Hawaiian Electric (HE) Stock Profit Surge Hides Thin Core Earnings

Hawaiian Electric Industries came into this report with a stock that has been grinding lower for months, down about 11% over the past quarter, and the immediate reaction is muted. The share price slipped less than 1% to around US$12.40, which indicates that the market is still cautious even after a headline quarter that showed US$123.2 million of net income and US$0.71 in earnings per share.

The catch is that much of that profit came from a large non cash accounting benefit tied to Maui wildfire liabilities. Under the surface, core earnings were far thinner, and that is where the real story for Hawaiian Electric investors starts.

Is Hawaiian Electric Industries now a genuine bargain at a 9.6x P/E, or just a low priced stock with fragile cash flow and heavy non cash earnings that distort the picture? Compare the current share price to a full intrinsic value view in the valuation analysis for Hawaiian Electric Industries

Q2 2026 Earnings Summary

• Revenue (Q2 2026 vs. Q2 2025): US$939.7 million vs. US$746.4 million (up about 26%)
• Net Income (Q2 2026 vs. Q2 2025): US$123.2 million vs. US$26.1 million (up very sharply, heavily affected by non cash wildfire liability accounting)
• Basic EPS (Q2 2026 vs. Q2 2025): US$0.71 per share vs. US$0.15 per share (up very sharply, also driven by non cash items)
• Core Net Income (Non GAAP, Q2 2026 vs. Q2 2025): US$22.5 million vs. US$35.4 million (core earnings declined, reflecting weaker underlying performance at Hawaiian Electric)

Prefer clean charts instead of another wall of earnings commentary and complex accounting details? See Hawaiian Electric Industries' full earnings and valuation picture in one visual view through the company report for Hawaiian Electric Industries.

Evaluating Whether Hawaiian Electric’s Growth Story Is Taking Hold

Bulls argue Hawaiian Electric Industries is turning into a cleaner, grid focused regulated utility with steadier earnings and a bigger rate base. The latest quarter shows partial progress but also clear gaps. On the positive side, the Integrated Grid Plan RFP for about 1,650 GWh of renewables and hundreds of megawatts of grid forming and firm capacity is a concrete milestone toward the long term capital spending and decarbonization story. Regulatory approvals for wildfire mitigation recovery and the plan to use securitization for roughly US$350 million of costs also fit the narrative of reducing future earnings swings.

However, core utility income declined to US$32.6 million and higher interest and O&M are still pressuring margins. That means the refocus on regulated operations is not yet translating into stronger underlying profitability, even as the project and regulatory pipeline lines up with the bullish playbook.

Access the analyst estimates for Hawaiian Electric Industries.

Bear Concerns On Earnings Quality Largely Intact For Hawaiian Electric

The bearish view is that Hawaiian Electric Industries faces structurally higher wildfire and climate costs, rising interest expense, and limited growth that squeeze true earnings power even when headline profit looks strong. The latest quarter leans toward that caution. Core net income fell from US$35.4 million to US$22.5 million and utility core income slipped to US$32.6 million despite the reported US$123.2 million GAAP profit. That gap directly supports fears about low quality earnings and heavy reliance on non cash wildfire accounting.

Bears also worry that wildfire mitigation, grid hardening and financing costs will strain cash flow before regulators fully approve recovery. Management secured approvals for about US$350 million of wildfire mitigation cost recovery and plans securitization, and credit ratings improved to BB minus, which are partial positives. However, higher O&M and interest costs, plus still pending rate rebasing and securitization orders, mean key milestones on stable, self funding earnings are not yet achieved.

After thin core earnings and rising interest and wildfire costs, are these issues isolated or structural? Review our risk analysis for Hawaiian Electric Industries which shows 2 important warning signs

Take Control Of Your Next Move

If the mix of headline profit and thin core earnings at Hawaiian Electric Industries has your attention, register for free with Simply Wall St and add it to a Watchlist to track price against fair value and watch how the story develops. Once you decide to take a position, use the Portfolio Command Center to cut through market noise and focus on the most important changes to your holdings. For a broader view on Hawaiian Electric Industries and other stocks, tap into the crowd insights inside the Community and see how different investors are interpreting the same data. By spotting hidden catalysts and risks early, you may be able to stay ahead of the market and act with confidence.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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