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By Pooja Menon
(Reuters) -U.S. electric and gas utility CMS Energy on Thursday reported a rise in first-quarter profit, helped by higher power demand.
The U.S. Energy Information Administration in February forecast power demand to hit record highs in 2025 and 2026, as utilities are seeing a surge in demand from AI data centers and increased domestic manufacturing.
"We're also seeing expansion in other industries, including defense, aerospace, polysilicon, semiconductors and agriculture," CEO Garrick Rochow said in a conference call.
The Jackson, Michigan-based company noted that nearly 90% of its supply chain is domestically sourced and it will continue its efforts to shift to U.S.-based vendors to lower its exposure to tariffs.
CMS Energy had warned about tariff-led supply chain issues in the previous quarter.
Rochow said much of the tariff exposure is related to capital equipment, meaning any impact of higher equipment costs on customers would be spread out over the lifespan of the assets.
The company's revenue rose 12.4% to $2.45 billion for the first quarter, beating analysts' average estimate of $2.24 billion, according to data compiled by LSEG.
Total quarterly operating expenses grew to $1.95 billion from $1.76 billion a year ago.
The utility anticipates higher overall operating and maintenance expenses for the remainder of the year, driven by the expectation of increased service restoration cost related to the storms that impacted Michigan in late March and early April.
CMS Energy's first-quarter net income attributable to shareholders rose to $302 million, or $1.01 per share, from $285 million, or 96 cents per share, a year ago.
The company earned $1.02 per share on an adjusted basis in the first quarter, in line with analysts' expectations.
(Reporting by Pooja Menon in Bengaluru; Editing by Shreya Biswas)