(Reuters) – Electric and gas utility DTE Energy beat Wall Street estimates for third-quarter profit on Thursday, as higher supply rates and warmer weather helped performance of its electricity unit.
Shares of the company gained 1% in premarket trading.
On an adjusted basis, the Michigan-based company reported operating profit of $2.22 per share for the three months ended September 30, compared with analysts’ average estimate of $1.88 per share, according to data compiled by LSEG.
WHY IT’S IMPORTANT
U.S. electric companies have been requesting higher customer electricity rates from regulators to fund infrastructure upgrades amid extreme weather events, growing demand from industry electrification and tech sector data center expansion.
Last year, the U.S. saw record rate increases, according to data from Energy Information Administration.
The S&P index tracking utilities jumped 18.4% in the third quarter, compared with a 5.5% rise in the S&P 500.
CONTEXT
The Detroit, Michigan-based company provides electricity to 2.3 million customers in Southeast Michigan and natural gas to 1.3 million customers in Michigan.
The company has invested over $3 billion so far this year to upgrade its electric and gas grids and plans to invest over $4 billion in 2024.
BY THE NUMBERS
Total net income attributable to DTE rose to $460 million in the quarter from $298 million last year.
The company’s electric segment, the largest unit by net income, reported adjusted earnings of $437 million in the quarter compared with $268 million a year ago.
However, the gas segment posted an adjusted loss of $13 million in the third-quarter compared to a loss of $5 million a year ago, partly due to higher operating costs.
The firm reaffirmed its 2024 adjusted profit forecast of $6.54 to $6.83 per share, while analysts expect a profit of $6.70 per share.
(Reporting by Pooja Menon in Bengaluru; Editing by Vijay Kishore)
