WEC Lifts Profit as Operating Margin Expands
Second-quarter revenue increased 2.6% to $2.062 billion as operating income outpaced sales growth.
WEC Energy Group (WEC), the electric and natural-gas utility, reported a 21.9% increase in second-quarter net income as lower cost of sales and higher affiliate earnings offset largely flat electricity deliveries. Diluted earnings rose 19.7% to $0.91 a share.
The quarter marked a widening gap between profit and revenue growth. Operating income increased 6.9% to $432.8 million, lifting operating margin to about 21.0% from 20.1% a year earlier.
Revenue rose to $2.062 billion from $2.010 billion, while net income attributable to common shareholders increased to $299.2 million from $245.4 million. First-half revenue grew 6.5%, slowing from 15.9% growth in the first half of 2024, while first-half diluted earnings increased 11.3% to $3.36 a share.
Cost of sales declined 2.6% to $555.6 million, helping absorb increases in other operation and maintenance expense and depreciation. Equity earnings from transmission affiliates climbed 20.6% to $62.6 million, while other income more than doubled to $61.5 million, contributing to a 25.0% rise in pretax income.
Retail electricity deliveries were essentially unchanged from a year earlier, after growing 1.1% in the first quarter. Residential use declined 1.1%, while large commercial and industrial consumption increased 0.9%, down from 2.7% growth in the preceding quarter. The latest measures excluded Wisconsin Very Large Customers, and the reported-deliveries comparison also excluded an iron ore mine.
Weather-normalized retail electricity deliveries rose 1.2%, holding close to the first quarter's 1.3% pace despite flat reported demand. Small commercial and industrial consumption declined 0.2%, reversing increases in both the first quarter and the year-earlier period.
WEC reaffirmed its 2025 earnings guidance of $5.51 to $5.61 a share for a second consecutive quarter. The range has remained unchanged since the company presented it with fourth-quarter 2024 results.
First-half capital expenditures increased 35.9% to $2.080 billion, outpacing a 9.7% rise in operating cash flow to $2.211 billion. The spending increase left operating cash flow only modestly above capital investment as WEC maintained its full-year earnings range.