• Consolidated Earnings: Exceeded guidance with $2.19 per share for 2024.
• Electric Company Earnings: $2.33 per share for 2024.
• Holding Company Loss: $0.14 per share for 2024.
• Net Income: $442 million for 2024, up from $417 million in 2023.
• Load Growth: 7.6% weather normalized load growth in 2024.
• Customer Growth: 1.2% increase in 2024.
• Residential Load Growth: 2.4% increase in 2024.
• Commercial Load Growth: 21.4% increase in 2024.
• 2025 Earnings Guidance: Midpoint set at $2.27 per share, 7% higher than 2024's original midpoint.
• Long-term EPS Growth Rate: 5% to 7% annually through 2029.
• Balance Sheet: FFO to debt forecasted at approximately 17% with no need for external equity issuances.
• Debt Issuance: Up to $350 million anticipated in the first half of 2025.

• Warning! GuruFocus has detected 10 Warning Signs with OGE.

Release Date: February 19, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• OGE Energy Corp (NYSE:OGE) reported consolidated earnings for 2024 that exceeded the top end of their guidance, with $2.19 per share, driven by strong load growth and operational efficiencies.
• The company added more than 10,000 customers in 2024, reflecting robust customer growth and economic development in their service areas.
• OGE Energy Corp (NYSE:OGE) achieved a significant reduction in SAIDI numbers, indicating improved grid reliability and customer service.
• The company is constructing nearly 450 megawatts at Horseshoe Lake and an additional 100 megawatts for Tinker Air Force Base, showcasing their commitment to expanding generation capacity.
• OGE Energy Corp (NYSE:OGE) maintained a strong safety record in 2024, underscoring their commitment to a safety-first culture across the organization.

Negative Points

• The holding company reported a loss of $28 million or $0.14 per diluted share in 2024, primarily due to higher interest expenses and lower net other income.
• OGE Energy Corp (NYSE:OGE) faces regulatory challenges, with plans to file for rate reviews in Oklahoma and Arkansas, which could impact future financial performance.
• The company is experiencing increased interest expenses, which contributed to the holding company's financial loss.
• OGE Energy Corp (NYSE:OGE) is dealing with uncertainties related to potential data center projects, which could impact future load growth projections.
• The company anticipates a long-term debt issuance of up to $350 million in the first half of the year, indicating potential financial pressure from capital investments.

Q & A Highlights

Q: Can you provide any details on the data center opportunities and the potential megawatts needed? A: Sean Trauschke, CEO, mentioned that they are in discussions regarding opportunities ranging from 250 to 500 megawatts across several projects. However, specifics about the Stillwater opportunity cannot be disclosed at this time.

Q: How should we think about dividend growth in relation to EPS growth? A: Charles Walworth, CFO, stated that there is no change in messaging regarding the dividend. The goal remains to maintain a payout ratio in the 65% to 70% range.

Q: What are the expectations for 2025 load growth and any potential regulatory impacts? A: Sean Trauschke, CEO, noted that they expect exceptional weather-normalized growth of 8.5% by year-end 2025. The company plans to file for a rate case by mid-year, with load growth helping to mitigate regulatory lag.

Q: How is OGE Energy positioned to handle supply chain challenges for new generation projects? A: Sean Trauschke, CEO, expressed confidence in their ability to deliver generation solutions for new customers, citing the ongoing RFP process that provides visibility into available resources and timings.

Q: What is the long-term load growth expectation beyond 2025? A: Charles Walworth, CFO, indicated that they are comfortable with a long-term load growth expectation of at least 2%, driven by strong fundamentals and historical performance.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.