NorthWestern (NWE) Financials

NorthWestern Energy Group, Inc. (NASDAQ: NWE) has demonstrated a generally stable financial performance over the past several quarters, with some noticeable trends in profitability, cash flow, and balance sheet strength.

Positive Factors:

• Consistent net income: NorthWestern posted positive consolidated net income in each of the last eight quarters analyzed, with quarterly net incomes ranging from approximately $19 million to $77 million.
• Operating revenue has shown a generally upward trend from about $290 million in Q2 2023 to over $342 million in Q2 2025, indicating potential growth in core operations.
• Strong cash from operating activities: The company generated significant cash flow from operations every quarter, consistently exceeding $58 million and reaching over $153 million in some quarters, supporting liquidity and reinvestment.
• Substantial capital investments: Purchases of property, plant, and equipment have been significant (ranging from approximately $92 million to $159 million quarterly), indicating ongoing investment in infrastructure which may support future growth.
• Stable dividends: The company has consistently paid quarterly cash dividends around $0.64-$0.66 per share, reflecting a commitment to returning value to shareholders.
• Total common equity has been growing modestly over time, contributing to a solid equity base above $2.8 billion as of mid-2025.

Neutral Factors:

• Depreciation and amortization expenses have been stable but substantial (~$56 million to $62 million), typical for capital-intensive utilities.
• Accounts receivable and inventories have fluctuated but remain large components of current assets, suggesting consistent operational scale but potentially extended collection or inventory holding periods.
• Weighted average shares outstanding have changed only slightly, implying minimal dilution over the period.

Negative Factors:

• Volatile net income quarter-to-quarter: While overall positive, net income has declined significantly from a peak of around $77 million in Q1 2025 to about $21 million in Q2 2025, signaling potential near-term earnings pressure.
• Net cash from investing activities is consistently negative and large in magnitude, driven primarily by heavy ongoing capital expenditures which may pressure free cash flow if not matched by earnings growth.
• The company carries substantial debt, with long-term debt near $3.0 billion and total liabilities over $5.2 billion, which may pose financial risk especially if interest rates rise or earnings decline significantly.
• Interest expense remains a heavy burden, around $30-$36 million quarterly, reducing net profitability.
• Significant negative adjustments in non-cash charges and changes in operating assets and liabilities in some periods create cash flow volatility (e.g., large negative change in operating assets and liabilities in Q2 2025).
• Cash & equivalents decreased sharply in Q2 2025 to approximately $2.9 million from over $56 million in Q1 2025, indicating potential short-term liquidity tightening.

In summary, NorthWestern Energy appears to maintain a solid operational base with steady revenues and cash flow from operations, backed by ongoing capital investment and shareholder dividends. However, earnings volatility, high debt levels, and sizeable capital spending continue to present challenges that investors should monitor closely.