Hawaiian Electric Industries (HE) shares fell 0.72% to $12.40 amid volatile trading following the release of second-quarter earnings, which showed a sharp headline profit increase. The company reported $123 million in net income, compared with $26 million in Q2 of the prior year. However, a wildfire settlement accounting adjustment accounted for the majority of the increase, masking weaker core earnings and persistent utility cost pressures.

The results come as Hawaiian Electric continues navigating the financial fallout from the August 2023 Maui wildfires, among the deadliest in U.S. history, which destroyed much of Lahaina and killed at least 102 people. The disaster placed HEI among a growing set of U.S. utilities confronting wildfire-related liability, echoing challenges that pushed California's PG&E into bankruptcy in 2019.

Wildfire Settlement Remeasurement Lifts Reported Profit

HEI recorded $0.71 per diluted share for the quarter, up from $0.15 per share one year earlier. The remeasurement followed the finalization of the Maui wildfire settlement agreement in April 2026, which reduced the remaining liability from $1.44 billion to $1.30 billion and generated a significant non-cash benefit for reported earnings.

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

Core results painted a weaker operating picture once HEI excluded wildfire-related items and Pacific Current strategic review expenses. Core net income declined to $22 million, or $0.13 per share, from $35 million in the year-ago quarter. Hawaiian Electric's core net income also fell to $33 million from $42 million, weighed down by higher interest and operating expenses.

Utility Spending Pressures Persist

Hawaiian Electric reported $138 million in second-quarter net income, compared with $39 million in the prior-year quarter. Interest expense rose by $23 million during the period, including $18 million tied to settlement liability accretion. Operating and maintenance costs increased by $9 million due to 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. Higher insurance premiums, storm response costs, vegetation management, maintenance, cybersecurity spending, and employee expenses are driving that outlook throughout the year. Hawaiian Electric also anticipates a maximum $3.7 million pre-tax penalty under its Fuel Cost Risk Sharing mechanism in 2026.

The company continues to invest in reliability, wildfire protection, renewable energy, and financial stability across its service territories. Hawaiian Electric plans to procure 1,650 gigawatt-hours of renewable energy, 465 megawatts of grid-forming resources, and 111 megawatts of planned firm capacity. The utility also intends to securitize approved wildfire mitigation costs while pursuing rate changes ahead of its 2027 rate rebasing framework. These procurement targets align with Hawaii's mandate requiring 100% of electricity sales to come from renewable sources by 2045, one of the most aggressive clean-energy standards among U.S. states.