Northwestern Corporation (NYSE:NWE) Q2 2020 Earnings Conference Call - Final Transcript

Jul 29, 2020 • 03:00 pm ET

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Northwestern Corporation (NYSE:NWE) Q2 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

[Operator Instructions] We'll go ahead and take our first question from Shar Pourreza with Guggenheim partners.

Analyst
Kody Clark

Hey, good afternoon. This is actually Kody Clark on for Shar. So you guys guided down at Q1 given weather and the expected impact of COVID-19. And you've had another somewhat challenging quarter with the virus. Obviously, we're still awaiting the approval to defer uncollectible account costs from your commissions. But wondering that you're still confident in the midpoint of guidance, are you tracking more towards the lower end of the range?

Executive
Brian Bird

Yes. I'd like to we don't ever try to give anybody where we are in the range. I would just say this, we feel good about where we sit today. Obviously, we need to get recovery from the Commission. That's an important part of our range, if you will, as a whole. But actually, Q2 came right in line with our expectations. We do expect that things are going to improve over time in Q3 and Q4 from a COVID-related perspective, that was in our guidance range initially, but we also expected to kind of pull off the gas a little bit on OG&A savings in the second half of the year either.

And if, in fact, things continue to stay difficult because of COVID on the margin side, we'll be that much more attuned to it on the OG&A expense. And so we feel very confident in our earnings guidance as we sit here today.

Analyst
Kody Clark

Got it. And second, have you given any more thought on upsizing the current Montana RFP given power on that side of this whole front? I know it's somewhat relies on the intendant valuation, but just wondering your updated thoughts there.

Executive
Robert Rowe

That certainly is something that we will take a look at for exactly the reason that you said. It depends on seeing what comes in. But as I mentioned, we have a pretty big hole to fill on behalf of our customers, and shame on us if we don't do that. So that's certainly a possibility.

Analyst
Kody Clark

All right, thanks, that's all I have.

Executive
Robert Rowe

Thanks, Kody.

Operator
Operator

We'll take our next question from Michael Weinstein with Credit Suisse.

Analyst
Michael Weinstein

Hi, good afternoon guys. You said the OG&A expense cuts of $0.08 to $0.11, you're expecting in the second half of the year. That depends on what does that depend on exactly? I think you mentioned COVID continuing, I mean COVID expense cuts continuing? Or things like travel.

Executive
Brian Bird

What we did is I'm sorry. Mike, as we thought about Q3 and Q4, we expected thanks to, over time, slow reversion to near normal by the end of the year, right? And so if we had an expectation on OG&A cuts for the full year, we would be backing off that a little bit as well. So you noticed, I pointed out earlier, we had $0.14 of improvement on a year-over-year basis on the OG&A line, just in the second quarter alone. And obviously, the range for Q3 and Q4 is