Key Highlights

● Third-quarter adjusted Earnings of $1.52 a share beat the $1.37 consensus.

● Revenue of $4.17 billion came in slightly short of the $4.26 billion expected.

● The company narrowed 2026 guidance and issued initial 2027 earnings guidance of $4.48 to $4.62.

● Utilities rallied as investors rotated into defensive sectors and Treasury yields eased.

Xcel Energy (NASDAQ:XEL) rose on Thursday after third-quarter adjusted earnings comfortably beat forecasts, joining a broad rally in utilities as investors moved into defensive sectors and Treasury yields eased.

Earnings beat, Revenue slip

Xcel Energy, the Minneapolis-based Utility serving customers across the upper Midwest and Mountain West, climbed on October 29, according to market data.

The company reported third-quarter adjusted Earnings Per Share of $1.52, well above the $1.37 consensus. Revenue came in at $4.17 billion, slightly short of the $4.26 billion analysts had expected, and one report described the results as mixed.

For utilities, revenue can swing with fuel costs and weather, so investors often focus more on earnings, which reflect the regulated returns that drive long-term value. On Thursday, the bottom-line beat was the headline.

Guidance for 2026 and a first look at 2027

Xcel narrowed its 2026 earnings-per-share guidance to a range of $4.10 to $4.16. It also issued initial 2027 guidance of $4.48 to $4.62, a step up from the current year's range.

That early look at 2027 is significant for a utility, as investors in the sector place a premium on predictable earnings growth. The new range pointed to continued growth into next year.

Utilities lead the defensive charge

Xcel's gain was part of a powerful rally in utilities. The sector rose sharply on Thursday, according to market commentary, and was among the best-performing groups in the S&P 500, alongside health care, real estate and consumer staples.

Two forces drove the move. First, investors rotated away from mega-cap technology after Alphabet (NASDAQ:GOOGL) suffered its worst day since its 2004 IPO, erasing about $500 billion of market value. Second, Treasury yields eased: the 10-year yield slipped back from the multi-decade highs it reached earlier in October. Because utilities pay steady dividends, they often compete with bonds for income-seeking investors, so lower yields tend to make them more attractive.

The S&P 500 fell 23.59 points to 7,720.39 and the Nasdaq Composite dropped 365.13 points to 26,184.72, while more than 400 S&P 500 members rose. "Money is rotating within the market rather than leaving it," one market strategist said.

The power Demand story

Utilities have also benefited from a surge in electricity demand, driven in part by data centres built to support artificial intelligence. That theme was visible elsewhere on Thursday: Quanta Services (NYSE:PWR), which builds transmission lines and substations, rallied after raising its 2026 outlook and reporting a record backlog, and GE Vernova (NYSE:GEV), which makes power equipment, also rose.

Rates remain the wildcard

The Federal Reserve held rates steady on Wednesday in a 10–2 vote, with Governor Lisa Cook and Cleveland Fed President Beth Hammack dissenting in favour of a hike. Futures markets lean toward another increase in December, although media reports said expectations leaned toward a pause, illustrating the uncertainty.

Thursday's economic data did little to settle the debate. Third-quarter GDP grew faster than expected, while September PCE Inflation ran hotter than in August. One bank economist said, "Today's data strengthens the case for another rate increase in December."

What to watch

Investors will look for details on Xcel's Capital spending plans and how they support the 2027 earnings outlook. Regulatory decisions on rate cases in its service territories will be key, as will any updates on new electricity demand from large customers such as data centres.

Rates will remain crucial for the sector. Friday's Employment Cost index and the Fed's December 8–9 meeting could move Treasury yields, which in turn influence the appeal of utilities relative to bonds. Dominion Energy (NYSE:D)'s results on Friday will offer another read on the sector.