Xcel Energy's quarter profit forecast is missed due to higher interest costs and expenses

Xcel Energy, a U.S. utility, missed its third-quarter profit estimate on Thursday due to higher interest costs and operating expenses.

Interest rates that are higher for longer can increase the cost of maintaining and constructing infrastructure, such as electrical grids.

Minneapolis-based Xcel increased its total interest charges to $384 millions in the three months ending September 30 from $326million a year ago.

The company's quarterly operating and maintenance costs also increased 5.6%, to $692 millions.

The utility increased its capital investment plan by $60 billion over the next five-years to meet the increasing demand for power and to make necessary investments to strengthen transmission and distribution systems.

Utilities are adding billions to their capital budgets to meet the demands of data centers for more power to support AI-related tasks.

Xcel announced in September that it had reached agreements with all parties to settle claims related to 2021's Marshall Fire in Colorado.

The company said that its unit, Public Service Company of Colorado (PSC), is expected to pay approximately $640 million in accordance with these agreements.

Xcel offers electric service to 3.9 million customers in eight Western and Midwestern States and natural gas to 2.2 millions customers.

The operating revenue for its electric division rose 7.2%, to $3.64 Billion. For its natural gas division, it grew to $264 MILLION from $239 MILLION a year earlier.

LSEG data shows that Xcel has also set its 2026 adjusted earnings at $4.04 to $4.16% per share. The midpoint is below the average analyst estimate of $4.12 a piece.

The company's adjusted third-quarter profits came in at just $1.24 per share, falling short of the $1.32 expected. Reporting by Pooja in Bengaluru, editing by Shreya biswas

(source: Reuters)