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WEC Energy Group posts 2023 results

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WEC Energy Group reported a net income of $1.3 billion for 2023, with adjusted earnings rising to $4.63 per share, an increase of 4 percent over 2022. However, consolidated revenues for the full year were $8.9 billion, down $704.4 million from 2022. The company also experienced decreases in electricity and natural gas deliveries. Despite these challenges, the board of directors declared a quarterly cash dividend of 83.5 cents per share, marking the 21st consecutive year of higher dividends for shareholders.
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The reported net income and earnings per share (EPS) of WEC Energy Group provide critical insight into the company's financial health and operational efficiency. While the net income for 2023 shows a decrease from 2022, the adjusted EPS indicates an increase. This suggests that, despite the non-cash charge related to capital investments disallowed by the Illinois Commerce Commission (ICC), the company's underlying profitability has improved. Investors should consider the implications of the ICC's decision as it may affect future capital expenditure strategies and regulatory relationships.

Furthermore, the decline in consolidated revenues and reduced electricity and natural gas deliveries could be indicative of broader economic trends or increased competition. These factors could potentially influence the company's market share and pricing power. The increase in dividends for the 21st consecutive year reflects a strong commitment to shareholder returns, which could be attractive to income-focused investors.

The decrease in retail deliveries of electricity and natural gas deliveries in Wisconsin, excluding natural gas used for power generation, is a critical data point. It highlights a potential shift in energy consumption patterns, possibly due to increased energy efficiency, consumer conservation efforts, or a transition to alternative energy sources. This trend could have long-term strategic implications for WEC Energy Group's business model and investment in infrastructure.

Additionally, the mention of weather-normal basis adjustments is essential for understanding the true demand for energy, independent of variable weather conditions. This metric provides a more stable view of energy consumption and can be used to forecast future energy needs and guide infrastructure development.

Investors should note the company's focus on reliability, customer satisfaction, financial discipline and environmental stewardship. These pillars are increasingly important to consumers and may play a significant role in brand loyalty and the company's competitive edge. However, the reported decrease in residential, small and large commercial and industrial electricity use may suggest a need for WEC Energy Group to innovate and adapt to changing market demands.

The company's growth opportunities, as mentioned by the executive chairman, should be examined in the context of the energy sector's evolution, including the rise of renewable energy sources and the potential for regulatory changes. Investors should assess how well-positioned WEC Energy Group is to capitalize on these opportunities and whether their strategic initiatives align with industry trends.

MILWAUKEE, Feb. 1, 2024 /PRNewswire/ -- WEC Energy Group (NYSE: WEC) today reported net income based on generally accepted accounting principles (GAAP) of $1.3 billion, or $4.22 per share, for 2023. This compares to earnings of $1.4 billion, or $4.45 per share, for 2022.

Full-year 2023 earnings include a non-cash charge of 41 cents per share related to previous capital investments that were disallowed by the Illinois Commerce Commission. Excluding this charge, WEC Energy Group's adjusted earnings for 2023 rose to $4.63 per share — an increase of 4 percent over earnings in 2022.

For the fourth quarter of 2023, WEC Energy Group recorded net income based on GAAP of $218.5 million, or 69 cents per share. This compares to earnings of $252.7 million, or 80 cents per share, for the fourth quarter of 2022.

Excluding the non-cash charge, WEC Energy Group's adjusted earnings for the fourth quarter of 2023 totaled $1.10 per share.

Consolidated revenues for the full year were $8.9 billion, down $704.4 million from revenues in 2022.

"We delivered another year of strong results in 2023, despite an historically warm start to the year and a disappointing regulatory decision in Illinois," said Gale Klappa, executive chairman. "We have significant growth opportunities ahead.  And we will continue to compound value with our focus on the fundamentals — reliability, customer satisfaction, financial discipline, and environmental stewardship."

For the full year, retail deliveries of electricity — excluding the iron ore mine in Michigan's Upper Peninsula — were down by 2.6 percent.

Electricity consumption by small commercial and industrial customers was 1.1 percent lower during 2023. Electricity use by large commercial and industrial customers — excluding the iron ore mine — declined by 3.2 percent.

Residential electricity use decreased by 3.6 percent.

On a weather-normal basis, retail deliveries of electricity during 2023 — excluding the iron ore mine — were down by 1.0 percent.

Natural gas deliveries in Wisconsin, excluding natural gas used for power generation, decreased by 9.1 percent during 2023. On a weather-normal basis, natural gas deliveries were 2.4 percent lower during the year.

On Jan. 18, the board of directors declared a quarterly cash dividend of 83.5 cents per share on the company's common stock, an increase of 7 percent over the previous dividend rate.  This marks the 21st consecutive year that the company will reward its shareholders with higher dividends. 

Earnings per share listed in this news release are on a fully diluted basis.

Non-GAAP Earnings Measures

A reconciliation of GAAP net income and earnings per share to adjusted net income and earnings per share is included below for the full year and quarter ended Dec. 31, 2023. There were no adjustments to GAAP net income or earnings per share in 2022.



Net Income

(in millions)


2023 Full Year


2023 Q4

WEC Energy Group GAAP


$                   1,331.7


$                      218.5

Impairment related to ICC disallowances pre-tax


178.9


178.9

     Tax impact


(49.1)


(49.1)

WEC Energy Group Adjusted net income


$                   1,461.5


$                      348.3

 



Earnings Per Share



2023 Full Year


2023 Q4

WEC Energy Group GAAP


$                        4.22


$                        0.69

Impairment related to ICC disallowances


0.41


0.41

WEC Energy Group Adjusted earnings per share


$                        4.63


$                        1.10






Diluted averages shares outstanding (millions)


315.9


315.8

We have provided adjusted earnings (non-GAAP earnings) in this news release as a complement to, and not as an alternative to, reported earnings presented in accordance with GAAP. The adjusted earnings exclude a non-cash impairment charge related to certain previously incurred capital costs that were disallowed by the ICC. The ICC's disallowance of costs of this nature is highly unusual and not indicative of WEC Energy Group's operating performance. Therefore, we believe that the presentation of adjusted earnings is relevant and useful to investors to understand WEC Energy Group's operating performance. Management uses such measures internally to evaluate the company's performance and manage its operations.

Conference call

A conference call is scheduled for 1 p.m. Central time, Thursday, Feb. 1. The call will review 2023 earnings and the company's outlook for the future.

All interested parties, including stockholders, news media and the general public, are invited to listen. Access the call at 888-330-2443 up to 15 minutes before it begins. The number for international callers is 240-789-2728. The conference ID is 3088105.

Conference call access also is available at wecenergygroup.com. Under 'Webcasts,' select 'Q4 Earnings.' In conjunction with this earnings announcement, WEC Energy Group will post on its website a package of detailed financial information on its 2023 performance. The materials will be available at 6:30 a.m. Central time, Thursday, Feb. 1.

Replay

A replay will be available on the website and by phone. Access to the webcast replay will be available on the website about two hours after the call. Access to a phone replay also will be available approximately two hours after the call and remain accessible through Feb. 15, 2024. Domestic callers should dial 800-770-2030. International callers should dial 647-362-9199. The replay conference ID is 3088105.

WEC Energy Group (NYSE: WEC), based in Milwaukee, is one of the nation's premier energy companies, serving 4.7 million customers in Wisconsin, Illinois, Michigan and Minnesota. 

The company's principal utilities are We Energies, Wisconsin Public Service, Peoples Gas, North Shore Gas, Michigan Gas Utilities, Minnesota Energy Resources and Upper Michigan Energy Resources. Another major subsidiary, We Power, designs, builds and owns electric generating plants. In addition, WEC Infrastructure LLC owns a growing fleet of renewable generation facilities in states ranging from South Dakota to Texas.

WEC Energy Group (wecenergygroup.com) is a Fortune 500 company and a component of the S&P 500. The company has approximately 35,000 stockholders of record, 7,000 employees and more than $43 billion of assets.

Forward-looking statements

Certain statements contained in this press release are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based upon management's current expectations and are subject to risks and uncertainties that could cause our actual results to differ materially from those contemplated in the statements. Readers are cautioned not to place undue reliance on these statements. Forward-looking statements include, among other things, statements concerning management's expectations and projections regarding earnings, earnings growth rates, dividend payments and future results. In some cases, forward-looking statements may be identified by reference to a future period or periods or by the use of forward-looking terminology such as "anticipates," "believes," "estimates," "expects," "forecasts," "guidance," "intends," "may," "objectives," "plans," "possible," "potential," "projects," "should," "targets," "will" or similar terms or variations of these terms.

Factors that could cause actual results to differ materially from those contemplated in any forward-looking statements include, but are not limited to: general economic conditions, including business and competitive conditions in the company's service territories; timing, resolution and impact of rate cases and other regulatory decisions; the company's ability to continue to successfully integrate the operations of its subsidiaries; availability of the company's generating facilities and/or distribution systems; unanticipated changes in fuel and purchased power costs; key personnel changes; unusual, varying or severe weather conditions; continued industry restructuring and consolidation; continued advances in, and adoption of, new technologies that produce power or reduce power consumption; energy and environmental conservation efforts; electrification initiatives, mandates and other efforts to reduce the use of natural gas; the company's ability to successfully acquire and/or dispose of assets and projects and to execute on its capital plan; terrorist, physical or cyber-security threats or attacks and data security breaches; construction risks; labor disruptions; equity and bond market fluctuations; changes in the company's and its subsidiaries' ability to access the capital markets and shareholder approval of related proposals; changes in tax legislation or our ability to use certain tax benefits and carryforwards; federal, state, and local legislative and regulatory changes, including changes in rate-setting policies or procedures and environmental standards, the enforcement of these laws and regulations or permit conditions and changes in the interpretation of regulations by regulatory agencies; supply chain disruptions; inflation; political or geopolitical developments, including impacts on the global economy, supply chain and fuel prices, generally, from ongoing global conflicts; the impact from any health crises, including epidemics and pandemics; current and future litigation and regulatory investigations, proceedings or inquiries; changes in accounting standards; the financial performance of the American Transmission Company as well as projects in which the company's energy infrastructure business invests; the ability of the company to obtain additional generating capacity at competitive prices; goodwill and its possible impairment; and other factors described under the heading "Factors Affecting Results, Liquidity and Capital Resources" in Management's Discussion and Analysis of Financial Condition and Results of Operations and under the headings "Cautionary Statement Regarding Forward-Looking Information" and "Risk Factors" contained in the company's Form 10-K for the year ended December 31, 2022, and in subsequent reports filed with the Securities and Exchange Commission. Except as may be required by law, the company expressly disclaims any obligation to publicly update or revise any forward-looking information.

Tables follow

 

WEC ENERGY GROUP, INC.

CONSOLIDATED INCOME STATEMENTS (Unaudited)


Three Months Ended


Year Ended



December 31


December 31

(in millions, except per share amounts)


2023


2022


2023


2022

Operating revenues


$                   2,217.5


$                   2,558.4


$                   8,893.0


$                   9,597.4










Operating expenses









Cost of sales


761.1


1,235.4


3,191.2


4,358.9

Other operation and maintenance


553.9


580.3


2,100.5


1,938.0

Impairment related to Illinois Commerce Commission disallowances


178.9



178.9


Depreciation and amortization


324.5


284.6


1,264.2


1,122.6

Property and revenue taxes


57.7


77.7


250.2


253.7

Total operating expenses


1,876.1


2,178.0


6,985.0


7,673.2










Operating income


341.4


380.4


1,908.0


1,924.2










Equity in earnings of transmission affiliates


45.4


46.3


177.5


194.7

Other income, net


46.8


34.7


177.7


128.8

Interest expense


193.5


150.2


726.9


515.1

Other expense


(101.3)


(69.2)


(371.7)


(191.6)










Income before income taxes


240.1


311.2


1,536.3


1,732.6

Income tax expense


21.6


59.0


204.6


322.9

Net income


218.5


252.2


1,331.7


1,409.7










Preferred stock dividends of subsidiary


0.3


0.3


1.2


1.2

Net (income) loss attributed to noncontrolling interests


0.3


0.8


1.2


(0.4)

Net income attributed to common shareholders


$                      218.5


$                      252.7


$                   1,331.7


$                   1,408.1










Earnings per share









Basic


$                        0.69


$                        0.80


$                        4.22


$                        4.46

Diluted


$                        0.69


$                        0.80


$                        4.22


$                        4.45










Weighted average common shares outstanding









Basic


315.4


315.4


315.4


315.4

Diluted


315.8


315.9


315.9


316.1










Dividends per share of common stock


$                    0.7800


$                    0.7275


$                    3.1200


$                    2.9100

 

WEC ENERGY GROUP, INC.

CONSOLIDATED BALANCE SHEETS (Unaudited)


December 31,


December 31,

(in millions, except share and per share amounts)


2023


2022

Assets





Current assets





Cash and cash equivalents


$                        42.9


$                        28.9

Accounts receivable and unbilled revenues, net of reserves of $193.5 and $199.3, respectively


1,503.2


1,818.4

Materials, supplies, and inventories


775.2


807.1

Prepaid taxes


173.9


201.8

Other prepayments


76.8


69.8

Other


223.7


261.7

Current assets


2,795.7


3,187.7






Long-term assets





Property, plant, and equipment, net of accumulated depreciation and amortization of $11,073.1 and $10,383.8, respectively


31,581.5


29,113.8

Regulatory assets (December 31, 2023 and December 31, 2022 include $85.9 and $92.4, respectively, related to WEPCo Environmental Trust Finance I, LLC)


3,249.8


3,264.6

Equity investment in transmission affiliates


2,005.9


1,909.2

Goodwill


3,052.8


3,052.8

Pension and OPEB assets


870.9


916.7

Other


383.1


427.3

Long-term assets


41,144.0


38,684.4

Total assets


$                 43,939.7


$                 41,872.1






Liabilities and Equity





Current liabilities





Short-term debt


$                   2,020.9


$                   1,647.1

Current portion of long-term debt (December 31, 2023 and December 31, 2022 include $9.0 and $8.9, respectively, related to WEPCo Environmental Trust Finance I, LLC)


1,264.2


881.2

Accounts payable


896.6


1,198.1

Other


933.1


884.6

Current liabilities


5,114.8


4,611.0






Long-term liabilities





Long-term debt (December 31, 2023 and December 31, 2022 include $85.3 and $94.1, respectively, related to WEPCo Environmental Trust Finance I, LLC)


15,512.8


14,766.2

Deferred income taxes


4,918.5


4,625.6

Deferred revenue, net


356.4


370.7

Regulatory liabilities


3,697.7


3,735.5

Intangible liabilities


594.8


335.4

Environmental remediation liabilities


463.7


499.6

Asset retirement obligations


374.2


479.3

Pension and OPEB obligations


176.0


171.6

Other


659.3


660.6

Long-term liabilities


26,753.4

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FAQ

What was WEC Energy Group's net income for 2023?

WEC Energy Group reported a net income of $1.3 billion for 2023.

How much did WEC Energy Group's adjusted earnings rise in 2023?

WEC Energy Group's adjusted earnings for 2023 rose to $4.63 per share, an increase of 4 percent over 2022.

What was the change in consolidated revenues for WEC Energy Group in 2023?

Consolidated revenues for WEC Energy Group for the full year were $8.9 billion, down $704.4 million from 2022.

How did WEC Energy Group's electricity deliveries change in 2023?

WEC Energy Group experienced decreases in electricity deliveries, with retail deliveries down by 2.6 percent and residential electricity use decreasing by 3.6 percent.

What was the quarterly cash dividend declared by WEC Energy Group?

The board of directors declared a quarterly cash dividend of 83.5 cents per share on the company's common stock, an increase of 7 percent over the previous dividend rate.

WEC Energy Group, Inc.

NYSE:WEC

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25.91B
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79.88%
2.84%
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MILWAUKEE