NorthWestern Q1 Earnings Call Highlights

Key Points

• NorthWestern reported GAAP diluted EPS of $1.03 and adjusted EPS of $1.31 (a 7.4% YoY increase), reaffirmed 2026 guidance of $3.68–$3.83, declared a $0.67 quarterly dividend, and said results were hurt by unusually warm weather and incremental Colstrip ownership costs (about $48M annually).
• The proposed merger with Black Hills won strong shareholder support and reached key settlement agreements, with management expecting regulatory approvals in the second half of 2026 and projecting the combination could lift the company’s EPS growth profile toward 5%–7%.
• NorthWestern is advancing large-load and data-center plans—now with three development agreements (including Quantica scaling to 1.1 GW targeted for early 2029) and a Montana Large New Load tariff filed—while keeping a $3.2B 2026–2030 capital plan and saying it has no equity needs in 2026 (but may need equity in 2027+ for South Dakota generation).

NorthWestern NASDAQ: NWE reported first-quarter 2026 results marked by warmer-than-normal weather, merger-related activity, and continued progress on its large-load and data center initiatives, according to executives on the company’s earnings webcast for the quarter ended March 31, 2026.

Brian Bird, president and chief executive officer, said the company posted GAAP diluted EPS of $1.03 and non-GAAP (adjusted) diluted EPS of $1.31. Management reaffirmed its 2026 earnings guidance range of $3.68 to $3.83 and reaffirmed its long-term rate base and EPS growth targets of 4% to 6%. The company also declared a quarterly dividend of $0.67 per share, payable June 30, 2026, to shareholders of record as of June 15.

Quarter results reflect warm weather, Colstrip costs, and new Montana rates

Chief Financial Officer Crystal Lail said GAAP earnings included “the impacts of a historically warm first quarter, merger-related costs and costs related to incremental Colstrip ownership.” On an adjusted basis, Lail said the company delivered $1.31 of earnings, representing a 7.4% increase from first-quarter 2025.

Lail said drivers for the quarter included improved margin (net of weather impacts), offset by higher operating costs, depreciation, and interest expense. She highlighted two components behind higher operating costs:

• $0.12 increase versus the prior quarter due to incremental Colstrip ownership
• $0.04 increase driven by labor and benefits

On Colstrip, Lail said the annual operating cost tied to incremental ownership is expected to be approximately $48 million, or about $12 million per quarter. She said the company offset about $8 million of those costs in the first quarter, but recovery was “impacted by low market power prices,” which reduced expected power pricing.

On margins, Lail said first-quarter results benefited from new rates in Montana, reflecting prior-year rate filing timing and the absence of interim rate recovery in the first quarter of 2025. She also cited sales from the Puget Colstrip interest and continued growth in bulk electric system transmission revenues. Those improvements were “offset by weather,” with Montana experiencing “the warmest winter in over 100 years,” she said.

Lail quantified the warm-weather impact as an unfavorable $0.17 versus normal volumetric loads. The quarter also included $0.05 of merger costs and $0.05 of Holter operating expenses that were not recovered, she said.

Guidance reaffirmed; capital plan unchanged and equity not needed in 2026

Lail said NorthWestern reaffirmed 2026 guidance and discussed the outlook for rate reviews. She noted that merger-related settlement agreements include “stay out provisions” in Nebraska and South Dakota. In Montana, she said the company has not determined the timing of its next rate review because the 2024 case “still remains under reconsideration.”

NorthWestern’s capital plan remains unchanged at $3.2 billion from 2026 through 2030, Lail said. She emphasized that the plan reflects “essential investments” to meet customer needs and does not include incremental investments related to potential regional transmission opportunities or serving large loads. The plan does include incremental generating capacity in South Dakota tied to the SPP expedited resource adequacy study, she said.

Lail added that the company is executing its base capital plan without issuing new common equity and has no equity needs in 2026. She said incremental capital in 2027 related to South Dakota generation capacity “will require some equity needs in 2027 and beyond.”

Merger with Black Hills: approvals, settlements, and timeline

Bird said the company received shareholder approval for its pending merger with Black Hills, with “approximately 86%” of shareholders voting and “99.7%” of those votes supporting the merger. Bird also said the company has reached “constructive settlements with each of our key interveners in Montana, Nebraska, and South Dakota associated with the merger dockets.”

Bird argued the combination would increase scale and, in his view, provide the ability to move from a “4%-6% EPS grower to a 5%-7%” growth profile, while also improving investment opportunity, resources, and business diversity. He also said that “any cost savings” achieved would ultimately accrue back to customers in future rate reviews.

On timing, Bird said a hearing has already occurred in Nebraska, with hearings scheduled in Montana and South Dakota on May and June timetables, respectively. He also pointed to the Federal Energy Regulatory Commission review timeline, noting filings were made in December and the company “hope[s] to hear back from FERC by the end of June.” He said the Hart-Scott-Rodino waiting period has expired.

Bird said the company still expects to achieve needed approvals in the second half of 2026. In response to a question about Montana’s pace, Bird said settlement progress could help “speed” the process and also referenced a $10 million benefit expected to accrue to customers shortly after the merger, which he suggested could create an incentive to move quickly.

Data center and large-load developments: three development agreements and tariff filing

Bird said NorthWestern signed another data center development agreement with Quantica Infrastructure, bringing the total to three development agreements. He said the company’s data center request queue increased to eight from six, while high-level assessments decreased as parties progressed through requirements such as deposits and cost considerations.

Bird said NorthWestern no longer has letters of intent and is aiming to move parties from high-level assessments directly into development agreements. He said the company would like to move all three development agreements to energy service agreements (ESAs) and that the developers “would like to have an ESA done by the end of 2026,” though he cautioned that required actions on the developers’ side must also be completed.

Bird said NorthWestern submitted its Large New Load tariff with the Montana Public Service Commission in March 2026, describing the intent as protecting customers and providing guidelines for serving large loads. Lail also referenced the tariff filing as part of management’s longer-term earnings profile.

Bird said the company is “ready today” to serve large load in South Dakota but was “disappointed” it did not achieve sales tax relief for data centers in that state, while still seeing significant interest.

He provided project-level updates during Q&A, saying Sabey has had issues procuring necessary land and the company is being patient, while Atlas continues to progress toward an ESA. Bird described the Quantica project as ramping from 25 megawatts to 1.1 gigawatts with a targeted start date of early 2029; he said the end customer has not been named and would typically be identified at the ESA stage. In response to an analyst question, Bird said the primary change in the company’s aggregate large-load outlook was “specifically to Quantica,” reflecting the 1.1 gigawatt figure.

Wildfire legislation in South Dakota and Colstrip positioning

Bird said South Dakota Senate Bill 36 was passed with broad bipartisan support and signed into law. He highlighted that strict liability “cannot be applied to utility operations alleged to have caused wildfire-related damage,” and said the legal protections are similar to Montana’s. Bird said NorthWestern plans to submit its wildfire mitigation plan for South Dakota PUC approval in the second half of 2026 and expects to update the plan every two years.

On Colstrip, Bird said NorthWestern acquired the Avista portion to reach resource adequacy at 222 MW, and procured the Puget Sound Energy interest of 370 MW to increase ownership to 55%, giving the company more control over the plant’s future. Bird said the Puget asset remains FERC-regulated “until we have an indication on our Large New Load tariff,” and that if the tariff is approved, it would be the company’s desire to move the asset into its Montana state-regulated business.

About NorthWestern NASDAQ: NWE

NorthWestern Corporation NASDAQ: NWE is a regulated energy company that delivers electricity and natural gas to residential, commercial and industrial customers. Through its Electric Operations and Gas Operations segments, the company operates an extensive network of distribution lines, substations and pipelines. NorthWestern's services encompass the delivery of power sourced from regional transmission systems and the procurement, storage and distribution of natural gas to end users.

Electric delivery services include the management of distribution infrastructure, customer metering and system reliability programs.

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