FIRSTENERGY CORP (FE) Q2 2025 Earnings Summary

Executive Summary

Q2 2025 delivered GAAP EPS of $0.46 and Core EPS of $0.52, with EPS beating Wall Street consensus; revenue was broadly in line, and management reaffirmed full-year Core EPS guidance of $2.40–$2.60 targeting the upper half .
Growth drivers included new Pennsylvania base rates and transmission rate base expansion; headwinds were milder weather (≈3% demand reduction) and annual transmission true-ups .
Strategic positioning improved: YTD investments reached $2.5B vs $1.9B last year, cash from operations tracked ahead of plan, and FFO/Debt is targeted at 14%+ through 2029 .
Regulatory and growth catalysts: Ohio base rate case decision expected by year-end, WV IRP (by Oct 1) with potential new dispatchable generation, and accelerating data center demand requiring incremental transmission investment .

What Went Well and What Went Wrong

What Went Well
- New Pennsylvania base rates and formula-rate transmission growth lifted Core EPS; CEO: “We are delivering on each of our key financial metrics and are on track to deliver results in the upper half of our guidance range.” .
- Strong capital deployment and discipline: YTD investments $2.5B (+29% YoY), baseline O&M below plan, and robust CFFO; CFO: “Cash from operations was $1.7B through June 30… investor demand for our debt remains strong.” .
- Data center pipeline momentum: beyond-2029 pipeline up >80% to 11.1 GW, contracted 2029 demand +~25% since February; CEO: “Data center growth… likely to require additional transmission investments.” .
What Went Wrong
- Milder weather reduced Q2 customer demand by ~3%, pressuring volumes despite rate actions .
- Stand-Alone Transmission Core EPS down $0.01 YoY from annual revenue requirement true-ups despite 8% rate base growth and higher capital deployment .
- Corporate/Other EPS decreased $0.04 YoY on higher financing costs tied to debt extinguishment related to the FET transaction .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025
Total Revenues ($USD Billions)	$3.28	$3.77	$3.38
GAAP EPS ($)	$0.08	$0.62	$0.46
Core EPS (non-GAAP) ($)	$0.51	$0.67	$0.52
EBIT Margin %	17.04%*	20.74%*	19.85%*
EBITDA Margin %	42.13%*	31.31%*	33.67%*

Values marked with * retrieved from S&P Global.

Consensus vs actual (Wall Street, S&P Global):

Metric	Q2 2025 Consensus	Q2 2025 Actual
EPS ($)	0.487*	0.52
Revenue ($USD Billions)	3.389*	3.38
EPS - # of Estimates	11*	—
Revenue - # of Estimates	4*	—

Values marked with * retrieved from S&P Global.

Segment Core EPS contribution:

Segment Core EPS	Q2 2024	Q2 2025
Distribution	$0.22	$0.28
Integrated	$0.20	$0.20
Stand-Alone Transmission	$0.14	$0.13
Corporate/Other	$(0.05)	$(0.09)
Total Core EPS	$0.51	$0.52

KPIs and operating drivers:

KPI	Q2 2024	Q2 2025
Investments ($USD Billions)	$1.0	$1.4
Baseline O&M ($USD Millions)	$341	$345
Total Wires Sales (MWh ‘000s, Actual)	35,481	34,510

Key drivers (FE slides):

Driver	Q2 2024	Q2 2025
Rates & Investments	+$0.06 EPS	+$0.04 EPS
Customer Demand	–$0.03 EPS	–$0.01 EPS
Revenue True-Ups	+$0.01 EPS	–$0.02 EPS
Net Financing Costs	+$0.01 EPS	+$0.01 EPS
O&M and Other OpEx	+$0.01 / –$0.02 EPS	–$0.01 / –$0.02 EPS

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Core EPS (non-GAAP)	FY 2025	$2.40–$2.60 (introduced Q4 2024)	$2.40–$2.60; targeting upper half	Maintained; reiterated upper-half target
Core EPS CAGR	2025–2029	6–8%	6–8%	Maintained
Investment Plan	2025	$5.0B	$5.0B	Maintained
Investment Plan	2025–2029	$28B	$28B; potential Tx up to +20% in next 5-yr plan	Maintained; upside flagged
Dividend	2025	Planned $1.78/sh total (4×$0.445)	Declared $0.445 for Sept 1; plan totals $1.78/sh in 2025	Increased vs 2024; confirmed execution

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024 and Q1 2025)	Current Period (Q2 2025)	Trend
Data center demand	2.6 GW active/contracted through 2029; JV valley link approval; Meta Bowling Green DC; ~95 GW large-load studies since 2024	Pipeline >80% to 11.1 GW beyond 2029; 2029 contracted +~25%; 40 new large-load studies YTD (PA/OH)	Accelerating
Ohio regulation	Base rate case audit constructive; ESP VI filed; settlement dialogue; no regulatory overhang	PUCO decision likely by year-end; forward test years and true-ups expected under new framework	Progressing constructively
WV IRP & generation	Exploring dispatchable additions; potential 1,000 MW CCGT over ~10 yrs	IRP filing by Oct 1; load/generation recommendations; supportive integrated construct	Moving forward
PJM capacity & affordability	Capacity costs elevated without new dispatchable build; state-led solutions needed	Prices cleared at cap; FE advocating state action; governors’ engagement noted	Elevated focus
Financing & credit	2024 FFO/Debt ~14% ex one-offs; $2.1B utility debt at 5.1%	$2.5B converts at ~3.75% coupon (June); 14%+ FFO/Debt targeted thru 2029	Strengthening
O&M discipline	1Q25 baseline O&M $340M, below plan	Q2 baseline O&M $345M; YTD O&M favorable vs plan	Sustained discipline

Management Commentary

CEO: “We are delivering on each of our key financial metrics and are on track to deliver results in the upper half of our guidance range.” .
CEO on Pennsylvania: “[We are] proud to be the largest electric utility in the state… investing $15B from 2025–2029,” including ~$10B capex and ~$5B Opex .
CFO: “Through June 30, our cash from operations was $1.7 billion… six subsidiary debt transactions totaling $1.6 billion, average coupon 5%… $2.5 billion convertible at ~3.75% reduces 2026 financing risk by over 40%.” .
CEO on transmission: “Expect transmission investment to increase up to 20% in our next five-year plan” and pursuing PJM open windows .

Q&A Highlights

EPS cadence and O&M: Management expects to remain within 6–8% Core EPS CAGR and targets the upper end; O&M increases are primarily Pennsylvania-related per recent base rate case, with flat O&M elsewhere .
Ohio base rate case: Audit suggested lower ROE and equity layer, but FE will respond and expects a constructive outcome; adjudication likely, no regulatory overhang .
WV generation: Potential $4–$6B over 12–15 years for 3–4 GW CCGT build to replace coal and support growth; financing could mix CFO, debt, and equity-like instruments .
Capital structure: Maintaining ~100 bps cushion in credit metrics; incremental pipeline CapEx may include some equity, depending on recovery form (Tx vs formula-like) .
Bill headroom: FE bills at or below peers; share-of-wallet under 5%; focus on affordability and O&M discipline .

Estimates Context

Q2 2025 EPS beat consensus ($0.52 actual vs $0.487 consensus), while revenue was broadly in line ($3.38B actual vs $3.389B consensus). Numbers of estimates: EPS (11), revenue (4). Values retrieved from S&P Global.
The beat was driven by new Pennsylvania base rates and transmission rate base growth; mild weather and transmission true-ups partially offset .

Key Takeaways for Investors

FE executed a clean EPS beat and reaffirmed FY Core EPS guidance with upper-half targeting; this supports near-term sentiment and potential multiple support .
Rate-backed investment story is intact: $5B in 2025 and $28B through 2029, with ~75% formula-rate recovery and potential transmission plan upside up to 20% in the next cycle .
Data center load is a powerful long-term tailwind; contracted load is rising and pipeline expansion points to incremental regulated investment opportunities .
Ohio is a watch item but trending constructive: base rate decision expected by year-end; forward test years and annual true-ups should reduce regulatory lag once implemented .
WV IRP could unlock regulated generation CapEx over the next decade, enhancing earnings visibility and enabling economic development .
Balance sheet and liquidity improving: FFO/Debt targeted at 14%+, convert refinance lowered near-term holdco risk, and debt demand remains strong .
Operational discipline continues: baseline O&M controlled and aligned with reliability commitments; keep monitoring weather impacts and transmission true-ups .