What NorthWestern (NWE) Said on Its Q3 Earnings Call

Key Points

• Third-quarter earnings declined: GAAP earnings fell to $0.50 per share from $0.62 a year earlier, while adjusted earnings dropped to $0.58 from $0.79. Higher costs and NorthWestern’s expanded Colstrip ownership weighed on results, cutting quarterly earnings by $6.1 million, or $0.10 per share.
• 2026 guidance was reaffirmed: NorthWestern maintained its standalone adjusted earnings outlook of $3.68–$3.83 per share, but said results could land in the lower half. The outlook depends on regulatory approval of a power-cost tariff waiver and power prices that cover Colstrip operating costs.
• Merger and growth plans remain in progress: A Montana decision on the proposed Black Hills merger is expected by Nov. 12; if satisfactory, the companies expect to close by the end of 2026. NorthWestern also reported continued data-center interest, with 16 requests in its queue, and is targeting a year-end energy service agreement with Quantica.

NorthWestern NASDAQ: NWE reported lower third-quarter earnings and reaffirmed its 2026 profit guidance, while warning that weak power prices and costs associated with its expanded ownership of the Colstrip power plant continue to weigh on results.

The utility also said it expects a final Montana regulatory order on its proposed merger with Black Hills Corporation by Nov. 12. If the order is satisfactory, NorthWestern anticipates completing the transaction by the end of 2026.

Third-quarter GAAP earnings were $0.50 per diluted share, down from $0.62 a year earlier. Adjusted earnings were $0.58 per share, compared with $0.79 in the third quarter of 2025.

Colstrip costs weigh on earnings

Chief Financial Officer Crystal Lail said improved margins from slightly favorable weather and the absence of power cost sharing were offset by higher operating costs, depreciation and interest. Lower usage per customer also affected volumes.

NorthWestern’s additional Colstrip interests acquired from Avista and Puget reduced third-quarter earnings by a combined $6.1 million, or $0.10 per share, Lail said. Weak market prices meant a tariff waiver tied to the Avista portion provided no recovery of costs during the quarter.

The company’s adjusted quarterly results excluded $0.04 per share in merger-related costs and $0.05 of detriment tied to designated sales contracts for the Avista portion. Weather was favorable by $0.01 per share compared with normal conditions.

For the first nine months of 2026, GAAP earnings fell to $1.93 per share from $2.22 a year earlier. Adjusted earnings were $2.39 per share, compared with $2.41 in the prior-year period. The combined impact of the additional Colstrip interests was $16.4 million, or $0.27 per share, year to date, Lail said.

NorthWestern reaffirmed its standalone adjusted earnings guidance of $3.68 to $3.83 per share for 2026, with a bias toward the lower half of that range. Lail said the outlook assumes approval of the power cost tariff waiver, which has only interim approval, and power prices sufficient to recover operating expenses from the additional Colstrip interests.

The company expects to file a Montana rate review by the end of 2026 to address costs associated with the Avista portion. Lail said NorthWestern would seek to recover those costs through base rates so that they do not continue to weigh on earnings in 2027.

Merger awaits Montana decision

President and CEO Brian Bird said the transaction with Black Hills has received approvals from regulators in Nebraska and South Dakota and from the Federal Energy Regulatory Commission. The Montana Public Service Commission has scheduled a hearing for Nov. 10, with a final order expected by Nov. 12.

If the merger receives a satisfactory written order, NorthWestern plans to close shortly thereafter, Bird said. He added that, assuming approval, the company plans to discuss its long-term earnings growth rate and provide 2027 guidance on its February earnings call.

NorthWestern also reaffirmed its standalone long-term targets for rate base and earnings-per-share growth of 4% to 6%. Its $3.2 billion capital plan remains on track, with an update expected in early 2027, Lail said.

The company declared a quarterly dividend of $0.67 per share, payable Dec. 1 to shareholders of record on Nov. 17. Bird said the dates align with Black Hills’ dividend schedule to simplify merger-closing mechanics.

Data center prospects and large-load tariff

Bird said the number of data center requests and assessments in NorthWestern’s queue rose to 16 from 14, including increased interest in South Dakota. The number of projects with development agreements fell to two from three after Sabey exited its agreement because of land issues near Butte, Montana. Bird said Sabey is no longer included in the queue.

The remaining development agreements are with Atlas and Quantica. Atlas could ultimately grow from 75 megawatts to 150 megawatts, starting in late 2027, Bird said. Quantica’s studied load ranges from 25 megawatts to 1.1 gigawatts, with a targeted start in early 2029 that recent discussions suggest could occur earlier.

NorthWestern is targeting an energy service agreement with Quantica by year-end, while an agreement with Atlas is less likely to be completed by then, Bird said.

Lail said the company’s proposed Montana large-load tariff is progressing through the regulatory process. NorthWestern can continue negotiating with customers and potentially serve them under Montana’s customer-choice framework before any transition to fully regulated service, she said.

About NorthWestern (NASDAQ:NWE)

NorthWestern Energy Group, Inc, doing business as NorthWestern Energy, is a regulated electric and natural gas utility headquartered in Sioux Falls, South Dakota. The company generates, purchases, transmits and distributes electricity, and provides natural gas distribution and related services to residential, commercial, industrial and agricultural customers.

NorthWestern Energy serves customers primarily in Montana, South Dakota and Nebraska. Its operations include electric generation facilities and transmission and distribution networks, as well as natural gas pipelines and distribution systems.

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