the fourth quarter of this year. In addition, we continue to exclude the impacts of removing our temporary generation units from base rates as they are no longer part of our regulated utility business. As a reminder, we expect to start marketing these units for either a sublease or sale later this year in anticipation of getting those units back no later than spring of next year. Taking a closer look at the Drivers of our first quarter earnings growth and rate recovery contributed $0.11 when compared to the same quarter last year driven by a full quarter impact of updated rates reflecting the interim filing mechanisms that went into effect late last year. Weather and usage were $0.02 unfavorable when compared to the comparable quarter last year driven by milder weather across our Texas and Indiana service territories. Additionally, higher interest expense was $0.04 unfavorable, reflecting new issuances slightly offset by lower commercial paper balances and favorable pricing on the convertible debt we issued during the quarter. O and M was flat for the quarter as we continue to accelerate our peer leading vegetation management program to enhance the customer experience and improve customer outcomes during severe weather events. Lastly, the absence of earnings from our Louisiana and Mississippi businesses post divestiture resulted in $0.05 of unfavorability when compared to the first quarter of 2025. The divested rate base has already been replaced by the acceleration of investments in our Texas businesses. These results reinforce our confidence in delivering on our full year 2026 non-GAAP EPS guidance range of $1.89 to $1.91. The accelerated growth that Jason highlighted and the work we’ve done to de risk our financing needs and more efficiently execute are additional tailwinds that further position us well to deliver and could continue to provide upside as we move through the year. Over the long term, we continue to expect to grow non GAAP EPS at the mid to high end of our 7 to 9% long term annual guidance range through 2028 and 7 to 9% annually thereafter through 2035. Now turning to a broader regulatory update As a reminder, we continue to recover approximately 85% of our investments through capital trackers, several of which we filed this quarter. I’ll start with Houston Electric. In February, we submitted the first of our two permitted filings of our distribution capital recovery factor, or DCRF, and our transmission cost of service tracker, or TCOs. The DCRF filing requested a revenue requirement increase of approximately $108 million capturing incremental distribution investments over the last six months. I’m pleased to share that we entered into a settlement agreement earlier this month and requested new rates to be effective in June ahead of our planned timing. The TCOS filing requested a revenue requirement increase of approximately $36 million incorporating transmission investments made between July and December of last year. During this quarter, the filing was approved and new rates went into …
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