Xcel Energy, a utility holding company based in Minneapolis, Minnesota, has posted a rise in third-quarter profit on Friday. The company benefited from lower operating expenses, which led to a 13% decline in operating expenses to $2.75 billion in the three months ended Sept. 30. Xcel said net income inched up to $656 million, or $1.19 per share, for the July-September quarter, compared to $649 million, or $1.18 per share, in the year-ago quarter. Peer CMS Energy also posted a rise in third-quarter profit as utility companies take cost-cutting measures to counter inflation and rising interest rates.
However, Xcel posted an adjusted income of $1.23 per share, missing analysts’ average estimate of $1.27, according to LSEG data. The U.S. Federal Reserve’s interest rate hikes have led to an increase in borrowing costs for businesses, which has impacted Xcel’s interest charges and financing costs. Xcel’s interest charges and financing costs rose 7.6% to $255 million. Additionally, Xcel narrowed its annual earnings forecast to the range of $3.32 to $3.37 per share from $3.30 to $3.40, while analysts were expecting $3.36 per share .
Xcel Energy’s total operating expenses declined 13% year over year to $2,747 million .Operating income, which is the profit realized from a business’s operations after deducting operating expenses, decreased by almost 1% to $915 million from the prior-year quarter’s level . Total interest charges and financing costs rose 7.6% to $255 million from the prior-year quarter’s reported figure.
The U.S. Federal Reserve’s interest rate hikes have made borrowing more expensive for businesses and have impacted Xcel’s interest charges and financing costs. However, the company’s cost-cutting measures have helped it post higher Q3 profits on lower operating expenses.