FIRSTENERGY CORP (FE) Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 delivered strong execution: GAAP EPS $0.62 on $3.8B revenue and Core EPS $0.67, all materially higher year over year; management reaffirmed FY25 Core EPS guidance of $2.40–$2.60 and targeted 6–8% Core EPS CAGR through 2029 .
• EPS and revenue beat Street: Primary EPS $0.67 vs $0.592 consensus and revenue $3.77B vs $3.65B consensus; strength reflected base rate implementations (PA, WV, NJ), formula-rate growth, and normalization of winter weather. Bold beat on both EPS and revenue; estimates context below *.
• Capital plan tracking: >$1.0B deployed in Q1 toward 2025’s $5B customer-focused investment plan within Energize365’s $28B base plan (2025–2029). Increased dividend to $0.445/sh (payable Jun 1), consistent with payout targets .
• Catalysts: constructive Ohio base rate settlement dialogue; BPU approval of JCP&L’s EnergizeNJ IIP (~$202.5M formula-recovered portion) to expand smart grid; Valley Link JV and incremental PJM-approved projects position FE for additional transmission ROE-backed growth .

What Went Well and What Went Wrong

• What Went Well

  • Core EPS up meaningfully YoY to $0.67 (+$0.18 YoY), driven by new base rates (PA effective 1/1/25; WV/NJ effective late Q1’24), formula-rate growth (transmission rate base +19%), and normalized winter demand. “We’re off to a strong start in 2025… on track to meet the 2025 Core Earnings guidance.” — Brian Tierney .
  • Investment execution: >$1B invested in Q1, +15% YoY, majority in formula programs; Baseline O&M $340M in line with plan and below Q1’24, supporting the operating discipline theme .
  • Regulatory momentum: EnergizeNJ settlement approval in NJ, modest customer bill impact and potential federal offsets; constructive Ohio settlement dialogue described as “productive and constructive.” .

• What Went Wrong

  • Industrial demand softness: total distribution deliveries +4% YoY, but industrial down nearly 3% YoY given steel/auto weakness; FE flagged this on the call .
  • Stand-Alone Transmission earnings diluted: segment Core EPS down $0.04 YoY in Q1 due to dilution from the 30% FET sale despite >10% rate base growth .
  • Headwinds and affordability concerns: higher PJM capacity prices not bringing new dispatchable capacity; FE expects mitigation efforts and state leadership to address impacts (NJ/Pennsylvania actions highlighted) .

Financial Results

Multi-period summary

YoY comparison (Q1 2025 vs Q1 2024)

Consensus vs actual (Q1 2025)

Values retrieved from S&P Global.*

Segment breakdown

KPIs

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We’re off to a strong start this year… We are on track to meet our 2025 core earnings guidance.” — Brian Tierney .
• “Reaffirming our 2025 core EPS guidance range of $2.40 to $2.60 per share, and we continue to target the top half of that range.” — Brian Tierney .
• “Settlement discussions [in Ohio]… productive and constructive… focused on cap structure, ROE and the like.” — Brian Tierney .
• “We have not experienced any slowdown of data center interest… Meta announced… optimized for AI workloads.” — Brian Tierney .
• “O&M was in line with our plan and 3.5% lower than last year… leaders driving toward slightly lower number to give us flexibility.” — Jon Taylor .

Q&A Highlights

• Ohio regulatory path: Management emphasized multiple levers (reallocating CapEx intra-/inter-state, accelerating Grid Mod II, PA LTIP) to offset ESP cap constraints; confident in achieving guidance and 6–8% CAGR regardless of outcomes .
• Data center CapEx upside: Despite broader industry pullbacks, FE’s pipeline remains intact; long-term outlook unchanged, with recent Meta project confirmation .
• PJM capacity affordability: FE and NJ BPU seeking near-term mitigation; FE advocates state-led mechanisms that actually add dispatchable capacity (vs price-only signals) .
• Industrial demand: Softness concentrated in steel/autos; FE expects back-half improvement as data centers come online .
• WV IRP: Considering initial ~1,000MW CCGT with potential to add 1–4 units over time; plan balances environmental, rate and resource adequacy objectives .

Estimates Context

• Q1 2025 beat on both EPS and revenue: Primary EPS $0.67 vs $0.592 consensus; revenue $3.77B vs $3.65B consensus; estimate counts: EPS (11), revenue (4). FE’s reported Core EPS aligns with S&P’s Primary EPS framework. Potential estimate revisions likely modestly upward given reaffirmed FY25 guidance and top-half targeting *.

Values retrieved from S&P Global.*

Key Takeaways for Investors

• Rate-backed growth intact: New base rates in PA/WV/NJ and formula-rate programs (including PJM-approved projects) sustained Q1 momentum; FE reaffirmed FY25 Core EPS and targeted upper half of range .
• Capital deployment tracking ahead: >$1.0B invested in Q1 with strong cash generation ($637M CFO); O&M discipline supports earnings quality .
• Structural tailwinds from AI/data centers: No slowdown in FE’s footprint; Meta’s AI-focused facility and expanding large-load studies underpin industrial trajectory and incremental transmission investment visibility .
• Ohio framework transition manageable: Multiple levers to mitigate ESP cap headwinds; constructive settlement tone and legislative progress toward multi-year forward-test years .
• Affordability watch: Elevated PJM capacity prices remain a risk; near-term mitigation efforts (NJ/Pennsylvania) and advocacy for solutions that add dispatchable capacity should cushion impacts .
• Dividend growth on plan: Quarterly dividend increased to $0.445; payout policy (60–70% of Core EPS) supports a 10–12% total return proposition with potential P/E expansion .
• Near-term setup: Reaffirmation, top-half targeting and visible project pipeline create a supportive backdrop; monitoring industrial recovery pace and regulatory milestones (Ohio May hearings) for trading catalysts .

Appendix: Additional Relevant Press Releases

• EnergizeNJ IIP approval by NJ BPU: ~$202.5M in formula-recovered investments with modest customer bill impact; additional ~$132M in matching projects, all part of broader Energize365 .

Notes

• FE Q1 2025 8-K earnings press release and Strategic & Financial Highlights: GAAP EPS $0.62, Core EPS $0.67, revenue $3.765B; segment and reconciliation details included .
• Earnings call transcript: Prepared remarks and detailed Q&A on regulatory strategy, O&M, financing, load trends, and transmission initiatives –.
• Prior-quarter context: Q4 2024 press release and S&F highlights (Operating EPS $0.67; Core EPS $0.61); Q3 2024 8-K and S&F highlights (Operating EPS $0.85; Core EPS $0.76) .