CenterPoint Energy Discloses $1.2B Sale of Gas Assets, Fuels Capital Expansion Plans After Q4 Results

CenterPoint Energy, Inc (Holding Co) CNP reported fourth-quarter adjusted earnings per share of 32 cents, in line with the street view.

Adjusted earnings jumped 14% year over year. The fourth quarter results were primarily driven by growth and regulatory recovery, which contributed $0.05 per share of favorability, and a one-time tax benefit, which, combined with other favorable earnings drivers, contributed another $0.06 per share compared to the fourth quarter of 2022.

Sale Of Natural Gas Assets: In a separate press release, CenterPoint revealed the sale of its Louisiana and Mississippi natural gas LDC operations to Bernhard Capital Partners for $1.2 billion. 

CenterPoint’s Louisiana and Mississippi LDCs represent less than 4% of the company’s overall rate base.

The assets encompass about 12,000 miles of main pipeline and serve around 380,000 metered customers. CenterPoint’s LDCs rank second in both states by customer count and employ approximately 550 staff.

The sale will allow CenterPoint to recycle around $1 billion in expected after-tax cash proceeds to bolster its cutting-edge capital plan. This transaction also empowers CenterPoint to reallocate approximately $1 billion in future capital investments from those assets to other areas within its regulated Electric and Natural Gas utility footprint.

The closing of the deal is expected toward the end of the first quarter of 2025.

Increases Capital Investment Plan: The company increased its 10-year capital plan through 2030 to $44.5 billion, a $600 million increase through 2030, which includes $100 million already deployed in 2023 with the remaining $500 million to be invested over the remainder of the decade.

Outlook: The company reiterated its 2024 non-GAAP EPS guidance range of $1.61-$1.63, which represents 8% growth year over year (estimate: $1.62). 

CenterPoint said it maintained its non-GAAP EPS growth targets of 8% for 2024 and the mid-to-high end of 6%-8% annually thereafter through 2030.

Price Action: CNP shares closed higher by 0.04% to $27.88 on Friday.