0001993004-26-000029
SEC filingRevenue grew 6.6% on rate increases and transmission, but net income fell 17.5% as higher operating costs, depreciation, and interest expense outpaced gains.
Revenue increased 6.6% to $497.6 million in Q1 2026 compared to $466.6 million in the prior year period. The growth was primarily driven by new base rates implemented across our jurisdictions, higher transmission revenue, and lower non-recoverable energy supply costs. However, electric retail volumes were negatively impacted by unfavorable weather conditions, partially offset by customer growth in all jurisdictions. The net effect was a top-line expansion that outpaced volume declines.
Operating income decreased 8.5% to $114.1 million from $124.7 million, resulting in an operating margin of 22.9%. The decline was primarily due to higher operating expenses, including costs associated with our additional ownership interests in Colstrip Units 3 and 4, increased depreciation expense, and higher general operating costs. These cost pressures more than offset the benefits from rate increases and transmission revenue growth. The decrease in operating income was also driven by lower retail volumes, which reduced contribution from electric and natural gas operations.
Net income fell 17.5% to $63.5 million, or $1.03 per diluted share, compared to $76.9 million, or $1.25 per diluted share, in the prior year. The decline was driven by the operating deleverage described above, as well as higher interest expense on increased debt levels. The effective tax rate remained consistent, providing no offsetting benefit. The lower earnings per share reflect the combined impact of reduced net income and a stable share count.
Electric utility margins benefited from base rate increases and lower supply costs, while natural gas margins were pressured by warmer weather reducing heating demand. The overall operating income decline was driven by higher costs across both segments, including depreciation and operating expenses related to Colstrip ownership.