PNW

A month has gone by since the last earnings report for Pinnacle West (PNW). Shares have lost about 4.1% in that time frame, underperforming the S&P 500. Will the recent negative trend continue leading up to its next earnings release, or is Pinnacle West due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Pinnacle West Capital Corporation before we dive into how investors and analysts have reacted as of late. Pinnacle West Q2 Earnings Miss Estimates, Revenues Increase Y/Y Pinnacle West Capital Corporation reported second-quarter 2026 earnings of $1.43 per share, missing the Zacks Consensus Estimate of $1.49 by 4.03%. The bottom line declined 9.5% from $1.58 in the year-ago quarter. Revenues for the reported quarter totaled $1.46 billion, which surpassed the Zacks Consensus Estimate of $1.40 billion by 3.93%. The top line increased 7.1% from $1.36 billion recorded in the year-ago quarter. Total operating expenses were $1.15 billion, up 9.4% from $1.05 billion in the prior-year quarter. Fuel and purchased power costs climbed 17.1% to $558.5 million, while depreciation and amortization increased 6.3% to $243.2 million.Operating income totaled $305.7 million, down 0.6% from $307.6 million a year ago. Higher fuel and purchased power costs largely offset the benefit of increased revenues and lower operations and maintenance expenses.Total interest expenses were $122.2 million, up 19.8% from $102 million in the prior-year period. As of June 30, 2026, cash and cash equivalents totaled $9.1 million compared with $6.6 million as of Dec. 31, 2025.As of June 30, 2026, long-term debt, less current maturities, amounted to $9.78 billion compared with $9.21 billion as of Dec. 31, 2025.Net cash provided by operating activities totaled $629.3 million in the first six months of 2026 compared with $663.3 million a year earlier. Capital expenditures were $1.36 billion versus $1.33 billion in the comparable 2025 period. The company continues to expect its 2026 consolidated earnings in the range of $4.55-$4.75 per share and projects 5-7% long-term EPS growth from the 2024 earnings base. The Zacks Consensus Estimate for the same is pegged at $4.74, higher than the midpoint of the company’s guided range.The company projects its 2026 revenues in the range of $5.56-$5.66 billion.Management expects retail customer growth of 1.5-2.5% and weather-normalized retail electricity sales growth of 4-6%. New large manufacturing facilities and several large data centers are expected to contribute 3-5% to sales growth.Arizona Public Service Company (APS) plans to invest $2.60 billion in 2026, followed by $2.65 billion in 2027 and $2.70 billion in 2028. The 2026 spending plan includes $825 million for generation, $550 million for transmission, $765 million for distribution and $460 million for other projects. The capital program is designed to support reliability and continued growth across the utility's service territory. Estimates review followed a upward path over the past two months. Currently, Pinnacle West has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a score of B on the value side, putting it in the top 40% for value investors. Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in. Pinnacle West has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Pinnacle West Capital Corporation (PNW) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Pinnacle West Capital PNW is strengthening efficiency through disciplined cost management and tighter control of operating expenses. These efforts support financial stability while creating more flexibility to fund infrastructure investments.PNW’s operations and maintenance (O&M) expenses fell 1.1% year over year to $283.4 million in the second quarter, while first-half 2026 O&M costs declined 4.5% from the prior-year period. The company expects 2026 adjusted core O&M of $970-$980 million, while adjusted O&M, excluding renewable energy and demand-side-management costs, is projected at $1.02-$1.04 billion.Pinnacle West Capital also remains committed to reducing O&M expenses on a per-megawatt-hour basis over time. PNW’s cost control is increasingly important as it plans to invest $2.6 billion in 2026 and nearly $7.95 billion through 2028 to support infrastructure and 7-9% rate-base growth.By lowering costs, PNW can improve earnings and capture greater benefits from its expanding customer base and rising electricity demand. The company expects 2026 earnings per share (EPS) of $4.55-$4.75 and 5-7% long-term EPS growth. The company is also pursuing cost-effective projects. Its planned conversion of the Cholla plant will repurpose existing infrastructure to provide about 380 megawatts of dispatchable generation by 2029, helping meet rising demand without building an entirely new facility. Overall, PNW’s stable O&M costs amid rising demand and infrastructure investment are positive, while continued efficiency and regulatory recovery could support margins and long-term growth. Utilities that control operating costs can improve margins, preserve financial flexibility, fund infrastructure investments and maintain affordable customer rates. Effective cost management also strengthens operations and supports sustainable earnings growth. Alongside PNW, several other utilities also demonstrate strong cost management as highlighted below:American Electric Power AEP expects up to $16 billion in cost offsets from load growth, helping spread fixed costs while supporting customer affordability and long-term earnings growth. PG&E Corporation PCG expects to meet its 2026 target of reducing non-fuel O&M costs by 2-4%, supporting both customer affordability and greater operating efficiency. The Zacks Consensus Estimate for 2026 and 2027 EPS indicates a decrease of 6.53% and an increase of 17.90%, respectively, year over year. Image Source: Zacks Investment Research PNW is trading at a premium to the industry, with a forward 12-month price-to-earnings ratio of 18.92X versus the industry average of 15.42X. Image Source: Zacks Investment Research In the past six months, Pinnacle West Capital’s shares have plunged 2% compared with the industry’s 7.9% fall. Image Source: Zacks Investment Research PNW currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Pinnacle West Capital Corporation (PNW) : Free Stock Analysis Report Pacific Gas & Electric Co. (PCG) : Free Stock Analysis Report American Electric Power Company, Inc. (AEP) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Tuesday, Aug. 4, 2026 at 12:00 p.m. ET Chairman, President and Chief Executive Officer - Ted Geisler Chief Financial Officer - Andrew Cooper Chief Operating Officer - Jacob Tetlow Senior Vice President of Public Policy - Jose Esparza Need a quote from a Motley Fool analyst? Email [email protected] Operator: Good day, everyone, and welcome to the Pinnacle West Capital Corporation 2026 Second Quarter Earnings Conference Call. [Operator Instructions] It is now my pleasure to hand the floor over to your host, Amanda Ho. Ma'am, the floor is yours. Amanda Ho: Thank you, Matthew. I would like to thank everyone for participating in this conference call and webcast to review our second quarter earnings, recent developments and operating performance. Our speakers today will be our Chairman, President and CEO, Ted Geisler; and our CFO, Andrew Cooper. Jacob Tetlow, COO; and Jose Esparza, SVP of Public Policy, are also here with us. First, I need to cover a few details with you. The slides that we will be using are available on our Investor Relations website, along with our earnings release and related information. Today's comments and our slides contain forward-looking statements based on current expectations and actual results may differ materially from expectations. Our second quarter 2026 Form 10-Q was filed this morning. Please refer to that document for forward-looking statements, cautionary language as well as the risk factors and MD&A sections, which identify risks and uncertainties that could cause actual results to differ materially from those contained in our disclosures. A replay of this call will be available shortly on our website for the next 30 days. It will also be available by telephone through August 11, 2026. I will now turn the call over to Ted. Theodore Geisler: Thank you, Amanda, and thank you all for joining us today. We had a solid second quarter, supported by disciplined execution across the business. Before Andrew walks through the results and our updated outlook, I'd like to share a few updates on recent operational and regulatory developments. Arizona's economy remains on a strong and sustainable growth trajectory, further cementing the state's standing as a national leader in semiconductor manufacturing and advanced technology. A major highlight this quarter was Taiwan Semiconductor Manufacturing Company's announcement of an additional $100 billion investment in Arizona, bringing its total commitment to $265 billion. TSMC now plans to develop up to 12 leading-edge fabrication and advanced packaging facilities in North Phoenix, along with the dedicated research and development campus, and the ripple effect goes well beyond TSMC's own facilities. Nearly 20,000 acres of surrounding land are now in various stages of planning and development, giving rise to an entirely new economic corridor in the region. Halo Vista is a great example. Development is already underway with the first tenant expected to arrive in the first half of next year. Over the next decade, the project is expected to grow to approximately 30 million square feet of mixed-use development and about 9,000 residential units. It's just one illustration of the sustained growth we're seeing across our service territory. To meet that growth, our all of the above resource strategy is built to keep pace while continuing to deliver reliable and affordable service every day to our customers. Recently, we announced our intent to convert 2 retired coal-fired units at the Cholla power plant to natural gas. Once complete, the project is expected to provide approximately 380 megawatts of reliable, dispatchable generation by 2029. By repurposing existing infrastructure and transmission assets, we're able to reliably serve growing demand while maximizing the affordable value of assets already in place. Generation investment alone won't be enough to support Arizona's long-term growth. That's why we're also making significant investments in transmission with multiple projects underway and additional opportunities under development. These investments enhance system reliability and resiliency, improve integration of new resources and expand access to regional markets and out-of-state generation. Importantly, they also benefit from constructive and timely recovery through our FERC Formula rate while creating opportunities for additional wheeling revenue that helps support affordability for our retail customers. Turning to our rate case. We concluded 31 days of hearings on July 7 and have now moved into the briefing phase. Initial briefs are due August 27, with reply briefs due September 11. We expect the administrative law judge to issue a recommended opinion and order later this year, which would then advance to the commission for consideration. Based on this procedural schedule, we continue to expect a final commission decision before year-end. Throughout this process, we remain focused on achieving a constructive outcome and consistent framework for recovering ongoing investments in order to support Arizona's growth and our customers' future energy needs. As we move through the summer season, I'm proud of how our team continues to deliver top-tier reliable service amid extreme heat. Reliability is at the core of our mission, made possible by disciplined planning, thoughtful resource procurement and exceptional execution across the organization. I want to recognize our planners, engineers, operators, field personnel and all our team members for their commitment and dedication to serving our customers safely and reliably through the summer months so far. On August 2, we reached a new all-time peak demand record of 9,164 megawatts, exceeding last year's record by more than 500 megawatts. This record is a clear signal of the growth underway in our service territory and our performance this summer demonstrates we're ready for it. We're also continuing to strengthen our customer-centric culture and enhance the experience we provide to our customers. A key focus is delivering a strong billing and payment experience by offering customers flexible options and support tailored to their needs, including budget billing, flexible payment arrangements and programs designed to help customers better manage their overall energy costs. Investments in digital platforms, customer communications and self-serve capabilities remain an important part of our strategy to improve service, increase engagement and ultimately lower costs over time. And those efforts are producing meaningful results. In the second quarter, APS achieved strong performance in Escalent's customer relationship index, ranking in the first quartile for business customer satisfaction and the second quartile for residential customers, reflecting continued progress in building trust, delivering value and creating a seamless customer experience. In closing, we remain focused on building the infrastructure needed to support Arizona's growth, maintaining reliable and affordable service for our customers and advancing our key regulatory initiatives. The momentum and exceptional growth we're seeing across our state underscore just how important this work is, and we look forward to continuing to deliver for our customers, communities and shareholders through the remainder of the year. With that, I'll turn the call over to Andrew. Andrew Cooper: Thank you, Ted, and thanks again to everyone for joining us today. This morning, we reported our second quarter 2026 financial results. I will walk through the key drivers behind our performance and provide some additional details for the quarter. We earned $1.43 per share during Q2, a decrease of $0.15 compared to the second quarter of 2025. Higher interest net of AFUDC, higher depreciation and amortization due to higher plant balances and lower transmission revenue were the primary negative drivers for the quarter-over-quarter comparison. These drivers were partially offset by beneficial weather and higher sales growth and usage. Weather was a benefit during the quarter. The early start to triple-digit temperatures in the valley and higher average temperatures each month of the quarter compared to the same period last year contributed to increased cooling demand. Customer and sales growth continues to be strong, contributing approximately $0.11 of quarter-over-quarter earnings benefit. We achieved 2.1% customer growth and weather-normalized sales growth of 9.6% compared with the second quarter of last year. While we are not updating our 2026 sales growth guidance at this time, year-to-date weather-normalized sales growth has tracked more closely with our longer-term outlook. Residential sales growth came in strong at 5.6%, and commercial and industrial sales also continued to perform exceptionally well, increasing 12.7% during the quarter, driven by the ongoing expansion of a diverse mix of data center and advanced manufacturing customers. O&M expense declined modestly compared with the second quarter of last year. We remain committed to our long-term objective of reducing O&M expense on a per megawatt hour basis over time. Across the organization, we continue to identify opportunities to improve efficiency, reduce risk and manage costs responsibly while maintaining the high level of service and reliability our customers expect. Interest expense increased year-over-year, reflecting higher debt balances and a higher interest rate environment. Depreciation and amortization expense also increased as investments such as Agave, Ironwood and Sundance were placed into service. These resources are providing critical capacity needed to support customer growth and maintain system reliability and are key components of our pending rate case. Transmission revenues were lower in the quarter due primarily to a final true-up adjustment related to 2025. We continue to execute well on our capital investment program and financing strategy while actively managing upcoming debt maturities. Although we are not updating our capital expenditure guidance today, it is important to note that our current outlook does not include the recently announced Cholla conversion project. We expect that project could add up to approximately $440 million of incremental capital investment, mostly in 2027 and 2028. Turning to financing. We continue to be opportunistic with the use of our ATM and have utilized all remaining capacity from our existing $900 million ATM equity program. Earlier this morning, we announced the filing of a new $500 million ATM program that will provide ongoing funding flexibility consistent with our current equity financing guidance. Additionally, in the second quarter, we successfully issued $500 million of senior unsecured notes at Pinnacle West to refinance our maturing notes and support our broader funding strategy. We continue to be deliberate in our financing plan to support a balanced capital structure and strong balance sheet and seek advantageous financing opportunities. Based on our strong execution through the first half of the year, we are reiterating all other aspects of our guidance and currently expect to finish the year at the top end of our earnings guidance range of $4.55 to $4.75 per share. As always, we remain mindful of the potential impacts of weather and sales variability during the remaining summer months and we'll continue to monitor both closely. Overall, we remain focused on executing our strategy, investing to support Arizona's continued growth, maintaining financial discipline and delivering long-term value for our customers and shareholders. This concludes our prepared remarks. I will now turn the call back over to the operator for questions. Operator: Your first question is coming from Shar Pourreza from Wells Fargo. Alexander Calvert: It's actually Alex on for Shar. Just wanted to touch on the retail sales growth you're seeing, you've exceeded expectations again this quarter. So with the third quarter being your biggest quarter, do you see this level of growth continuing at this pace for the remainder of the year? And just how are you thinking about the sales guidance longer term? Is this something you could consider revisiting just given the magnitude of growth you are already seeing across your footprint? Andrew Cooper: Sure, Alex. It's Andrew. Thanks for the question. It was a robust quarter from a sales growth perspective. And I think the key hallmark of it was the diversity of that growth across residential and across our C&I. And even within C&I, that diversification across a number of data centers ramping up as well as the continued build-out of the semiconductor ecosystem. And as I mentioned in the prepared remarks, this was a lot closer to our long-term sales growth guidance range, which we provided through 2030, which is 5% to 7% relative to the 4% to 6% that we're showing for this year. There certainly is upside potential to the sales growth range. I think as importantly, there is a sustained runway of that very robust level of sales growth. If you think about the residential side, while some of what drove this quarter was customer behavior, some of it was a secular trend towards higher usage per customer. And I think that derives in part from a saturation of energy efficiency and distributed generation on our system. It's also supported by the continued customer growth that we're seeing. We were at 2.1% for the quarter, again, above the midpoint of our customer growth guidance range. So certainly continuing to see residential outperform relative to our expectations and that sustained inflow of people as opportunities for jobs in Arizona continue to grow is something that we would expect to continue to see. And on the C&I side, 12.7% for the quarter. If you think about it, our long-term range is 4% to 6% for C&I, 5% to 7% total, 4% to 6% to the large C&I. Given C&I is half of our sales, that 12.7% corresponds to something above 6%, if you kind of divide it by 2, which suggests that we're at or above the top end of our long-term C&I growth rate. And the fact that, that 4,500 megawatts of large C&I that's ramping up, that ramp continues even beyond that guidance period, right? It takes beyond 2030 to get to the full ramp-up of that 4,500 megawatts would suggest that the run rate continues and that certainly is a pace -- as we look at the ramp, we'll continue to monitor the pace and see if there is upside to the guidance that we're providing. Alexander Calvert: Got it. Makes sense. And then just maybe just touching on the upcoming IRP filing. Maybe just a little -- if you could provide a little insight into sort of how you're thinking about the filing and how that is shaping up around the 4.5 gigawatts of committed load. With the TSMC recent announcement, is that already assumed in the 20 gigawatts of uncommitted load? Or is that incremental? And just are you -- do you remain on track to file by the end of October? Theodore Geisler: Yes. Thanks, Alex. We're on track to file the IRP by the end of October. And our approach to that remains the same, which is we will include in the load forecast all committed customer growth, that will include the full intended build-out of TSMC because we're continuing to commit to support their full investment plan. So we continue to work with TSMC on what their announcement means in terms of timing of that capacity addition as well as what the ramp looks like. And as we continue to get more confirmation and clarity on that, that will make its way into the IRP and our intention is to have our latest thinking on that, combined with all our other committed customer growth included in the IRP. As we contract for specific projects from the uncommitted queue, then that would be above and beyond what we assume in the IRP, and you would then add corresponding resources with that to be commensurate with those load additions. Operator: Your next question is coming from Richard Sunderland from Truist Securities. Richard Sunderland: I just wanted to follow up on that last point and try to understand, again, sort of the TSMC update, where I know we'll see more details in the IRP, but what exactly it means for those additional conversations in the uncommitted queue in your Desert Sun plant opportunity overall? Could you speak a little bit more to kind of those knock-on effects out of the TSMC announcement and how you think that impacts the uncommitted side of the opportunity over the next 12 months? Theodore Geisler: Yes, sure, Richard. So just stepping back for a moment, TSMC is now committed to 12 facilities that includes both their fabs as well as advanced packaging. And then in addition to that, of course, is the R&D part. There's also a continued acceleration of schedule for them as we work to be able to support their build-out. And I think we've mentioned before their prior commitment prior to this incremental $100 billion investment was over 1 gigawatt of demand. We're working with them now on what this incremental investment means in terms of additional capacity, timing of ramp for all facilities. We're committed to be able to meet their needs and be able to serve them, but we're refining with them now on timing expectations, facilities needed to be able to support it and what the full build-out means in terms of electric demand. So details on total capacity ramp schedule, et cetera, are being finalized, and we'll provide that update as we finalize it with TSMC, but our intent is to have it included in the IRP by the end of October when we file it, given that it is part of our committed customer group. With respect to the uncommitted queue, we continue to be in negotiations on potential projects that may come from that. It's too early to be able to offer any more details and our intent would be as we're able to finalize a contract or contracts from that uncommitted queue that when those are filed, we'd be prepared to detail what that means in terms of incremental capacity and demand coming from the uncommitted queue. Richard Sunderland: Understood. And then I guess, in consideration of the Cholla conversion announcement and some of this other activity, how are you thinking about gas supply overall? And what are you focused on right now in terms of the Desert Southwest projects, siting -- potentially any siting challenges and what have you as that opens up incremental gas capacity in the region? Theodore Geisler: We certainly recognize that as we look in the next decade and beyond, new gas transport supply is going to be needed to continue to reliably support the growth in the region, which is why we contracted with that Desert Southwest pipeline now in anticipation of it getting in service at the end of this decade to prepare for next decade. So we feel comfortable in our ability to reliably serve the current gas supply through the end of this decade. But as we look into next decade, that pipeline is going to be critical to be able to continue to expand at the rate that we desire. The pipeline is in early stages of development, although it continues to move along as expected. We believe it's on schedule. They continue to work with stakeholders, community members, and work through the filing process. I know on July 9, FERC opened their scoping process for review. And I think the developer is doing a good job responding to feedback and ensuring that they continue to focus on planning the route where it meets the least impact as possible. We have to keep in mind, it does help that it's largely following the path of the existing pipeline that's there. This is not, I'll call it, a greenfield route where there's no pipeline that exists. The existing pipe connecting Permian Basin to Southern Arizona follows largely the same route. This will be planned in. This is just simply going alongside it for most of the way. So we feel good about that. But at this point, things seem to be moving on track, and we'll look forward to taking service from that pipe when it gets in service, and that will be important for our expansion plans in the next decade. Operator: Your next question is coming from Julien Dumoulin-Smith from Jefferies. Julien Dumoulin-Smith: I just wanted to follow up from the earlier sales growth question. I mean, how are you thinking about that transposing itself into the IRP? And then what drove the IRP move from August to the end of October? And did the scope change at all? I mean just given all the different moving parts on load and large loads here? Just can you elaborate a little bit? Should we expect the annual ramp in the resource portfolios in that filing specifically? Again, what should we be looking for in that in as much as this could be something of a clue into a more formalized update next year? Theodore Geisler: Yes, Julien, I can speak to the IRP aspect and then invite Andrew to speak to any other aspects regarding long-term load growth trends. But as we continue to finalize the analysis of the IRP and work with stakeholders, there's a lot of variables that we thought were important to try to capture accurately within this IRP. Obviously, the IRP is a snapshot in time and it seems like immediately when you file that, things continue to update. And given the volume of activity that continues to progress, we thought it was more prudent to be able to capture some of the things that were being updated this year and finalize that in the IRP. One of those being the likelihood of being able to convert Cholla, and we felt it was prudent to be able to capture that in the IRP. Another is knowing that we've been working with TSMC on their expansion plans and the desire to be able to capture the latest capacity additions and ramp schedule for them in the IRP. And then again, continuing to monitor the robust growth trends that we're seeing in the service territory and making sure that the load forecast we include in the IRP really does reflect these latest growth trends. And for all those reasons, plus ensuring we are able to take time and engage with stakeholders in a constructive manner before the filing, we felt it was better to wait until October so that we could file the most up-to-date analysis in the IRP as possible. And I think that's going to pay off because back to one of your questions, what you should expect from this IRP is really our latest thinking on the committed load growth and the ramp of that load growth. An example of that is notwithstanding the robust year-over-year weather-normalized sales growth. We've seen the TSMC fab contribution is relatively flat year-over-year. Now we expect the majority of their ramp to be coming here soon and progressing in a strong manner each year from this point out. But we want to be able to detail out in the IRP, the details of what that growth timing is coming from chip manufacturing versus data centers versus the traditional residential and C&I growth. And I think the 4.5-plus gigawatts of our committed queue, this will be the first line of sight that we're able to offer in terms of the timing of that ramp and the resources needed to be able to serve it. So that will probably be the best insight that will come from the IRP. Outside of that, it'll show the big buckets of resources needed to be able to serve it and we'll fill in those buckets as we get in the action window of each time period. Julien Dumoulin-Smith: And just to clarify, this meaningfully ahead of plan sales growth thus far includes a flat TSMC thus far year-to-date, if I'm hearing you right? And then separately, in addition to that, just to clarify this. Also, how do you think about the 2025 all-source RFP? And when do you expect those decisions to land in as much as that seems to be coming in and around the time line for this IRP as well? I know you've almost got these things back to back. As we see across the industry, these kind of pancaked RFPs and IRPs, but does that dictate -- when does that come out here on the all-source here from '25? Theodore Geisler: Yes. On your first point, you're correct. The production from TSMC has been relatively flat year-over-year. The majority of their demand increases is coming very soon and will progress more rapidly as we get into next year and going forward. But I think that's noteworthy that the weather normalized growth that you saw really reflects the diversity in our service territory with robust residential, other manufacturing and small- to medium-sized business. And then, of course, the ramp of some of the existing data centers that are just now starting to occupy. But the bulk, by far, of the TSMC contribution, which is significant is yet to benefit the sales growth actuals. With respect to the RFP, we continue to finalize our evaluation of results, negotiate with counterparties on the resources and expect to be able to have some of those resources contracted by the end of the year. So as we finalize some of those contracts, we'll be in a better position to announce what comes from that RFP. But our aim is to get as far along in that process as possible at the end of this year. And then, of course, as normal, we'll roll right into another RFP when that's done. Operator: Your next question is coming from Travis Miller from Morningstar. Travis Miller: Just going on the rate case. Wondering if you could characterize any thoughts, surprises, non-surprises in the conversations so far in the filings so far? Theodore Geisler: Yes. I'd say, generally speaking, we're very pleased with how the hearing wrapped up. It was a long hearing, 31 days. But that provided an incredibly robust opportunity for a very strong evidence on the record. And that's probably the best thing that came from the hearing. We have very strong evidence on the record for supporting our positions, supporting the need to be able to address regulatory lag and come up with a sustainable cost recovery framework going forward. And I also think that it's noteworthy how constructive commission staff was on many positions as well as the time that the administrative law judge took to understand the issues, understand the positions and make sure that the facts and evidence was able to be put on the record. That will help us given how substantive this case is with respect to not just the traditional recovery of revenue requirement, but more importantly, creating a new process for sustainable cost recovery going forward. That said, we're in the briefing stage. So briefs will be filed August 27 and again on September 11. And then we're in a bit of a holding pattern until the recommended order comes out here in Q4. We continue to be very confident in the ability for this case to be resolved this year. A final open meeting likely towards the end of the year, but we're on track with that schedule as we've been contemplating all year long. Travis Miller: Okay. Great. And then on transmission, what are the next steps? What are the signals you're looking for to start putting some of those identifying projects for the upside that you've been talking about on the transmission side? Andrew Cooper: Sure, Travis, it's Andrew. We've really begun to lean into the transmission opportunity, both to serve customer growth and advance the resiliency of our system as well as reach more out-of-footprint resources. And you could see it in the kind of shift in our CapEx plan from $300 million to $400 million or so of core transmission spending to the types of figures that you see in our 3-year guidance window towards the end of the period where those numbers are up pretty substantially. And if you look back to the beginning of this decade, we were at -- in the $200 million a year range on CapEx for transmission. So we are beginning to execute beyond those core transmission projects on our strategic transmission opportunities. We file a biannual plan with the commission, which includes a number of the projects that we're doing that, again, extend to access resources further afield, build the resiliency of the system and keep up with growth. There are some pretty large projects in there, and we're just beginning to unlock the capital associated with those. There's a substantial project that creates resiliency on the line that connects the Four Corners region into Cholla, and ultimately, down into the load pocket here. And that's a multi potential $1 billion project, several hundred mile line. And so for projects like that, we've got a great contract with our FERC Formula rate and our transmission adjuster. We collect wheeling revenue, which helps to create affordability for our existing customers. And there, it's a matter of working those projects in the development stage to ensure that we can kind of sectionalize and energize the segment so that we reduce the regulatory lag there. But we've really continued to focus on our FERC jurisdictional assets given the formula rate that we have in place here today and the massive investment needs that our transmission system has. And you see it in the results even year-over-year, we continue to grow transmission revenue. Any distortion you see in Q2 is really just a result of timing of the true-up. But year-over-year, those increases continue as we file this formula every year in June, our transmission adjuster with the commission. And so we now have new transmission rates in effect as of June as well. Operator: Your next question is coming from Paul Patterson from Glenrock Associates. Paul Patterson: Just a few questions left. One is there was a primary election and some people sort of were surprised by the outcome there. And I was just wondering if you had any -- what you could share, if anything, on sort of your takeaways or insights on the election and what's coming up here? Theodore Geisler: Yes, sure. I think it's important to note that we have the ability to constructively work with any commissioner. I think it was consistent with prior election results that we saw Commissioner Thompson be the top vote-getter. So that wasn't a surprise. But when you got below him, the other 2 candidates in the Republican primary, they were pretty close to one another. So while it wasn't a wide margin, it certainly did result in Chairman Myers being slightly lower than Dr. Heap, who was the higher vote-getter between the two. I think stepping back from that, though, the key that I would keep in mind and focus on is that we design our strategy around serving customers reliably at the lowest cost possible, and doing that while keeping up with unprecedented growth. And we strongly believe that's the right strategy regardless of who sits on the commission. Importantly, we execute that strategy very well. And we found over the years with commissioners that when we deliver top-tier reliability, top-tier customer satisfaction, keep residential rates below the national average like they are right now while keeping up with growth that, that should resonate with any commissioner that's on the bench. Also importantly, and I mentioned this before when we were talking about the rate case hearing that our commission staff is a very important party to constructive regulatory environment, and they aren't elected. They're a critical part of the process now and going forward and are relied upon heavily by any commissioner who sits in those seats with their expert independent analysis. And I'm very confident in our constructive working relationship we have with staff and their ability to listen to the key issues and do what's right for Arizonans. So to sum it up, we know all the candidates in this race. We're confident in our ability to earn constructive outcomes on the merits of how we do business because the merits are strong. And at the end of the day, that's what's going to carry us forward beyond any individual election. Paul Patterson: Absolutely. Awesome. So second question is the Colorado River and just sort of national reports, looks a little dire. So I know that -- I think that Palo Verde is insulated operationally from using the Colorado River and what have you. But I guess my question is that given the drought conditions, is there any operational issue short term regarding the utility? Or any longer-term issues that this drought and this sharp reduction that the federal government is proposing, I think, with respect to Arizona's share and what have you. Is there any impact longer term, I guess, in terms of -- or near term in terms of what seems like kind of dramatic reductions in water? Theodore Geisler: Yes, Paul, we don't anticipate any operational impact at all as a result of the negotiations on Colorado River allocation. Importantly, as you said, Palo Verde operates on a 100% recycled wastewater, which we're very proud of. It's the only nuclear plant in the world not on a body of water, and we're able to maintain that sustainable operation through the wastewater treatment that we use. Also, I think it's noteworthy that we've been able to keep up with record growth while cutting our overall water usage for operations in half over the last 10 years. So we've got a pretty good sustainable story in terms of contributing to water savings as a company while keeping up with growth. With respect to the long term, certainly, there needs to be a reallocation framework designed among the lower basin states and the upper basin states to match actual water allocation with the current levels of the Colorado River. But we view that as a long-term framework that may result in changing economics for water, but there's a variety of long-term solutions that could fill in the gap in the shortfall of the Colorado River. It's just a matter of developing those long-term solutions and who pays for it. So it's more of an economic issue than it is an impact of no water supply. And Arizona has a variety of water resource supply. Colorado River being just one of them. So we're certainly paying attention to that, want to make sure that the states are able to continue to collaborate and find a durable solution that meets everyone's expectations. Arizona put forward a reasonable solution that helps reallocate water usage in 2027, 2028 that should meet the intent of the new operating guidelines. And then I know there's longer-term solutions being evaluated from there. So it's a situation to continue to monitor, but we believe it's more about long-term economics than it is water supply. Operator: [Operator Instructions] Your next question is coming from Steve D'Ambrisi from RBC Capital. Stephen D’Ambrisi: Just a quick one. Most of my questions have been asked and answered, but just a quick follow-up on the TSMC announcement. Obviously, the ramp rate is a critical factor. But just given the commentary that TSMC's previously announced investment represented more than a gigawatt of demand. Can we use that prior $165 billion for greater than 1 gigawatt as like a rule of thumb for potential power demand from the incremental $100 billion? And just -- or if there's anything you could highlight that would potentially change the intensity per dollar of capital invested in this announcement versus prior announcements? Theodore Geisler: Yes, Steve, I think directionally, that's probably a fair general assumption, but we're still working through the details of what each fab will require as well as the ramp schedule of that. And certainly, the fabs do differ with respect to the type of chips they manufacture and the energy intensity. The more advanced the chips tends to be, the more energy intensive. And so I think there could be variation to that rule, and we'll be prepared to detail more about that when we finalize things with TSMC and hopefully able to put those details in the IRP as well. But for the purpose of just a general directional estimate, I think the way you outlined it may make sense. Stephen D’Ambrisi: Okay. And then just, again, like on the sales for the year, I mean running -- the C&I running like 13% or 14% year-to-date and that being half of your total sales. I mean, just simplistically, right, that seems like that's almost all of your -- above the top end of your long-term sales growth just at C&I. And so can you just -- is there timing or certain things ramping earlier? Or are you just really that far above because it seems like resi is going pretty well as well? Andrew Cooper: Yes. Steve, it's a combination of things, right? The ramp schedules from data center customers have always been as AI remains kind of a nascent field, our forecasting has to kind of keep up with what our customers are saying and our lived experience over the last 5 years of having data center customers. And we certainly see these levels as pretty robust. There are some elements of it that we expect would be a faster ramp. But part of it is that our customers are trying to figure out the use case going on inside their box. And so we continue to refine our own forecast as we go along and find very favorable what we're seeing from these customers as they continue to move forward. We've got half a dozen different campuses going at various stages of ramp. As Ted mentioned, not a lot of change year-over-year from TSMC, but that broader ecosystem of new manufacturers coming in and folks outside the data center industry beginning to lay down facilities in Phoenix has continued to contribute to the length of the runway. But the residential customer story was a big piece of it, and that increased usage per customer, the continued customer growth. Even though more of it now from residential is coming in the off-peak hours, which comes at a lower price, it's still contributing a positive margin overall to the story. So it's been the diversity of the growth. It's been continuing to refine the data center ramp rates as we understand what one data center is doing within the facility versus another. And just the ongoing dialogue with our customers will help us to continue to refine whether there is upside to those numbers to that long-term rate over the long term. But certainly, the runway of it is pretty robust. Operator: That completes our Q&A session. Everyone, this concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation. Before you buy stock in Pinnacle West Capital, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Pinnacle West Capital wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $411,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,252!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 11, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Pinnacle West Capital (PNW) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Pinnacle West Capital Corporation? Here are five stocks we like better. Second-quarter earnings fell to $1.43 per share, down $0.15 year over year, as higher interest and depreciation costs and lower transmission revenue outweighed strong demand. Pinnacle West expects 2026 earnings to finish at the top end of its $4.55–$4.75 guidance range. Weather-normalized sales rose 9.6% and customer growth reached 2.1%, driven by residential demand and expanding data center, semiconductor and manufacturing customers. TSMC’s planned additional $100 billion Arizona investment could significantly increase future electricity demand, which will be addressed in the company’s resource plan expected by October. Pinnacle West is planning major infrastructure investments, including a natural-gas conversion at Cholla that could add 380 megawatts by 2029 and up to $440 million in capital spending. The company also advanced transmission projects, its Arizona rate case and financing initiatives to support growth and cost recovery. Are defensive sectors ready to outshine growth in 2024? Pinnacle West Capital (NYSE:PNW) reported second-quarter 2026 earnings of $1.43 per share, down $0.15 from the same period a year earlier, as higher interest expense, depreciation and amortization, and lower transmission revenue more than offset strong weather-driven demand and customer growth. Chief Financial Officer Andrew Cooper said the company expects to finish 2026 at the top end of its previously issued earnings guidance range of $4.55 to $4.75 per share. The utility reiterated all other aspects of its outlook. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control Ready for the Utilities Rebound? Here Are the Best Picks “We had a solid second quarter supported by disciplined execution across the business,” Chairman, President and CEO Ted Geisler said during the company’s earnings call. Weather-normalized sales increased 9.6% year over year in the second quarter, while customer growth reached 2.1%. Cooper said hotter conditions, including an early start to triple-digit temperatures in the Phoenix area, supported cooling demand during the period. → 3 Drone Stocks That Should Soar After the Summer Slump NRG Fastest Mover in S&P As Activist Investor Pushes For Change Residential sales rose 5.6%, while commercial and industrial sales increased 12.7%, driven by expansion among data center, semiconductor and other advanced-manufacturing customers. Cooper said the quarter’s growth was diversified across residential and commercial customer categories. The company did not raise its 2026 sales-growth guidance, though Cooper said year-to-date weather-normalized sales growth has been tracking closer to Pinnacle West’s longer-term outlook. The company’s long-term guidance calls for total sales growth of 5% to 7% through 2030, including 4% to 6% growth for large commercial and industrial customers. → Why Rare Earth Processing Could Be the Real 2027 Opportunity Geisler said Taiwan Semiconductor Manufacturing Co.’s existing facilities had a relatively flat year-over-year impact on sales so far, with the bulk of that customer’s anticipated demand growth still ahead. He said recent sales growth instead reflects a combination of residential demand, other manufacturers, small and medium-sized businesses, and data centers beginning to occupy facilities. On Aug. 2, Arizona Public Service, Pinnacle West’s utility subsidiary, recorded an all-time peak demand of 9,164 megawatts, more than 500 megawatts above the prior-year record, according to Geisler. TSMC announced an additional $100 billion investment in Arizona during the quarter, raising its total planned commitment in the state to $265 billion. The company now plans up to 12 advanced fabrication and packaging facilities in north Phoenix, as well as a research-and-development campus, Geisler said. Pinnacle West is working with TSMC to determine the additional investment’s implications for electric capacity needs and the timing of demand ramp-up. Cooper said the utility’s integrated resource plan, now expected to be filed by the end of October, will include the company’s latest view of TSMC’s full planned build-out along with other committed load growth. The utility has identified 4.5 gigawatts of committed large commercial and industrial load growth. Geisler said the forthcoming resource plan is expected to provide the company’s first detailed view of the timing of that demand ramp and the resources needed to serve it. Pinnacle West delayed the integrated resource plan filing from August to October to incorporate the latest developments involving TSMC, customer-demand trends and the planned Cholla plant conversion, Geisler said. The company recently announced plans to convert two retired coal-fired units at its Cholla Power Plant to natural gas. The project is expected to provide about 380 megawatts of dispatchable generation by 2029. Cooper said the project could add up to approximately $440 million of capital investment, primarily in 2027 and 2028, and is not included in the company’s current capital-expenditure outlook. Geisler said the company believes its existing natural-gas supply can support operations through the end of the decade. Pinnacle West has contracted for capacity from the proposed Desert Southwest pipeline, which it expects to be important for supporting expansion in the following decade. The project is in early development, and Geisler said it is proceeding on schedule. The utility is also increasing transmission investment to improve system resilience, connect to more distant resources and support customer growth. Cooper pointed to a potential multibillion-dollar transmission project connecting the Four Corners region, Cholla and the Phoenix load area. He said the company is focusing on projects eligible for recovery through its Federal Energy Regulatory Commission formula rate and Arizona transmission adjuster. Pinnacle West concluded 31 days of hearings in its Arizona rate case on July 7 and has entered the briefing phase. Initial briefs are due Aug. 27, followed by reply briefs on Sept. 11. The company expects an administrative law judge’s recommended opinion and order later this year, followed by a final Arizona Corporation Commission decision before year-end. Geisler said the hearing created a strong evidentiary record, particularly regarding the company’s request for a sustainable cost-recovery framework intended to address regulatory lag. On financing, Cooper said Pinnacle West used the remaining capacity under its existing $900 million at-the-market equity program and filed a new $500 million ATM program to provide further funding flexibility. During the second quarter, the company also issued $500 million of senior unsecured notes to refinance maturing notes and support its funding strategy. Second-quarter operations and maintenance expense declined modestly from a year earlier. However, higher debt balances and interest rates increased interest expense, while depreciation and amortization rose as the Agave, Ironwood and Sundance investments entered service. Transmission revenue declined in the quarter largely because of a final true-up adjustment related to 2025, Cooper said. Pinnacle West Capital Corporation is a publicly traded utility holding company headquartered in Phoenix, Arizona. Through its principal subsidiary, Arizona Public Service Company (APS), Pinnacle West generates, transmits and distributes electricity to more than one million residential, commercial and industrial customers across central and southern Arizona. The company's regulated operations focus on delivering safe, reliable power while meeting evolving environmental standards. The company's diversified generation portfolio includes natural gas–fired plants, the nuclear-powered Palo Verde Generating Station—the largest nuclear facility in the United States by net output—plus growing investments in solar and battery storage projects. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Pinnacle West Capital Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was driven by robust 2.1% customer growth and 9.6% weather-normalized sales growth, fueled by a diverse mix of data centers and advanced manufacturing. Management attributed the 12.7% commercial and industrial sales surge to the ongoing expansion of the semiconductor ecosystem and data center ramp-ups. The state's economic corridor is expanding significantly, highlighted by TSMC's additional $100 billion investment, bringing their total commitment to $265 billion for up to 12 facilities. Operational strategy focuses on an 'all of the above' resource approach, including the conversion of retired coal units at Cholla to 380 megawatts of natural gas by 2029. Strategic positioning in transmission is being prioritized to enhance reliability and access regional markets, utilizing FERC Formula rates for timely cost recovery. Management noted that residential sales growth of 5.6% was supported by a secular trend toward higher usage per customer and a saturation of energy efficiency programs. A new all-time peak demand record of 9,164 megawatts was set on August 2, exceeding the previous record by over 500 megawatts and validating system readiness. The company expects to finish 2026 at the top end of its earnings guidance range of $4.55 to $4.75 per share, assuming normal weather for the remainder of the year. The upcoming Integrated Resource Plan (IRP) filing in October will incorporate the full intended build-out of TSMC and the 4.5-plus gigawatts of committed load growth. Management anticipates approximately $440 million of incremental capital investment for the Cholla conversion project, primarily weighted toward 2027 and 2028. Long-term sales growth is expected to track within the 5% to 7% range through 2030, with potential upside as large commercial and industrial loads continue to ramp. A new $500 million ATM equity program has been filed to provide ongoing funding flexibility following the full utilization of the previous $900 million program. The pending rate case has moved into the briefing phase, with a final commission decision expected before the end of 2026 to address regulatory lag. Transmission revenues in Q2 were negatively impacted by a final true-up adjustment related to 2025, though the long-term trajectory remains positive. Management identified the need for new gas transport supply in the next decade, specifically citing the Desert Southwest pipeline project as critical for expansion. Water supply risks are being managed through the use of 100% recycled wastewater at Palo Verde, insulating the plant from Colorado River allocation issues. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management indicated that the 12.7% C&I growth suggests they are at or above the top end of long-term growth rates, with a sustained runway beyond 2030. The growth is diversified across residential, data centers, and the semiconductor ecosystem, with residential seeing higher usage per customer. TSMC's commitment now includes 12 facilities; the incremental $100 billion investment will be detailed in the October IRP as part of the committed load. Negotiations continue for projects in the uncommitted queue, which would represent growth above and beyond the current IRP forecast once contracted. Evaluation of results is ongoing, with expectations to have resources contracted by the end of 2026. The company plans to transition immediately into a subsequent RFP process to maintain pace with load growth. Capital spending is shifting toward strategic transmission projects, including a potential $1 billion project connecting the Four Corners region. The FERC Formula rate allows for reduced regulatory lag and generates wheeling revenue that supports retail customer affordability.

Lower second-quarter financial results align with company expectations as operating performance, reliability remain strong Robust customer growth and increased energy demand driven by early summer heat Customer support and financial assistance resources enhanced for peak summer season PHOENIX, August 04, 2026--(BUSINESS WIRE)--Pinnacle West Capital Corp. (NYSE: PNW) today reported consolidated net income attributable to common shareholders of $178.6 million, or $1.43 per diluted share of common stock, for the quarter ended June 30, 2026. This result compares with consolidated net income of $192.6 million, or $1.58 per diluted share, for the same period in 2025. The 2026 quarterly results reflect a decrease of about $14 million, primarily as a result of higher interest charges; higher depreciation and amortization; and lower transmission service revenues. These negative factors were partially offset by the favorable impacts of the effects of weather; customer growth and usage; decreased operations and maintenance expenses; and lower taxes. "Summer arrived early this year, with temperatures reaching 105° F back in March. As a result, our customers turned on their air conditioners sooner than usual and continued using them heavily even after temperatures returned to levels similar to last year," said Pinnacle West Chairman, President and Chief Executive Officer Ted Geisler, citing a 7% increase in residential cooling degree days in the 2026 second quarter versus the same period a year ago. "This usage drove higher energy demand and sustained load growth and contributed to financial results within our expectations." Operationally, Geisler said Arizona Public Service Co. (APS) employees delivered strong performance throughout the second quarter, maintaining reliable service during extreme summer heat and increased energy demand. During the period, APS achieved robust residential customer growth of 2.1% and weather-normalized sales growth of 5.6%. Overall, customer growth was 2.1%, while total sales increased 9.6%. Supporting Customers Through the Summer While APS remains focused on delivering safe, reliable power throughout the summer, the company is also expanding existing programs and resources to help customers manage higher seasonal energy bills. As Arizona enters the peak summer season, APS has expanded its customer support through enhanced Care Center resources, customer education, targeted communications and community outreach. These efforts help connect customers with information, tools and assistance designed to support them during the peak summer season. Customer resources include webinars, educational materials, bill-management options and personalized support from customer advisors. Bringing APS’s customer-first commitment to life, Geisler highlighted a recent example of APS employees going above and beyond to support some of the company’s most vulnerable customers: Ahead of a planned outage in Prescott Valley, Ariz., employees responded to concerns from a local elderly and disabled housing community about outage communications. By collaborating across Customer Experience, Public Affairs and Transmission & Distribution teams, this particular outage was delayed to provide additional customer support and education. "When residents shared concerns about how a planned outage could affect their community, our employees took the time to listen and respond," said Geisler. "By providing personalized outreach, answering questions, verifying customer information, sharing preparedness resources and connecting residents with APS assistance programs, we were able to better support customers and strengthen trust within the community. The experience also helped us identify opportunities to improve future outreach and communication with customers who may need additional support." Enhancing the APS Safety Net Program APS also enhanced its Safety Net program that expands support for customers and their designated emergency contacts. The updated program provides earlier notifications about past-due bills, potential disconnection notices and outages. This added awareness can help customers avoid service interruptions and connect with available support sooner. APS also expanded enrollment opportunities through customer service interactions and digital channels, making participation more accessible. Additionally, APS offers financial assistance programs, including discounts of up to 25% or 60% for eligible vulnerable customers; emergency utility bill assistance offering up to $1,000 annually; and APS CARE (Crisis Assistance Relief Effort), a Salvation Army-administered service providing up to $500 annually in emergency energy bill assistance. To ensure customers in need are connected to these programs, the company partners with more than one hundred community action agencies across its service territory to train representatives who serve our shared customers. Customers are encouraged to visit aps.com/save for a full list of assistance programs or call (602) 371-7171 or (800) 253-9405 for support, available 24/7 in English and Spanish. APS’s call center answers 75% of customer calls within 30 seconds, and the company’s mobile app enables customers to quickly and easily find the information they need when they need it. Strengthening Reliability for Customers Supporting customers extends beyond assistance programs and outage preparedness, added Geisler. APS also is investing in the infrastructure and resources needed to provide the reliable energy service customers count on at the lowest cost possible. Toward that end, APS recently announced plans to convert two retired coal-fired units at the Cholla Power Plant near Joseph City to natural gas, bringing about 380 MW of reliable, dispatchable energy back online by 2029 – enough to power about 61,000 Arizona homes. By repurposing existing infrastructure and transmission facilities, Geisler said the project will help meet Arizona’s growing energy demand in a cost-effective way while supporting grid reliability, complementing renewable energy resources, and creating jobs and economic benefits for Navajo County. The project remains subject to regulatory approvals and is expected to begin construction in 2028. Financial Outlook For 2026, the Company continues to estimate its consolidated earnings will be within a range of $4.55 to $4.75 per diluted share on a weather-normalized basis. Key factors and assumptions underlying this outlook can be found in the second-quarter 2026 earnings presentation slides at pinnaclewest.com/investors. Conference Call and Webcast Pinnacle West invites interested parties to listen to the live webcast of management’s conference call to discuss the company’s financial results and recent developments, and to provide an update on the company’s longer-term financial outlook, at noon ET (9 a.m. Arizona time) today, Tuesday August 4. The webcast can be accessed at pinnaclewest.com/presentations and will be available for replay on the website for 30 days. To access the live conference call by telephone, dial (888) 506-0062 or (973) 528-0011 for international callers and enter participant access code 293662. A replay of the call also will be available at pinnaclewest.com/presentations or by telephone until 11:59 p.m. ET, Tuesday, Aug. 11, 2026, by calling (877) 481-4010 in the U.S. and Canada or (919) 882-2331 internationally and entering replay passcode 54218. General Information Pinnacle West Capital Corp., an energy holding company based in Phoenix, has consolidated assets of about $32.6 billion, about 6,200 megawatts of generating capacity and approximately 6,600 employees in Arizona and New Mexico. Through its principal subsidiary, Arizona Public Service, the company provides retail electricity service to about 1.5 million Arizona homes and businesses. For more information about Pinnacle West, visit the company’s website at pinnaclewest.com. Dollar amounts in this news release are after income taxes. Earnings per share amounts are based on average diluted common shares outstanding. For more information on Pinnacle West’s operating statistics and earnings, please visit pinnaclewest.com/investors. FORWARD-LOOKING STATEMENTS This press release contains forward-looking statements based on current expectations. These forward-looking statements are often identified by words such as "estimate," "predict," "may," "believe," "plan," "expect," "require," "intend," "assume," "project," "anticipate," "goal," "seek," "strategy," "likely," "should," "will," "could," and similar words. Because actual results may differ materially from expectations, we caution readers not to place undue reliance on these statements. A number of factors could cause future results to differ materially from historical results, or from outcomes currently expected or sought by Pinnacle West or APS. These factors include, but are not limited to: our ability to achieve timely and adequate rate recovery of our costs through our regulated rates and adjustor recovery mechanisms, including returns on and of debt and equity capital investment; the impacts of federal, state, and local laws, judicial decisions, statutes, regulations, and FERC, NRC, EPA, ACC, and other agency requirements, including as they are changed by legislative and regulatory action as well as executive orders, such as those relating to tax, environment, energy, nuclear plants, and deregulation of the retail electric market; our operation of Palo Verde is subject to substantial regulatory oversight and potentially significant liabilities and capital expenditures; we are subject to numerous environmental laws and changes to existing laws, or new laws, may increase our costs and impact our business; the potential effects of climate change on our electric system, including as a result of weather extremes, such as prolonged drought and high temperature variations in the area where APS conducts its business, as well as the impacts of policy and regulatory changes introduced to address climate change; co-owners of our jointly owned generation and transmission facilities may have unaligned goals; the willingness or ability of counterparties, participants, and landowners to meet contractual or other obligations or extend the rights for continued generation and transmission operations; deregulation of the electric industry and other factors, such as large customers developing large, utility scale generation to serve their energy needs, may result in increased competition; variations in demand for electricity, including those due to weather, seasonality (including large increases in ambient temperatures), the general economy or social conditions, customer and sales growth (or decline), data center growth (or lack thereof), including to support the AI industry, the effects of energy conservation measures and DG, and technological advancements; wildfires, including those arising as a result of climate change, extreme weather events, or the expansion of the wildland urban interface; generation, transmission, and distribution facilities and system operating costs, conditions, performance, and outages; our ability and efforts to meet current and anticipated future needs for generation and transmission and distribution facilities in our region at reliable levels, including factors affecting our ability to acquire and develop new resources to serve this load as well as difficulties in accurately forecasting load growth, particularly from high load energy users; availability of fuel and water supplies as well as the volatility and costs of fuel and purchased power; the direct or indirect effect on our facilities or business from cybersecurity threats or intrusions, data security breaches, terrorist attack, physical attack, severe storms, or other catastrophic events, such as fires, explosions, pandemic health events, or similar occurrences; risks inherent in the operation of nuclear facilities, including spent fuel disposal uncertainty; the development of new technologies and the impact they have on the retail and wholesale electricity market and the impacts of our adoption or failure to adopt such technologies; the availability and retention of qualified personnel and the need to negotiate collective bargaining agreements with union employees; the cost of debt, including increased cost as a result of rising interest rates, and equity capital and our ability to access capital markets when required as well as the impacts a credit rating downgrade would have on us; the investment performance of the assets of our nuclear decommissioning trust, captive insurance cell, coal mine reclamation escrow, pension, and other postretirement benefit plans, and the resulting impact on future funding requirements; Pinnacle West’s cash flow depends on the performance of APS and its ability to make dividends and distributions; potential shortfalls in insurance coverage; Pinnacle West’s ability to meet its debt service obligation could be adversely affected because its debt securities are structurally subordinated to the debt securities and obligations of its subsidiaries; the liquidity of wholesale power markets and the use of derivative contracts in our business; policy changes in Arizona or other states through ballot initiatives or referenda may increase our cost or operations or affect our business plans; general economic conditions, such as tariffs, inflation, and other supply chain constraints, as well as uncertainties associated with the current and future economic environment and conditions in Arizona; and disruptions in financial markets could adversely affect our cost of and access to credit and capital markets. These and other factors are discussed in the most recent Pinnacle West/APS Form 10-K and 10-Q along with other public filings with the Securities and Exchange Commission, which readers should review carefully before placing any reliance on our financial statements or disclosures. Neither Pinnacle West nor APS assumes any obligation to update these statements, even if our internal estimates change, except as required by law. View source version on businesswire.com: https://www.businesswire.com/news/home/20260804319083/en/ Contacts Media Contact: Alan Bunnell (602) 250-3376Analyst Contact: Amanda Ho (602) 250-3334Website: pinnaclewest.com

Pinnacle West (PNW) came out with quarterly earnings of $1.43 per share, missing the Zacks Consensus Estimate of $1.49 per share. This compares to earnings of $1.58 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -4.03%. A quarter ago, it was expected that this power company would post a loss of $0.03 per share when it actually produced earnings of $0.27, delivering a surprise of +1000%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Pinnacle West, which belongs to the Zacks Utility - Electric Power industry, posted revenues of $1.46 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 3.94%. This compares to year-ago revenues of $1.36 billion. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Pinnacle West shares have added about 13.7% since the beginning of the year versus the S&P 500's gain of 11%. While Pinnacle West has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Pinnacle West was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $3.11 on $1.88 billion in revenues for the coming quarter and $4.74 on $5.56 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Utility - Electric Power is currently in the bottom 29% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Evergy Inc (EVRG), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This electric utility is expected to post quarterly earnings of $0.82 per share in its upcoming report, which represents no change from the year-ago quarter. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Evergy Inc's revenues are expected to be $1.47 billion, up 2.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Pinnacle West Capital Corporation (PNW) : Free Stock Analysis Report Evergy Inc. (EVRG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Pinnacle West Capital Corporation PNW reported second-quarter 2026 earnings of $1.43 per share, missing the Zacks Consensus Estimate of $1.49 by 4.03%. The bottom line declined 9.5% from $1.58 in the year-ago quarter. Revenues for the reported quarter totaled $1.46 billion, which surpassed the Zacks Consensus Estimate of $1.40 billion by 3.93%. The top line increased 7.1% from $1.36 billion recorded in the year-ago quarter. Pinnacle West Capital Corporation price-consensus-eps-surprise-chart | Pinnacle West Capital Corporation Quote Total operating expenses were $1.15 billion, up 9.4% from $1.05 billion in the prior-year quarter. Fuel and purchased power costs climbed 17.1% to $558.5 million, while depreciation and amortization increased 6.3% to $243.2 million.Operating income totaled $305.7 million, down 0.6% from $307.6 million a year ago. Higher fuel and purchased power costs largely offset the benefit of increased revenues and lower operations and maintenance expenses.Total interest expenses were $122.2 million, up 19.8% from $102 million in the prior-year period. As of June 30, 2026, cash and cash equivalents totaled $9.1 million compared with $6.6 million as of Dec. 31, 2025.As of June 30, 2026, long-term debt, less current maturities, amounted to $9.78 billion compared with $9.21 billion as of Dec. 31, 2025.Net cash provided by operating activities totaled $629.3 million in the first six months of 2026 compared with $663.3 million a year earlier. Capital expenditures were $1.36 billion versus $1.33 billion in the comparable 2025 period. The company continues to expect its 2026 consolidated earnings in the range of $4.55-$4.75 per share and projects 5-7% long-term EPS growth from the 2024 earnings base. The Zacks Consensus Estimate for the same is pegged at $4.74, higher than the midpoint of the company’s guided range.The company projects its 2026 revenues in the range of $5.56-$5.66 billion.Management expects retail customer growth of 1.5-2.5% and weather-normalized retail electricity sales growth of 4-6%. New large manufacturing facilities and several large data centers are expected to contribute 3-5% to sales growth.Arizona Public Service Company (APS) plans to invest $2.60 billion in 2026, followed by $2.65 billion in 2027 and $2.70 billion in 2028. The 2026 spending plan includes $825 million for generation, $550 million for transmission, $765 million for distribution and $460 million for other projects. The capital program is designed to support reliability and continued growth across the utility's service territory. Pinnacle West currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Evergy EVRG is scheduled to report second-quarter 2026 results on Aug. 6, before the market opens. The Zacks Consensus Estimate for sales is pegged at $1.47 billion, which suggests a year-over-year increase of 2.63%.EVRG’s long-term (three to five years) earnings growth rate is 9.07%. The Zacks Consensus Estimate for 2026 earnings is pinned at $4.25 per share, which implies a year-over-year improvement of 10.97%.Consolidated Edison ED is slated to report second-quarter 2026 results on Aug. 6, after market close. The Zacks Consensus Estimate for earnings is pegged at 74 cents per share, which implies a year-over-year increase of 10.45%.ED’s long-term earnings growth rate is 6.32%. The Zacks Consensus Estimate for 2026 earnings is pinned at $6.09 per share, which implies a year-over-year improvement of 6.84%.Vistra VST is scheduled to report second-quarter 2026 results on Aug. 7, before the market opens. The Zacks Consensus Estimate for earnings is pegged at $1.83 per share, which implies year-over-year growth of 81.19%.VST's dividend yield is 0.92%. The Zacks Consensus Estimate for 2026 earnings is pinned at $9.37 per share, which implies a year-over-year improvement of 78.14%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Pinnacle West Capital Corporation (PNW) : Free Stock Analysis Report Consolidated Edison Inc (ED) : Free Stock Analysis Report Vistra Corp. (VST) : Free Stock Analysis Report Evergy Inc. (EVRG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Earnings Per Share (EPS): $1.43 in Q2 2026, a decrease of $0.15 compared to Q2 2025. Customer Growth: 2.1% increase compared to the second quarter of last year. Weather-Normalized Sales Growth: 9.6% increase compared to Q2 2025. Residential Sales Growth: 5.6% increase during the quarter. Commercial and Industrial Sales Growth: 12.7% increase during the quarter. O&M Expense: Declined modestly compared with the second quarter of last year. Interest Expense: Increased year-over-year, reflecting higher debt balances and a higher interest rate environment. Depreciation and Amortization Expense: Increased due to investments such as Agave, Ironwood and Sundance being placed into service. Transmission Revenues: Lower in the quarter due primarily to a final true-up adjustment related to 2025. Capital Investment: Cholla conversion project could add up to approximately $440 million of incremental capital investment, mostly in 2027 and 2028. Equity Program: Utilized all remaining capacity from the existing $900 million ATM equity program; filed a new $500 million ATM program. Debt Issuance: Issued $500 million of senior unsecured notes at Pinnacle West in Q2. FY2026 Guidance: Reiterated, expecting to finish the year at the top end of the $4.55 to $4.75 per share range. Warning! GuruFocus has detected 14 Warning Signs with PNW. Is PNW fairly valued? Test your thesis with our free DCF calculator. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Strong customer and sales growth, with 2.1% customer growth and 9.6% weather-normalized sales growth in Q2, driven by a diverse mix of residential, data center, and advanced manufacturing customers. Beneficial weather in Q2, with early triple-digit temperatures increasing cooling demand and contributing positively to earnings. Solid execution on capital investment and financing strategy, including issuing $500 million in senior unsecured notes and filing a new $500 million ATM program for funding flexibility. Constructive progress in the rate case, with a robust evidentiary record and a clear procedural schedule, expecting a final commission decision before year-end. Significant growth opportunities from TSMC's additional $100 billion investment in Arizona, which is expected to drive substantial future electricity demand and support long-term growth. Commitment to cost management, with O&M expense declining modestly year-over-year and a focus on reducing O&M per megawatt hour over time. Strong operational performance, including setting a new all-time peak demand record of 9,164 megawatts, demonstrating the system's reliability and readiness for growth. Continued investment in transmission infrastructure, which benefits from constructive FERC formula rate recovery and creates opportunities for additional wheeling revenue. Reiterating guidance and expecting to finish the year at the top end of the earnings guidance range of $4.55 to $4.75 per share. Improved customer satisfaction, with APS ranking in the first quartile for business customer satisfaction and second quartile for residential customers in Escalent's Customer Relationship Index. Earnings per share decreased by $0.15 in Q2 2026 compared to Q2 2025, primarily due to higher interest expense, higher depreciation, and lower transmission revenue. Higher interest expense due to increased debt balances and a higher interest rate environment, which negatively impacted quarterly earnings. Lower transmission revenues in the quarter due to a final true-up adjustment related to 2025. Uncertainty regarding the pace of sales growth, with year-to-date weather-normalized sales growth tracking closer to the longer-term outlook rather than the robust Q2 levels. The rate case involves a complex and lengthy process, with 31 days of hearings and a final decision not expected until late in the year, creating regulatory uncertainty. The Cholla conversion project, while beneficial for capacity, represents up to $440 million of incremental capital investment, which could increase financial burden. Potential for weather and sales variability in the remaining summer months to impact full-year earnings, despite current expectations to hit the top end of guidance. The company has utilized all remaining capacity from its existing $900 million ATM equity program, indicating a need for continued equity financing, which could dilute shareholders. The Desert Southwest pipeline project is in early stages of development and faces potential siting and regulatory challenges, which could impact future gas supply and growth plans. The outcome of the upcoming commission election and the rate case remains uncertain, with potential for changes in regulatory dynamics that could affect future cost recovery. Q: With the recent TSMC announcement of an additional $100 billion investment, is that already assumed in the 20 gigawatts of uncommitted load, and are you on track to file the IRP by the end of October?A: CEO Ted Geisler confirmed the IRP is on track for an end-of-October filing. The load forecast will include all committed customer growth, including the full intended build-out of TSMC, as they are committed to supporting their entire investment plan. They are working with TSMC to finalize the timing of capacity additions and the ramp schedule. Projects contracted from the uncommitted queue would be above and beyond what is assumed in the IRP, with corresponding resources added to match those load additions. Q: Given the robust retail sales growth that exceeded expectations again this quarter, do you see this level of growth continuing for the remainder of the year, and could you revisit your long-term sales guidance?A: CFO Andrew Cooper noted the quarter's growth was robust and diverse, spanning residential and C&I sectors, including data centers and the semiconductor ecosystem. This performance is closer to the long-term sales growth guidance of 5% to 7% provided through 2030. He highlighted a sustained runway for growth, driven by secular trends in residential usage per customer and strong customer growth of 2.1%. C&I sales grew 12.7%, suggesting they are at or above the top end of the long-term C&I growth rate. The ramp of the 4,500 megawatts of large C&I load extends beyond 2030, indicating the run rate continues, and they will monitor the pace for potential upside to guidance. Q: Can you provide insight into the upcoming IRP filing, specifically how it is shaping up around the 4.5 gigawatts of committed load, and what drove the move from August to the end of October?A: CEO Ted Geisler explained the delay to October was to capture the latest developments, including the Cholla conversion, updated TSMC expansion plans, and robust growth trends. The IRP will provide the first detailed line of sight into the timing of the ramp for the 4.5-plus gigawatts of committed queue and the resources needed to serve it. He noted that while year-over-year weather-normalized sales growth is robust, TSMC's fab contribution has been relatively flat, with the majority of their ramp expected to begin soon and progress strongly from this point forward. Q: How are you thinking about gas supply overall, and what are your focuses regarding the Desert Southwest pipeline project and potential siting challenges?A: CEO Ted Geisler stated that new gas transport supply will be needed in the next decade to support regional growth, which is why they contracted with the Desert Southwest pipeline. They are comfortable with current gas supply through the end of this decade, but the pipeline is critical for next decade's expansion. The pipeline is in early development stages and on schedule, with FERC opening its scoping process on July 9. The route largely follows an existing pipeline, which mitigates siting challenges, and they feel good about the project's progress. Q: Can you characterize any thoughts, surprises, or non-surprises in the rate case conversations and filings so far?A: CEO Ted Geisler expressed satisfaction with the conclusion of the 31-day hearing, noting it provided a robust opportunity to build a strong evidentiary record. He highlighted the constructive positions taken by commission staff and the ALJ's thorough understanding of the issues. The case is substantive, covering not just traditional revenue requirement recovery but also creating a new process for sustainable cost recovery. Briefs are due August 27 and September 11, with a recommended order expected in Q4 and a final commission decision before year-end. Q: What are the next steps and signals you're looking for to start identifying projects for the upside on the transmission side?A: CFO Andrew Cooper detailed a shift in CapEx plans, with transmission spending increasing from the $200 million range earlier this decade to substantially higher figures in the three-year guidance window. They are executing on strategic transmission projects, including a potentially $1 billion project to enhance resiliency on the line connecting the Four Corners region to Cholla. The FERC formula rate and transmission adjuster provide a constructive recovery mechanism, and they continue to grow transmission revenue year-over-year, with new rates effective in June. Q: What are your takeaways or insights on the recent primary election results and the upcoming commission changes?A: CEO Ted Geisler noted the results were consistent with prior elections, with Commissioner Thompson as the top vote-getter. He emphasized that their strategy of serving customers reliably at the lowest cost while keeping up with growth is the right approach regardless of who sits on the commission. He highlighted their strong working relationship with commission staff, who are not elected and provide expert independent analysis. He expressed confidence in their ability to earn constructive outcomes based on the merits of their business performance. Q: Given the dire national reports on the Colorado River, is there any operational or longer-term impact on the utility from the drought and proposed reductions in Arizona's water share?A: CEO Ted Geisler stated there is no anticipated operational impact. Palo Verde operates on 100% recycled wastewater, making it the only nuclear plant in the world not on a body of water. They have cut overall water usage for operations in half over the last 10 years while keeping up with record growth. Long-term, a reallocation framework is needed, but he views it as an economic issue rather than a water supply issue, as Arizona has a variety of water resources. He noted Arizona has put forward a reasonable solution for 2027-2028, and the situation is more about long-term economics. Q: Can we use the prior $165 billion investment representing more than a gigawatt of demand as a rule of thumb for the incremental $100 billion TSMC investment?A: CEO Ted Geisler said that directionally, it is a fair general assumption, but they are still working through the details of each fab's requirements and ramp schedule. He noted that fabs differ in energy intensity based on the type of chips manufactured, with more advanced chips being more energy-intensive. They will provide more details when finalized with TSMC, potentially in the IRP, but the general directional estimate is reasonable. Q: With C&I sales running at 13% or 14% year-to-date and being half of total sales, are you really that far above your long-term sales growth guidance?AFor the complete transcript of the earnings call, please refer to the full earnings call transcript.