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Midwest utility provider WEC Energy Group (WEC -0.05%) rarely has surprises in its earnings reports. With about 99% of its earnings coming from regulated utility businesses such as natural gas and electricity, you can pretty much assume that earnings will rise steadily through modest capital spending and rate hikes.

This quarter was no different, really. Some modest gains in electricity sales helped to turn in a solid earnings report for WEC Energy. Here's a quick snapshot of what the company's earnings looked like. 

WEC Energy Group results: The raw numbers 

Results (in Millions, Except Per-Share Data Q2 2016 Q1 2016 Q2 2015
Revenue $1,602 $2,194 $991.2
Operating income $332.1 $589.3 $165.8
Earnings per share $0.57 $1.09 $0.35

Source: WEC Energy Group earnings release.

One thing to keep in mind when looking at WEC's results compared to last year is that the company took a $0.23 per-share charge in the second quarter of 2015 as part of the Integrys acquisition. If we look at the numbers pre-acquisition, the company actually saw a $0.01 per-share decline compared to last year. 

Another thing to keep in mind is that WEC's results are very seasonal because of higher natural gas buying in the winter months. It's not too surprising, therefore, that the company saw a large decline from the prior quarter. 

What happened with WEC Energy Group this past quarter?

  • WEC's Wisconsin utilities increased its electric and natural gas customers by 9,000 and 14,000, respectively. Also, its natural gas utilities in Illinois, Michigan, and Minnesota increased by 15,000 compared to this time last year.
  • On a year-over-year basis, retail electricity sales, excluding Minnesota iron-ore mines, increased 3%, as residential and commercial customers increased consumption by 7.7% and 2.2%, respectively.
  • CEO Alan Leverett took charge of the company on May 1st after former CEO Gale Klappa stepped down and moved to the role as non-executive chairman of the board.

What management had to say

WEC Energy Group had its annual investor meeting on May 5th, where CEO Alan Leverett stressed that, with the Integrys acquisition complete, the company is focusing on simple things, like capital expenditures, to improve reliability and operational efficiency. That isn't that far off from what the company has been focused on for some time, so there's some comfort in the consistency between former CEO Klappa and Leverett.

Looking forward

The one thing that was not addressed in the company's recent earnings reports and investor presentations is how the company intends to meet emissions targets for the Clean Power Act. With total CO2 emissions from the company down 23% since 2000, the company isn't too far off track from meeting the goals that would require a 27% reduction by 2022.

The one concern, though, is that more than 50% of the company's power generation comes from coal. Some of the gains it has made so far have been from the retirement of older coal plants, but it will have to up its game if it wants to meet those targets in the next six years. 

Then again, the enforcement of the Clean Power Act is being held up in the Supreme Court, so maybe this isn't as much of a threat to the company's future results as one might think.