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FirstEnergy (FE) Q2 Earnings Match Estimates, Sales Rise Y/Y
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FirstEnergy Corporation (FE - Free Report) delivered second-quarter 2022 operating earnings per share (EPS) of 53 cents, on par with the Zacks Consensus Estimate. However, the bottom line declined by 10.2% from the year-ago earnings of 59 cents per share.
On a GAAP basis, FirstEnergy reported second-quarter 2022 earnings of 33 cents per share, up 200% from the prior-year quarter’s 11 cents.
Total Revenues
FirstEnergy generated operating revenues of $2,819 million in the second quarter, which surpassed the Zacks Consensus Estimate of $2,763 million by 2%. The top line improved by 7.5% from $2,623 million in the year-ago quarter.
FirstEnergy Corporation Price, Consensus and EPS Surprise
In the second quarter of 2022, residential sales decreased by 1.6% due to milder weather. Commercial deliveries increased by 1.5%, while industrial sales improved by 2.4% year over year, reflecting the recovery from pandemic conditions. Total distribution deliveries moved up 1.3% from the prior-year quarter’s level.
Total operating expenses for the second quarter amounted to $2,348 million, up 14% from the year-ago quarter’s $2,059 million, due to the higher fuel cost and the purchased power cost.
In the second quarter, the operating income was $471 million, down 16.5% from $564 million in the year-ago quarter.
In May 2022, FE closed the minority interest sale of FirstEnergy Transmission, LLC for the purchase price of $2.4 billion, and the proceeds have been deployed to strengthen the balance sheet and fund regulated capital investments.
Financial Update
As of Jun 30, 2022, FE had cash and cash equivalents of $478 million compared with $1,462 million as of Dec 31, 2021.
Long-term debt and other long-term obligations as of Jun 30, 2022 were $20,763 million, down 6.7% from $22,248 million on Dec 31, 2021.
Net cash provided by operating activities for the first six months of 2022 was $1,283 million compared with $1,347 million in the year-ago period.
Guidance
FirstEnergy provided the third-quarter 2022 earnings guidance in the range of 70-80 cents per share. FE reiterated the 2022 earnings guidance in the range of $2.30-$2.50 per share. The Zacks Consensus Estimate for 2022 earnings of $2.40 per share is on par with the midpoint of the guided range. FirstEnergy also anticipates achieving targeted FFO/Debt of nearly 13% in 2023, a year ahead of the initial target in 2024.
FirstEnergy reiterated its plan to invest $3.3 billion in 2022, up 15% compared with 2021, to strengthen the grid and lead a clean energy transition. FE expects to invest $17 billion in the 2021-2025 period, of which $8.6 billion will be directed toward grid modernization and increasing resiliency, $1.7 billion for conservation and $6.5 billion for clean energy transition and customer-centric growth projects.
XEL Energy (XEL - Free Report) is slated to report second-quarter 2022 earnings on Jul 28 before market open. The Zacks Consensus Estimate for the second-quarter EPS is pegged at 60 cents.
XEL Energy’s long-term (three to five years) earnings growth is currently pegged at 6.4%. The Zacks Consensus Estimate for XEL’s 2022 earnings implies year-over-year growth of 6.8%.
PNM Resources (PNM - Free Report) is slated to report second-quarter 2022 earnings on Aug 4 before market open. The Zacks Consensus Estimate for the second-quarter EPS is pegged at 55 cents.
PNM Resources’ long-term earnings growth is currently pegged at 5%. The Zacks Consensus Estimate for PNM’s 2022 earnings implies year-over-year growth of 6.1%.
Alliant Energy Corp. (LNT - Free Report) is slated to report second-quarter 2022 earnings on Aug 4 after market close. The Zacks Consensus Estimate for the second-quarter EPS is pegged at 58 cents.
Alliant Energy’s long-term earnings growth is currently pegged at 5.7%. The Zacks Consensus Estimate for LNT’s 2022 earnings implies year-over-year growth of 4.6%.
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FirstEnergy (FE) Q2 Earnings Match Estimates, Sales Rise Y/Y
FirstEnergy Corporation (FE - Free Report) delivered second-quarter 2022 operating earnings per share (EPS) of 53 cents, on par with the Zacks Consensus Estimate. However, the bottom line declined by 10.2% from the year-ago earnings of 59 cents per share.
On a GAAP basis, FirstEnergy reported second-quarter 2022 earnings of 33 cents per share, up 200% from the prior-year quarter’s 11 cents.
Total Revenues
FirstEnergy generated operating revenues of $2,819 million in the second quarter, which surpassed the Zacks Consensus Estimate of $2,763 million by 2%. The top line improved by 7.5% from $2,623 million in the year-ago quarter.
FirstEnergy Corporation Price, Consensus and EPS Surprise
FirstEnergy Corporation price-consensus-eps-surprise-chart | FirstEnergy Corporation Quote
Highlights of the Release
In the second quarter of 2022, residential sales decreased by 1.6% due to milder weather. Commercial deliveries increased by 1.5%, while industrial sales improved by 2.4% year over year, reflecting the recovery from pandemic conditions. Total distribution deliveries moved up 1.3% from the prior-year quarter’s level.
Total operating expenses for the second quarter amounted to $2,348 million, up 14% from the year-ago quarter’s $2,059 million, due to the higher fuel cost and the purchased power cost.
In the second quarter, the operating income was $471 million, down 16.5% from $564 million in the year-ago quarter.
In May 2022, FE closed the minority interest sale of FirstEnergy Transmission, LLC for the purchase price of $2.4 billion, and the proceeds have been deployed to strengthen the balance sheet and fund regulated capital investments.
Financial Update
As of Jun 30, 2022, FE had cash and cash equivalents of $478 million compared with $1,462 million as of Dec 31, 2021.
Long-term debt and other long-term obligations as of Jun 30, 2022 were $20,763 million, down 6.7% from $22,248 million on Dec 31, 2021.
Net cash provided by operating activities for the first six months of 2022 was $1,283 million compared with $1,347 million in the year-ago period.
Guidance
FirstEnergy provided the third-quarter 2022 earnings guidance in the range of 70-80 cents per share. FE reiterated the 2022 earnings guidance in the range of $2.30-$2.50 per share. The Zacks Consensus Estimate for 2022 earnings of $2.40 per share is on par with the midpoint of the guided range. FirstEnergy also anticipates achieving targeted FFO/Debt of nearly 13% in 2023, a year ahead of the initial target in 2024.
FirstEnergy reiterated its plan to invest $3.3 billion in 2022, up 15% compared with 2021, to strengthen the grid and lead a clean energy transition. FE expects to invest $17 billion in the 2021-2025 period, of which $8.6 billion will be directed toward grid modernization and increasing resiliency, $1.7 billion for conservation and $6.5 billion for clean energy transition and customer-centric growth projects.
Zacks Rank
FirstEnergy currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
XEL Energy (XEL - Free Report) is slated to report second-quarter 2022 earnings on Jul 28 before market open. The Zacks Consensus Estimate for the second-quarter EPS is pegged at 60 cents.
XEL Energy’s long-term (three to five years) earnings growth is currently pegged at 6.4%. The Zacks Consensus Estimate for XEL’s 2022 earnings implies year-over-year growth of 6.8%.
PNM Resources (PNM - Free Report) is slated to report second-quarter 2022 earnings on Aug 4 before market open. The Zacks Consensus Estimate for the second-quarter EPS is pegged at 55 cents.
PNM Resources’ long-term earnings growth is currently pegged at 5%. The Zacks Consensus Estimate for PNM’s 2022 earnings implies year-over-year growth of 6.1%.
Alliant Energy Corp. (LNT - Free Report) is slated to report second-quarter 2022 earnings on Aug 4 after market close. The Zacks Consensus Estimate for the second-quarter EPS is pegged at 58 cents.
Alliant Energy’s long-term earnings growth is currently pegged at 5.7%. The Zacks Consensus Estimate for LNT’s 2022 earnings implies year-over-year growth of 4.6%.