ALLETE, INC. (NYSE: ALE) announced earnings guidance for 2024, projecting a range of $3.60 to $3.90 per share for net income of $210 million to $225 million. The forecast includes expected regulated operations segment earnings of 2.65 to 2. $85 per share, and from ALLETE Clean Energy and corporate and other transactions of $0.95 to $1.05 per share.
The company also unveiled an updated five-year capital expenditure plan totaling $4.3 billion, up $1 billion from its previous plan. These investments are aimed at expanding renewable energy and transmission projects, with revenue growth expected to begin in 2025.
For regulated operations, the guidance reflects interim rates from Minnesota Power’s 2023 tariff scenario of approximately $64 million that are subject to refund. Industrial sales are projected to be about 6.2 million megawatt-hours in 2024, corresponding to taconite production estimates of 35 million tons. The segment also expects higher operating and maintenance costs due to staffing and inflation, as well as higher depreciation and property tax expenses due to additional plant maintenance. Also included is an investment of approximately $6 million in American Transmission Company LLC.
ALLETE Clean Energy is expected to generate approximately 3.7 million MWh in 2024, assuming normal wind resources. The forecast takes into account a substation grid outage near the Caddo wind farm in the first quarter of 2024, the sale of the Whitetail project and higher operating costs. This also includes estimated production tax benefits of approximately US$18 million for the year.
The Corporate and Other segment is expected to report net income of $19 million to $21 million, with similar results coming from BNI Energy Inc. and Nobles 2 Power Partners, LLC. Slightly lower earnings from ALLETE Properties, LLC are expected, as well as lower returns on Minnesota solar investments due to investment tax credits recognized in 2023.
The company expects dilution of $0.03 per share due to higher average shares outstanding and expects consolidated effective income tax expense to be approximately 5 percent in 2024.
This financial forecast is based on ALLETE’s press statement and reflects the company’s strategic focus to expand its renewable energy and infrastructure portfolio while maintaining regulatory compliance.
InvestingAbout Insights
Because ALLETE, Inc. (NYSE: ALE) is targeting a greener future with significant increases in capital expenditures focused on renewable energy and transmission projects, and the financial community is closely monitoring the company’s performance. In accordance with InvestingPro According to the data, ALLETE’s market capitalization is approximately US$3.29 billion, reflecting the company’s current market valuation. With a sustainable P/E ratio of 13.25 and a trailing-twelve-month adjusted P/E ratio through Q3 2023 of 16.63, ALLETE is trading at a low earnings multiple, suggesting a potentially attractive valuation for investors.
InvestingPro’s tips highlight that ALLETE has not only raised its dividend for 13 consecutive years, but has also maintained its dividend payments for an impressive 54 consecutive years. This consistency in shareholder rewards, combined with a high dividend yield of 4.81%, could be particularly attractive to income-focused investors. Moreover, a company’s liquid assets in excess of its current liabilities indicate a strong financial position, which can reassure stakeholders of ALLETE’s ability to meet its immediate financial obligations.
For those who want to delve deeper into ALLETE’s financial outlook and investment potential, there are additional Investment Tips available, including analyst earnings revisions and the company’s PEG ratio, which at 0.74 suggests the stock may be undervalued given its earnings growth. To access this and much more, investors can use a coupon code. PRONEWS24 to get an additional 10% off your annual or bi-annual Pro and Pro+ subscriptions at InvestingPro. There are currently 9 more tips available that can provide greater insight into ALLETE’s investment profile.
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