Hawaiian Electric Industries (HE) Stock: Profit Jumps on Wildfire Settlement Adjustment

TLDR

• HEI Q2 profit jumps sharply after Maui wildfire settlement liability remeasurement
• Core earnings weaken despite Hawaiian Electric’s much higher reported Q2 profit
• Wildfire settlement adjustment delivers a major non-cash boost to HEI earnings
• Higher interest and operating costs weigh on Hawaiian Electric core results
• HEI plans major renewable energy procurement as utility spending stays high

Hawaiian Electric Industries (HE) shares fell 0.72% to $12.40 amid volatile trading, as second-quarter earnings showed a sharp headline profit increase. The company reported $123 million in net income, compared with $26 million in Q2 last year. However, a wildfire settlement accounting adjustment drove most of the increase and masked weaker core earnings and utility cost pressures.

Hawaiian Electric Industries, Inc., HE

Wildfire Settlement Remeasurement Lifts Reported Profit

HEI recorded $0.71 per diluted share for the reported quarter, up from $0.15 per share one year earlier. The company remeasured its remaining Maui wildfire settlement liability after the settlement agreement became final during April 2026. That adjustment reduced the liability from $1.44 billion to $1.30 billion and produced a significant non-cash benefit for reported earnings.

Hawaiian Electric recorded a $154 million pre-tax benefit from the remeasurement within utility expenses during the reported quarter. The utility also recognized $9 million in insurance recoveries tied to tort-related legal claims from the Maui wildfire. Higher revenue and interest income added further support, while increased financing and operating costs offset part of those quarterly gains.

Core results showed a weaker operating picture after HEI removed wildfire items and Pacific Current strategic review expenses. Core net income fell to $22 million, or $0.13 per share, from $35 million during the quarter last year. Hawaiian Electric’s core net income also declined to $33 million from $42 million as higher interest and operating expenses weighed.

Utility Spending Pressures Remain Despite Higher Earnings

Hawaiian Electric reported $138 million in second-quarter net income this year, compared with $39 million in the prior-year quarter. Still, interest expense increased by $23 million during the quarter, including $18 million linked to settlement liability accretion. Operating and maintenance costs also rose by $9 million because of generation, grid, labor, employee benefits, and administrative expenses.

The utility expects adjusted 2026 operating and maintenance costs excluding pension expenses to rise well above inflation during the year. Higher insurance premiums, storm response costs, vegetation management, maintenance, cybersecurity spending, and employee expenses continue driving that outlook throughout 2026. Hawaiian Electric also expects a maximum $3.7 million pre-tax penalty under its Fuel Cost Risk Sharing mechanism this year.

The company continues investing in reliability, wildfire protection, renewable energy, and stronger financial stability across its service territories. Hawaiian Electric plans 1,650 gigawatt-hours of renewable energy, 465 megawatts of grid-forming resources, and 111 megawatts of planned firm capacity. The company also plans to securitize approved wildfire mitigation costs while pursuing rate changes before its 2027 rate rebasing framework.

The post Hawaiian Electric Industries (HE) Stock: Profit Jumps on Wildfire Settlement Adjustment appeared first on Blockonomi.