FirstEnergy Q1 Earnings Beat Estimates, Revenues Lag

FirstEnergy FE reported first-quarter 2024 operating earnings of 55 cents per share, which surpassed the Zacks Consensus Estimate of 53 cents by 3.8%. However, the bottom line decreased 8.3% from the year-ago quarter's figure of 60 cents.

Total Revenues

Operating revenues of $3.29 billion missed the Zacks Consensus Estimate of $3.36 billion by 2.04%. The top line, however, increased 1.8% from $3.23 billion recorded in the year-ago quarter.

Segmental Performance

Distribution: Earnings from this segment totaled $1.77 billion, down 2.8% from the prior-year quarter's level. The decline can be attributed to higher planned operating expenses during 2024.
Integrated: Earnings from this segment amounted to $1.09 billion, up 6.5% from the prior-year quarter's reported actuals. The improvement was primarily due to the approval of recent base rate cases in Maryland, New Jersey and West Virginia, investments in formula rate capital programs, and higher weather-related demand.
Stand-Alone Transmission: Earnings from this segment totaled $438 million, up 9.5% from the prior-year quarter's figure. The first-quarter results were driven by the rate base growth in formula rates from its capital investment program.
Corporate/Other: The loss from this segment amounted to $13 million compared with a loss of $14 million in the year-ago quarter.

Highlights of the Release

Total operating expenses were $2.65 billion, up 1.1% from the year-ago quarter's level of $2.62 billion.
The company reported an interest expense of $305 million, up 16% from the prior-year quarter's level of $263 million.
Total distribution deliveries for the first quarter increased 1.5% from that recorded in the year-ago period. Usage increased 1% among residential customers. While industrial sales increased 3% year over year, sales were essentially flat in the commercial sector.

Financial Highlights

As of Apr 22, 2024, FE reported available liquidity of $4.73 billion, including cash and cash equivalents of $110 million.
Long-term debt and other long-term obligations as of Mar 31, 2024, totaled $21.65 billion compared with $22.89 billion as of Dec 31, 2023.
Net cash used for operating activities for the first three months of 2024 totaled $40 million compared with $112 million in the year-ago period.

Guidance

FirstEnergy expects 2024 earnings per share in the range of $2.61-$2.81, which indicates a 7% increase over the 2023 guidance midpoint, driven by robust regulated growth. The Zacks Consensus Estimate for the same is pegged at $2.67, lower than $2.71, the midpoint of the company's guided range.
FirstEnergy reaffirmed its long-term annual operating EPS growth rate of 6-8%. FE continues with its capital investment plan of $26 billion for the 2024-2028 period.

Zacks Rank

FirstEnergy currently has a Zacks Rank #3 (Hold).

Upcoming Releases

WEC Energy Group WEC is scheduled to report first-quarter results on May 1, before market open. The Zacks Consensus Estimate for first-quarter earnings is pegged at $1.92 per share.
WEC's long-term (three to five years) earnings growth rate is 5.9%. It delivered an average earnings surprise of 4.9% in the last four quarters.
Pinnacle West Capital PNW is scheduled to report first-quarter results on May 2, before market open. The Zacks Consensus Estimate for first-quarter earnings is pegged at 3 cents per share.
PNW's long-term earnings growth rate is 7.6%. The Zacks Consensus Estimate for 2024 earnings is pegged at $4.76 per share.
NRG Energy NRG is scheduled to report first-quarter results on May 7, before market open. The Zacks Consensus Estimate for first-quarter earnings is pegged at 51 cents per share.
The Zacks Consensus Estimate for 2024 earnings is pinned at $5.36 per share. NRG delivered an average earnings surprise of 6.4% in the last four quarters.

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