CenterPoint Energy, Inc. (NYSE: CNP) announced on May 27, 2025, the execution of significant forward sale agreements involving an aggregate of over 21.6 million shares of its common stock. This strategic initiative with prominent financial institutions including Bank of America, Mizuho Markets, and JPMorgan Chase, aims to support and enhance CenterPoint’s capital deployment strategy amidst ongoing growth and investment plans. The agreements are structured with a forward sale price initially set at $36.26 per share, subject to adjustment based on daily floating interest rate factors, reflecting sophisticated financial structuring to optimize equity issuance timing and pricing.
The forward sale settlement dates extend up to February 25, 2027, granting CenterPoint flexibility in capital raising and share delivery methods. Settlement can be physical, net share, or cash, each with distinct financial considerations impacting earnings per share (EPS) dilution. Notably, any physical or net share settlements will cause EPS dilution, a vital consideration for shareholders evaluating future earnings impacts.
This maneuver is part of CenterPoint Energy’s broader, well-articulated long-term capital strategy aimed at sustaining an 8% non-GAAP EPS growth rate for 2024 and the mid- to high-end of 6% to 8% annually through 2030, as confirmed in recent earnings calls. For context, CenterPoint reported a robust \(8.64 billion total revenue and \)1.019 billion net income in FY 2024, with approximately 644.1 million common shares outstanding.
Recent earnings disclosures also highlight CenterPoint’s focused efforts on operational efficiency and growth, including capital expenditures that exceeded \(2 billion year-to-date in 2023 and an increased 10-year capital plan target of \)43.4 billion through 2030. The company has emphasized its ongoing resilience and strategic financial management amidst inflationary and economic uncertainties, maintaining customer charges aligned with inflation while targeting O&M reductions of 1-2% annually.
Moreover, the forward sale agreements come with provisions for potential acceleration of settlement under specific conditions, such as changes in share lending environments or significant corporate events, underscoring the complex risk management embedded in these transactions.
CenterPoint’s management continues to reinforce confidence in its industry-leading growth plan and commitment to delivering sustainable shareholder value, leveraging financial instruments like forward sale agreements to optimize capital structure and support long-term investment.
This announcement reflects CenterPoint’s proactive approach to capital markets as it navigates evolving economic challenges, regulatory landscapes, and its ambition to advance infrastructure resilience, especially in key territories like Houston. It also aligns with the company’s history of steady earnings growth and disciplined capital deployment presented in previous quarterly earnings calls dated from 2022 to early 2024.
For further details, the full 8-K report can be accessed here: CenterPoint Energy 8-K Filing May 27, 2025.
Summary of Key Financials for FY 2024: - Total Revenue: \(8.64 billion - Net Income: \)1.019 billion - Common Shares Outstanding: 644.1 million - Forward Sale Shares: 21.6 million (equivalent to approximately 3.36% of shares outstanding)
Management continues to project non-GAAP EPS growth of 8% in 2024 and 6-8% annually through 2030, signaling strong earnings momentum despite capital market activities.
Tags: CNP, CenterPoint Energy, FY2024, forward sale agreements, capital strategy, earnings growth