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FirstEnergy Misses on Q3 Earnings and Sales, Lowers '24 EPS View

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FirstEnergy (FE - Free Report) reported third-quarter 2024 operating earnings of 85 cents per share, which lagged the Zacks Consensus Estimate of 95 cents by 6.6%.

The bottom line decreased 3.4% from the year-ago figure of 88 cents. The year-over-year decline in earnings was due to significantly higher storm restoration costs in the third quarter and lower distribution revenues in Ohio as a result of the Electric Security Plan V order, partially offset by lower operating expenses.

On a GAAP basis, the third-quarter earnings were 73 cents, flat year over year.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Total Revenues of FirstEnergy

Operating revenues of $3.73 billion missed the Zacks Consensus Estimate of $3.98 billion by 6.4%. The top line, however, increased 6.9% from $3.48 billion reported in the year-ago quarter.

FirstEnergy Corporation Price, Consensus and EPS Surprise

FirstEnergy Corporation Price, Consensus and EPS Surprise

FirstEnergy Corporation price-consensus-eps-surprise-chart | FirstEnergy Corporation Quote

FE’s Segmental Performance

Distribution Services and Retail Generation: Revenues from this segment totaled $3.07 billion, up 6.9% from the prior-year quarter’s level.

Transmission:  Revenues from this segment amounted to $0.56 billion, up 9.4% from $0.51 billion reported in the prior-year quarter.

Other:  Revenues from this segment amounted to $104 million compared with $110 million in the year-ago quarter.

Highlights of FE’s Q3 Earnings

Total operating expenses were $3 billion, up 6.4% from the year-ago quarter’s level of $2.82 billion. The year-over-year increase in other operating expenses resulted in an overall increase in expenses, while the cost of fuel and purchased power was lower than the year-ago quarter.
 
The company reported an interest expense of $276 million, down 4.5% from the prior-year level of $289 million.

Total distribution deliveries increased 2.5% compared with the third quarter of 2023, reflecting cooling degree days that were 15% above last year.

Ongoing improvement in the economic conditions in the five states FirstEnergy serves continues to create demand and boost the performance of the company.

Financial Highlights of FE

As of Oct. 28, 2024, FE reported available liquidity of $6.03 billion, including cash and cash equivalents of $290 million.

Long-term debt and other long-term obligations as of Sept. 30, 2024, totaled $21.6 billion compared with $22.89 billion as of Dec. 31, 2023.

Net cash provided from operating activities for the first nine months of 2024 totaled $1.84 billion compared with $429 million in the year-ago period.

FirstEnergy’s Guidance

FirstEnergy trimmed its 2024 earnings per share to the range of $2.61-$2.71 from the earlier band of $2.61-$2.81. The Zacks Consensus Estimate for the same is pegged at $2.70 per share, a tad higher than $2.66, the midpoint of the company’s guided range.

FirstEnergy reaffirmed its long-term annual operating EPS growth rate of 6-8%. FE will continue with its capital investment plan of $26 billion for the 2024-2028 period.

The company raised its 2024 capital investment to $4.6 billion from $4.3 billion, which reflects a 24% year-over-year increase in investments.

Zacks Rank of FE

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

The AES Corporation (AES - Free Report) is going to report its third-quarter results on Oct. 31. The Zacks Consensus Estimate for third-quarter sales is pegged at $3.63 billion, which implies a year-over-year increase of 5.6%.  AES reported an average earnings surprise of 19.2% in the last four quarters.

The Southern Company (SO - Free Report) is going to report its third-quarter results on Oct. 31. The Zacks Consensus Estimate for third-quarter earnings of $1.33 per share reflects a year-over-year decline of 6.34%. SO reported an average earnings surprise of 12.6% in the last four quarters.

Public Service Enterprise Group Incorporated (PEG - Free Report) is going to report its third-quarter results on Nov. 4. The Zacks Consensus Estimate for third-quarter earnings of 91 cents per share reflects a year-over-year decline of 7.06%. PEG reported an average earnings surprise of 3.23% in the last four quarters.

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