Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported August 4, 2026 · Beat 4 of last 6 quarters
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Pinnacle West's results underscore the accelerating power demand from the AI-driven semiconductor and data center buildout in Arizona. The TSMC expansion and record peak demand signal sustained load growth that will require significant generation, transmission, and gas infrastructure investment, reinforcing the broader AI infrastructure buildout thesis.
Pinnacle West reported Q2 EPS of $1.43, down $0.15 year-over-year, with higher interest, depreciation, and lower transmission revenue offset by weather and strong sales growth. Customer growth was 2.1% and weather-normalized sales grew 9.6%, with C&I up 12.7% on data center and semiconductor expansion. The company completed 31 days of rate case hearings and filed a new $500M ATM program after using all remaining capacity from the prior $900M program. TSMC announced an additional $100B investment in Arizona, and the company announced plans to convert two retired coal units at Cholla to natural gas.
Management reiterated full-year EPS guidance of $4.55–$4.75, now expecting to finish at the top end. They did not update 2026 sales growth guidance (4–6%) but noted year-to-date weather-normalized sales growth is tracking closer to the long-term 5–7% range. The Cholla conversion project, expected to add ~380 MW by 2029 and up to ~$440M of incremental capital (mostly 2027–2028), is not yet in the capex guidance. The IRP filing was moved to end of October to incorporate the latest TSMC expansion plans and other growth data. The rate case is in briefing phase with a final commission decision expected before year-end.
“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.”
on TSMC expansion
“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.”
on Guidance
“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.”
on Growth outlook
With retail sales growth exceeding expectations again, do you see this pace continuing for the rest of the year? Could you revisit sales guidance given the magnitude of growth?
Andrew Cooper noted the quarter's growth was robust and diverse across residential and C&I, tracking closer to the long-term 5–7% range. He highlighted sustained runway from residential usage trends and C&I growth, with C&I at 12.7% implying above the top end of the long-term range. They will continue to monitor and potentially revisit guidance.
What drove the IRP move from August to end of October? Did the scope change? What should we expect in the filing?
Ted Geisler explained the delay was to incorporate the latest TSMC expansion plans, the Cholla conversion, and updated load forecasts. The IRP will provide first line of sight into the timing of the 4.5+ GW committed load ramp and the resources needed. He noted TSMC's fab contribution has been flat year-over-year, with the majority of ramp expected soon.
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