FIRSTENERGY CORP (FE) Q3 2025 Earnings Summary
Executive Summary
- Q3 2025 delivered solid operational and financial execution: revenue rose to $4.15B and GAAP EPS reached $0.76; Core EPS increased to $0.83 (+9% YoY), driven by new Pennsylvania base rates and transmission rate base growth .
- Management narrowed FY25 Core EPS guidance to $2.50–$2.56 (upper half of original range), and lifted 2025 investment plan 10% to $5.5B, reinforcing confidence in the 6–8% Core EPS CAGR through 2029 .
- Notable estimate beats: Q3 revenue of $4.15B vs S&P Global consensus $3.94B* and Core/Primary EPS $0.83 vs $0.77*, supported by regulated rate outcomes and formula-rate transmission investments . Values retrieved from S&P Global.
- Strategic catalysts highlighted: expected 30% increase in transmission investments in the next five-year plan (rate base CAGR up to 18%), and a proposed 1.2 GW CCGT in West Virginia around 2031, positioning FE for data-center-driven load growth while preserving customer affordability .
What Went Well and What Went Wrong
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What Went Well
- Transmission growth and new PA rates: “We are well-positioned to deliver 2025 Core Earnings between $2.50 to $2.56 per share,” backed by 16% integrated transmission rate base growth and PA base rates effective Jan 1, 2025 .
- Capital discipline and financing: ~$4.0B YTD investments (+~30% YoY) with ~$6B of 2025 financings at ~4.4% average rate; consolidated TTM ROE improved to 10.1% .
- Load growth opportunity: long-term contracted and pipeline data center demand points to nearly 50% system peak increase by 2035; FE sees ~30% higher transmission capex in the 2026–2030 plan .
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What Went Wrong
- Higher planned O&M: Core EPS tailwinds were partially offset by maintenance work accelerated into 2025 and higher approved operating expenses with new base rates .
- Effective tax rate headwind: Integrated segment earnings benefit from transmission investments was “more than offset by a higher effective tax rate” .
- Affordability pressure in deregulated states: generation costs drove ~85% of recent bill increases; management is advocating reforms to PJM capacity constructs (earnings-neutral near term but a policy overhang) .
Financial Results
Segment breakdown (Q3 2025):
KPIs:
Guidance Changes
Earnings Call Themes & Trends
Management Commentary
- “We remain ahead of plan on each of our key financial metrics… we are well-positioned to deliver 2025 Core Earnings between $2.50 to $2.56 per share.” — Brian X. Tierney, CEO .
- “We now expect transmission investments included in the 2026 to 2030 capital plan to increase by 30%… resulting in compound transmission rate base growth of up to 18% per year through 2030.” .
- “Our long-term pipeline of demand… has nearly doubled since our fourth quarter earnings call… contracted customer demand increased by over 30%.” .
- “Through September… cash from operations was $2.6 billion… we successfully completed eight subsidiary debt transactions totaling nearly $3.5 billion at an average coupon of 4.8%.” — CFO Jon Taylor .
Q&A Highlights
- WV generation recovery: CWIP filing anticipated for self-build; BOT option under RFP; significant earnings contribution begins post-operations (~2031) .
- Transmission capex confidence: ~60% reliability, ~40% regulatory-required; pending PJM open window awards could be incremental to plan; portfolio resilient to allocation shifts .
- Affordability: Generation costs driving bill increases; FE advocating PJM capacity auction reform to ensure customers pay for capacity that shows up .
- Ohio regulatory: Base rate case decision expected in November; multi-year rate plan to follow promptly to support investment recovery .
- Industrial load outlook: Expect mid-single digit increases in 2026 driven by data centers; early rebound observed in fabricated metals/steel .
Estimates Context
- Q3 2025 beats: Revenue $4.15B vs consensus $3.94B*, and Core/Primary EPS $0.83 vs $0.77*, reflecting PA base rate implementation and 11–16% transmission rate base growth under formula rates . Values retrieved from S&P Global.
- Implication: Street models may need to reflect higher FY25 midpoint ($2.53) and 2025 capex (+10%), with upward revisions to transmission capex trajectory (2026–2030) and potential WV generation additions post-approval .
Key Takeaways for Investors
- Core execution is intact: raised FY25 Core EPS midpoint and increased capex plan indicate durable earnings trajectory toward upper half of the 6–8% CAGR target .
- Transmission is the growth engine: planned +30% capex in next five-year plan with formula-rate recovery and constructive ROEs supports rate base CAGR up to 18% through 2030 .
- Data center load tailwinds: contracted/pipeline demand expands visibility; FE’s footprint central to PJM positions it to capture interconnections and network upgrades .
- Near-term regulatory catalysts: Ohio base rate decision and subsequent multi-year plan, plus PJM open window awards (1Q26) can refine capex and rate base trajectory .
- O&M/affordability managed: Accelerated maintenance absorbed within plan; policy engagement on PJM capacity to mitigate customer bill pressure in deregulated states .
- Optionality in WV: 1.2 GW CCGT and 70 MW solar proposal adds regulated generation growth post-approval; structure (BOT vs self-build) will influence construction-phase earnings profile .
- Trading lens: Bolded beats on both revenue and EPS, tightened FY25 guidance, and visible transmission/IRP catalysts provide positive momentum; monitor Ohio order, PJM awards, and affordability discourse for further sentiment drivers .