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Market News

UPDATE 1-CMS Energy posts higher first-quarter profit helped by robust demand, lower costs
25-Apr-24 13:28

(Updates to add details from company call, analyst comment in

paragraph 5 through 8)

    By Srivastava  Vallari

       April 25 (Reuters) - CMS Energy CMS.N reported a rise

in first-quarter profit on Thursday, as the electric and gas

utility benefitted from higher sales and improved weather which

lowered storm-related restoration costs.

    Operating expenses for the first quarter, which include

restoration costs, fell to $1.76 billion from $1.97 billion in

the year-ago quarter.

    U.S. natural gas futures NGc1 fell about 30% sequentially

in the January-March quarter, which helped utilities such as CMS

Energy reduce their costs. NGA/

    Peers such as Xcel Energy XEL.O and PG&E Corp PCG.N also

benefitted from lower operating expenses and beat analysts'

expectations for first-quarter profit earlier today.

    CMS Energy, during its post-earnings call, said it had

secured a contract with a large data center in Michigan earlier

this year. Utilities such as Southern Co SO.N, NextEra NEE.N

and American Electric Power AEP.O have highlighted the ongoing

AI and data center boom as a tailwind for earnings.

    "This is nice load growth. And I'm even more excited about

the manufacturing load growth we are seeing in Michigan, which

is a differentiator for us," said CEO Garrick Rochow.

     CMS Energy, which provides services to about 6.8 million

customers across Michigan, also reaffirmed its full-year

adjusted profit forecast of $3.29 to $3.35 per share, compared

with analysts' estimates of $3.33 per share, per LSEG data.

    "Forecast is conservative as always on this front, but we

see the trends as encouraging," Scotiabank analyst Andrew Weisel

said in a note.

    The Jackson, Michigan-based firm said net income

attributable to shareholders rose to $285 million, or 96 cents

per share, in the quarter ended March 31, from $202 million, or

69 cents per share, a year ago.

(Reporting by Vallari Srivastava in Bengaluru; Editing by Vijay

Kishore and Ravi Prakash Kumar)

((Srivastava.Vallari@thomsonreuters.com;))

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