CenterPoint (CNP) Q2 2025: Navigating Storm Costs and Strategic Sales

In the complex world of public utilities, understanding a company's financial health requires looking beyond the headline numbers. CenterPoint Energy Inc. (CNP), a major U.S. utility, recently filed its quarterly report for the period ending June 30, 2025, offering a detailed look into its operations. Let's dig into the income statement to see how the company is performing.

For the first six months of 2025, CenterPoint's total revenue grew to $4.9 billion from $4.5 billion in the same period last year. Despite this, net income declined to $495 million from $578 million. This divergence between revenue and profit highlights contrasting stories within the company's main business segments.

Divestiture and Lingering Storm Costs

Electric Segment

CenterPoint's Electric segment, which provides transmission and distribution services to the Houston area and parts of Indiana, saw its net income for the first half of the year fall by $57 million to $279 million. Two key factors drove this decline:

• Past Storm Impacts: The segment is still managing the financial fallout from severe weather in 2024, including destructive storms in May and Hurricane Beryl in July. These events continue to weigh on performance.
• Rising Costs: Operation and maintenance expenses increased by $35 million compared to the prior year. A notable item was a $15 million lease expense for temporary generation units in the second quarter, a cost that is no longer deferred for future rate recovery and now directly impacts earnings.

Natural Gas Segment

The Natural Gas segment's results require a closer look. While its six-month net income fell by $16 million to $314 million, this figure includes a one-time, $43 million loss on the sale of its Louisiana and Mississippi businesses, which closed in March 2025.

This divestiture is a key part of CenterPoint's strategy to streamline its portfolio. Excluding the one-time loss, the underlying business shows strength. In the second quarter alone—the first full quarter after the sale—the segment's net income nearly doubled to $86 million from $47 million a year ago, boosted by new customer rates.

Visualizing the Financial Flow

To see how CenterPoint's revenue is transformed into profit, the following chart breaks down the company's income statement for the first six months of 2025.

Investing for the Future

CenterPoint is actively investing in its infrastructure. Capital expenditures climbed to $2.2 billion in the first half of 2025, up from $1.7 billion in the same period last year. This spending includes a $357 million acquisition of the Posey Solar facility in Indiana, reinforcing the company's commitment to modernizing its energy mix.

In Texas, the company is moving forward with its Transmission and Distribution System Resiliency Plan (SRP), a multi-year strategy to harden the electric grid against future weather events. The ability to recover the costs of these major investments through regulatory proceedings like rate cases will be critical to the company's financial health.

In summary, CenterPoint's latest filing reveals a company in the midst of a strategic shift. The sale of non-core gas assets is sharpening its operational focus, but its core Electric segment faces pressure from the lingering costs of past storms and a high level of investment. The company's success will depend on its ability to effectively manage these costs and secure favorable outcomes with regulators to fund its grid modernization efforts.