CMS Energy posts lower quarterly profit on higher operating costs (updated)

CMS Energy

06/02/2025 17:10

(Adds details from conference call in paragraphs 3 through 5)
    By Pooja  Menon
       Feb 6 (Reuters) - U.S. electric and gas utility CMS
Energy  CMS.N  reported a drop in its fourth-quarter profit on
Thursday due to higher operating expenses, and warned of supply
chain issues arising from potential tariffs.
    U.S. natural gas futures  NGc1  rose 44.5% in 2024,
resulting in higher operating costs for utilities like CMS
Energy.
    The utility also said it faces a "bumped up" supply chain
situation and is looking to "migrate" to domestic vendors to
cope with the potential tariffs, which were initiated and later
paused by U.S. President Donald Trump on Canada and Mexico.
    The company in 2024 sourced about 6% of its natural gas
supply from Canada.
    CMS's interest charges in the quarter rose 4.5% to $180
million from the previous year, as a higher-for-longer interest
rate environment has pushed borrowing costs for utilities that
typically incur major capital expenditures.
    Mild temperatures in service areas during the reporting
period also hurt the demand for natural gas and electricity, the
company said in a conference call.
    Total operating expenses for the fourth quarter rose to
$1.56 billion from $1.54 billion in the year-ago period, the
company said.
    Its revenue rose 2% from a year earlier to $1.99 billion in
the quarter ended December 31, but missed analysts' average
estimate of $2.22 billion, according to LSEG data.
    CMS Energy raised its 2025 forecast for adjusted earnings to
between $3.54 and $3.60 per share, versus $3.52 to $3.58
previously. Analysts had estimated them at $3.59 per share.
    The utility firm also increased its annual dividend by 11
cents to $2.17 per share.
    The Jackson, Michigan-based firm said net income available
to common stockholders fell to $262 million or 87 cents per
share in the fourth quarter, from $306 million or $1.05 per
share in the same period last year.

 (Reporting by Pooja Menon in Bengaluru; Editing by Milla Nissi
and Vijay Kishore)
 ((Pooja.Menon@thomsonreuters.com;))