CNP · Q3 2025 Earnings

Neutral

CenterPoint Energy

Reported October 23, 2025

30-second summary

SENTIMENT: Mixed 30-second take: CenterPoint delivered Q3 FY2025 non-GAAP EPS of $0.50, up 61% YoY from $0.31, with the bridge driven by O&M favorability (+$0.12, against last August's storm-hardening comp), growth and rate recovery (+$0.07), and income tax remeasurement (+$0.03). Management raised FY2025 non-GAAP EPS guidance to $1.75–$1.77 (from prior $1.74–$1.76), reaffirmed FY2026 at $1.89–$1.91, and raised the long-term EPS growth target to 7–9% through 2035 (from 6–8% mid-to-high end through 2030) — a 100bps raise to the long-term rate. The 10-year capex plan was lifted by ~$2B through 2030 and extended to 2035 at $65B with another $10B+ in optional upside. Offsetting these positives: the dividend growth target was moderated to a fixed 6% (from "mid-to-high end of 6–8%"), and the explicit 14–15% FFO/Debt floor was reframed as "100–150bps cushion above the 13% downgrade threshold through 2035." Management also announced an Ohio gas LDC sale at ~1.9x 2024 rate base (~$2.62B gross, ~$2.4B net) that retires ~$800M of OPCO debt and includes a $1B+ seller's note at 6.5% — accretive financing that softens the equity ask.

Headline numbers

EPS

Q3 FY2025

$0.50

Key financials

Q3 FY2025

Metric	Q3 FY2025	YoY	Q2 FY2025	QoQ
EPS	$0.50	—	$0.29	+72.4%

Guidance

FY2026 EPS reaffirmed at $1.89–$1.91, but dividend growth moderated to 6% annually (vs. prior 6–8% mid-to-high end) while capital plans expanded by ~$5B and extended through 2035 with $10B+ incremental optionality.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

New guidance

Metric	Period	Guide	YoY
Non-GAAP EPS Growth Rate (Long-Term)	FY2026–FY2035	7–9% annually through 2035; mid-to-high end expected in 2026–2028	—
Rate Base CAGR	FY2026–FY2030	11%+ through 2030	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Dividend Per Share Growth	FY2026–FY2035	6–8% annually through 2030, mid-to-high end	6% annually	–200 to –200 bps; from mid-to-high end of 6–8% range to fixed 6%	Lowered
Capital Investment Plan	FY2026–FY2035	$60B+ through 2030 (implied from prior 10-year guidance increased $5.5B since FYE2024)	$65B through 2035 plus $10B+ incremental opportunities	~$5B expansion plus $10B+ upside optionality; extension to 2035 and new incremental tranche	Raised
FFO/Debt Ratio	FY2026–FY2030	14–15% through 2030	Withdrawn — no replacement	—	Withdrawn

Reaffirmed unchanged this quarter: Non-GAAP EPS ($1.89–$1.91)

Other KPIs

Q3 FY2025

Segment	Q3 FY2025
Electric Throughput (GWh)	35,455
Electric Total Metered Customers	3,006,945
Natural Gas Throughput (Bcf)	93
Natural Gas Total Metered Customers	3,996,255
FFO/Debt (Moody's TTM)	14.0%
FFO/Debt (S&P TTM)	12.2%
Electric YoY Customer Growth	2%
Natural Gas YoY Customer Growth	1%

Management tone

Narrative arc: Q2 capital plan defense and funding reset preview → Q3 plan extension to 2035, EPS growth target raised, dividend moderated, Ohio sale announced.

The Q3 print is the comprehensive plan refresh management previewed in Q2. The package is more aggressive on capex and earnings growth, but less generous on payout: long-term EPS growth was raised 100bps to 7–9% through 2035 while the dividend was decoupled and held to a fixed 6%. Q2's pitch was "we may need less equity than 50/50 to fund this." Q3's answer is "we're funding ~$2B more capex through 2030, extending the plan to 2035, holding the equity guide through 2030 unchanged at $2.75B, and moderating the dividend to support the funding math." The Ohio sale at ~1.9x rate base provides ~$800M of OPCO debt retirement and a $1B+ seller's note at 6.5%, and Foster explicitly framed it as enabling less equity than the 47% rule-of-thumb at the September investor update.

The FFO/Debt framing change matters. Q2 disclosed 14–15% as the through-2030 target and reported 14.1% TTM. Q3 reports 14.0% adjusted and replaces the explicit range with a "100–150bps above 13% downgrade threshold" framing through 2035 — arithmetically similar near-term but giving management more flexibility as the capex agenda expands.

The raise to long-term EPS growth is the most important shift. The prior 6–8% mid-to-high end through 2030 becomes 7–9% through 2035 with mid-to-high end emphasis for 2026–2028 specifically. That is a 100bps raise to the long-term annual growth rate plus a five-year horizon extension — a meaningful upgrade to the algorithm, even with the dividend moderated.

Q&A confidence was high and answers were specific. Foster gave precise numbers on the Ohio sale mechanics ($800M debt reduction, $400M net plan benefit, $500M of 2025 capex redeployment plus $1B in 2026 to fully replace Ohio rate base by 2027). The seller's note at 6.5% settling quarterly with no cash lag is real financing engineering, not a hand-wave.

Q&A highlights

Nick Campanella · Barclays

How should we think about FFO to debt improvement from the Ohio transaction versus the plan? Is the equity assumption moving from 47% to 30% or 15%?

Chris Foster detailed that the deal will reduce OPCO debt by roughly $800 million (based on year-end 26 rate base of $1.6B) and provide ~$400M net benefit to the plan. This provides near-term balance sheet improvement and positions the company to deploy additional CapEx in an accretive way, though no specific new equity percentage was committed.

$800 million OPCO debt reduction expected$400 million net benefit to planYear-end 26 rate base of $1.6 billion for Ohio businessDeal allows for evaluation of both balance sheet improvement and additional CapEx deployment

Steve Fleischman · Wolf Research

What sectors are driving the strong industrial sales growth in Texas? Also, any update on data center prospects in Indiana and regulatory environment there?

Jason Wells attributed Texas industrial growth to diverse drivers including 0.5GW of data center activity, energy refining/processing/exports, and 18% quarter-over-quarter increase in Port of Houston exports. For Indiana, data center opportunities remain well-positioned with excess system capacity, simple cycle plant convertible to combined cycle, and rates expected to grow with inflation through the decade. Management canceled $1B in renewable projects and delayed coal plant retirement to moderate rate increases.

0.5+ GW of data center activity connected in Texas this year18% quarter-over-quarter increase in Port of Houston exportsIndiana data center opportunities leveraging excess capacity$1 billion in renewable projects canceled in Indiana

Jeremy Tonid · JPMorgan Securities

Is the Ohio asset sale accretive to earnings over time, and can you explain how the seller's note helps facilitate the plan?

Chris Foster confirmed the sale is accretive to both financing and earnings. He highlighted that cash lag will decrease 25-30% historically, and the company is deploying ~$500M this year plus another ~$1B in 2026 to fully replace the Ohio rate base by beginning of 2027. The $1B+ seller's note at 6.5% coupon helps 2027 earnings and settles quarterly with no lag.

25-30% reduction in cash lag from Ohio divestiture$500 million deployed to offset in 2025~$1 billion additional deployment planned for 2026Full Ohio rate base replacement by beginning of 2027

Julian Dumond-Smith · Jefferies

What is the timeline and cadence for AMI (Advanced Metering Infrastructure) rollout? When do we get visibility on contributions?

Jason Wells stated that next-generation AMI will start folding into the plan in 2026, beginning with a pilot to prove use case and benefits. A PUCT filing is expected, with earnest deployment beginning in 2027 and beyond. He cited benefits including targeted load shedding at the home level (as opposed to circuit level) in events like Winter Storm Uri. AMI is identified as part of the $10B+ upside opportunity in the 10-year plan.

AMI pilot planned for 2026PUCT filing expected following pilot resultsFull deployment to begin 2027 and beyondIdentified as part of $10B+ upside opportunity in 10-year plan

Julian Dumond-Smith · Jefferies

What is the status and market opportunity for mobile generation units? How much of the improved market pricing is factored into guidance?

Chris Foster noted two cohorts: 5 medium-sized units (~5MW each) actively being marketed with strong market demand, and 15 larger units (~30MW each) supporting the grid outside San Antonio until late 2026/early 2027. Once released, the larger units will be remarketed (expected spring 2027). The strong and modestly improving market conditions represent a potential cash flow tailwind not fully committed in the plan.

5 medium-sized generation units (~5MW each) actively marketed15 larger units (~30MW each) supporting grid until late 26/early 27Larger units expected to remarket spring 2027Market conditions remain strong and improving modestly

Answers to last quarter's watch list

Q3 comprehensive plan refresh — funding mix disclosure. Resolved with a mixed package. The Ohio sale provides ~$800M of OPCO debt retirement plus a $1B+ seller's note at 6.5%, reducing the equity ask without an explicit new percentage commitment. The $2.75B common equity guide through 2030 was held unchanged; total equity through 2035 is now framed at ~$4B (inclusive of ~$1.1B forward sales already executed). The dividend was moderated to 6% from "mid-to-high end of 6–8%" and the explicit FFO/Debt floor was reframed as a cushion-above-threshold construct. Status: Resolved mixed.

Beryl cost recovery outcome. On track. Foster expects ~$1.3B of Hurricane Beryl securitization in Q1 2026; cost determination settlement and financing order pending approval. Status: On track.

Ohio LDC sale announcement. Resolved positively — sale announced this quarter at ~1.9x 2024 rate base (~26x 2024 earnings), ahead of the year-end 2025 target Wells gave in Q2. Mechanics include $800M OPCO debt reduction, $1B+ seller's note at 6.5%, and full rate-base replacement by early 2027.

Resolved positively

Six-gigawatt queue conversion. Partial confirmation — Wells disclosed 0.5+ GW of data center activity actually connected in Texas this year, with Port of Houston export volumes +18% QoQ. Conversion of the broader queue still pending; the early data points support the thesis but the bulk of in-service dates remain 2026–2028.

Continue monitoring

FFO/Debt headroom at year-end. Resolved with reframing. Moody's TTM adjusted at 14.0% (vs. 14.1% in Q2), at the low end of the prior 14–15% range, which has been replaced with a 100–150bps cushion above the 13% downgrade threshold through 2035. S&P TTM at 12.2%. Beryl securitization in Q1 2026 expected to improve the metric. Status: Resolved mixed.

What to watch into next quarter

Whether the new "cushion above downgrade threshold" framing translates to a tighter explicit target. A reframed credit guardrail while capex expands and the dividend is moderated is a consequential disclosure shift. Watch the Q4 print and CFO commentary for whether the cushion is quantified more precisely once Beryl securitization closes.

Ohio sale closing mechanics and rate-base replacement pace. Foster committed to ~$500M of 2025 redeployment plus ~$1B in 2026 to fully replace Ohio rate base by early 2027. Watch quarterly capex reporting for whether that pace holds and whether the $1B+ seller's note actually settles at the 6.5% coupon described.

FY2026 EPS bridge to the $1.89–$1.91 reaffirmed range. Management is targeting "at least the midpoint." Watch for whether Q4 commentary discloses the load-growth, rate-case, and cost-reduction contributions explicitly.

Data center contracted GW added vs. the 0.5+ GW already in service. With the queue framing in Q2 at six gigawatts and only 0.5+ GW connected so far, watch whether signed interconnection agreements step up materially before late-2026 ISDs arrive.

AMI PUCT filing timing. Wells positioned AMI as part of the $10B+ incremental opportunity. A 2026 filing date or earlier would shift the $10B+ tranche from optionality toward base case sooner than expected.

Sources

CenterPoint Energy Q3 2025 Earnings Presentation, filed via SEC EDGAR — https://www.sec.gov/Archives/edgar/data/1130310/000113031025000138/q32025earningspresentati.htm
CenterPoint Energy Q3 2025 earnings conference call — prepared remarks and Q&A.

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