Rapid City, S.D.-based utility Black Hills Corp., which has customers in eight states including Arkansas, recently reported fourth-quarter net income increased 37.5% to $88 million, or $1.51 per share, from $64 million, or $1.17 per share, in the same period in 2017. Earnings for 2018 rose 36.6% to $265 million, or $4.78 per share, from $194 million, or $3.52 per share, in 2017.
The fourth quarter included net tax benefits of $27 million, or 46 cents per share, and 2018 included benefits of $69 million, $1.24 per share. The benefits were related to legal entity restructuring at the company’s gas utilities which led to deferred tax benefits from goodwill for tax purposes. The same periods of 2017 included a benefit from tax reform and other tax items of $12 million, or 21 cents per share.
“I am pleased with the organization’s accomplishments in 2018 as we continued to execute our electric and natural gas utility strategy,” said Linn Evans, president and CEO of Black Hills Corp. “Black Hills achieved excellent operational performance and made progress on a number of important strategic initiatives. Adjusted earnings per share grew 5% year-over-year through ongoing strategic investments to better serve our customers and communities and from increased customer usage primarily due to weather. Earnings per share were impacted by the Nov. 1 conversion of our equity units and the resulting addition of 6.37 million new shares of common stock.”
The utility in Arkansas on Oct. 5 received approval from the Arkansas Public Service Commission for new rates to recover more than $160 million of investment to replace, upgrade and maintain more than 5,500 miles of natural gas pipelines in Arkansas. The approval resulted in an increase of $12 million in new annual revenue, and the new customer rates went into effect Oct. 15.
In July 2015, Black Hills agreed to acquire SourceGas Holdings LLC for nearly $2 billion in cash and debt. Black Hills has 1.25 million natural gas and electricity utility customers in Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. Shares of Black Hills (NASDAQ: BKH) were trading Monday (Feb. 11) at $69.89, up 43 cents or 0.66%. In the past 52 weeks, the stock has ranged between $70.25 and $50.49.