FIRSTENERGY CORP (FE) Q4 2024 Earnings Summary

Executive Summary

Q4 2024: GAAP EPS $0.45 on $3.2B revenue; Operating EPS $0.67; Core EPS $0.61. Operating EPS was within guidance; YoY EPS and core EPS rose versus Q4 2023 despite Ohio ESP V headwinds and higher tax rate .
Company introduced 2025 Core EPS guidance of $2.40–$2.60 and extended the Energize365 program to $28B through 2029 (8% increase), targeting ~9% rate base CAGR and ~14%+ FFO/Debt; dividend expected to rise to $1.78 in 2025 .
Regulatory/capital catalysts: PA base rate case effective 1/1/25 ($225M net revenue increase), Ohio ESP VI filed (with DCR tied to reliability), and PJM awarded ~$1.25B FET projects plus JV Valley Link awards, positioning FE for incremental transmission growth .
Management highlighted rising financing costs (+~100 bps in 10-year yields since October), pension/OPEB and Signal Peak volatility, and maintained affordability (bills ≤ peers; share of wallet <5%)—key watch items for estimate resets and stock narrative .

What Went Well and What Went Wrong

What Went Well
- Constructive 2024 regulatory outcomes across multiple jurisdictions (PA LTIP III $1.6B; NJ EE&C $817M ROE 9.6%; OH Grid Mod II ~$$400M)—foundation for 2025 investment ramp to $5B and 6–8% Core EPS CAGR .
- PJM awarded major transmission projects (~$1.25B to FET; plus Valley Link JV lines), expanding FE’s long-duration rate base growth runway; management sees ~$675M FE share for JV .
- Dividend growth and credit profile: 2024 declared dividends $1.70 (+6% YoY); Board declared $0.445 quarterly dividend (annualized $1.78) for 2025; investment grade affirmed across FE and subsidiaries; plan to keep ~60–70% payout of Core EPS .
What Went Wrong
- Financing cost headwinds and rate outcomes modestly below plan: higher interest rates increased borrowings; ATSI ROE incentive reduced by 50 bps; Ohio DCR revenues frozen at May 2024 levels absent increases under ESP IV .
- Demand/weather impacts: Q4 heating degree days ~10% below normal; weather-adjusted load flat YoY for 2024 (residential/commercial slightly down; industrial stronger), tempering revenue uplift .
- Pension/OPEB and Signal Peak volatility: non-core contribution dropped faster than expected as interest rates rose and coal prices declined, prompting shift to Core EPS reporting to reduce earnings noise .

Financial Results

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Billions)	$3.3	$3.7	$3.2
GAAP EPS ($)	$0.08	$0.73	$0.45
Operating EPS (non-GAAP) ($)	$0.56	$0.85	$0.67
Core EPS (non-GAAP) ($)	$0.51	$0.76	$0.61

Segment Core EPS (non-GAAP) contribution by quarter:

Segment	Q2 2024	Q3 2024	Q4 2024
Distribution	$0.22	$0.38	$0.31
Integrated	$0.20	$0.35	$0.22
Stand-Alone Transmission	$0.14	$0.13	$0.13
Corporate/Other	($0.05)	($0.10)	($0.05)
FE Consolidated	$0.51	$0.76	$0.61

Notes:

Weather: Q4 heating degree days were ~10% below normal (negative impact); total distribution deliveries essentially unchanged YoY in Q4 .
Credit metric: 2024 FFO/Total Debt ~14% excluding SEC/OOCIC payments and a historic storm; actual ~12.5% in 2024 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Operating EPS (non-GAAP)	FY 2024	$2.61–$2.81	$2.61–$2.71	Midpoint lowered; narrowed range
Core EPS (non-GAAP)	FY 2025	N/A	$2.40–$2.60	Introduced Core EPS guidance
Dividend (annual declared)	FY 2025	$1.70 (FY 2024 declared)	$1.78 (subject to Board)	Raised
CapEx	FY 2024	$4.3B plan	$4.6B actual	Increased ~7% vs plan
CapEx	FY 2025	N/A	$5.0B plan	Introduced
Investment Program	2024–2028	$26B	2025–2029 $28B (+8%)	Raised plan scope
FFO/Debt Target	Multi-year	~14%	~14%+	Reaffirmed/target trajectory

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3)	Current Period (Q4 2024)	Trend
Ohio regulatory construct (ESP V withdrawal; ESP VI)	Q3: withdrew ESP V, aimed to align ESP VI with base rate case; audit completed; modest financial implications	Q4: auditor report proposed 51% equity and 9.63% ROE; FE to respond within 30 days; ESP VI filed to support reliability investments; DCR revenues frozen under ESP IV	Derisking, clarity improving; near-term revenue cap headwind
Data center demand	Q3: large-load pipeline >60 studies ≥500 MW; pipeline real in MD/WV/OH	Q4: 2.6 GW active/contracted through 2029; 5.5 GW pipeline; incremental ~$350M Tx not in base plan	Accelerating pipeline; upside optionality
Transmission growth (PJM)	Q3: submitted ~$3.8B JV portfolio; ~$1B projects outside JV	Q4: PJM awards ~$1.25B to FET + JV Valley Link projects; FE share ~$675M; JV off-balance-sheet financing	Positive awarded projects; execution focus
Financing costs/interest rates	Q2: affirmed plan; later debt activity improved liquidity	Q4: 10-year Treasury +~100 bps since Oct; higher financing costs impacting 2025 guidance	Headwind into 2025
Pension/OPEB & Signal Peak	Q2: progress on lift-out planning	Q4: non-core volatility led to shift to Core EPS reporting; funded status ~84% YE	Reduced earnings noise; ongoing monitoring
Affordability/customer bills	Q3: PJM capacity auction raises bills 11–19% (2025)	Q4: share of wallet <5%; rates at/under peer averages by state	Maintaining affordability position

Management Commentary

“2024 was a year of extraordinary structural change…We delivered 2024 GAAP earnings of $1.70 per share. Operating earnings were $2.63 per share…benefited from new rates and investments…impacted by lower sales volumes…storm activity…and Ohio revenues below plan due to ESP V” .
“We are introducing core earnings…From 2022 to 2024, high-quality core earnings have grown by 33%…Beginning in 2025…core earnings per share guidance range of $2.40–$2.60” .
“We anticipate investing $5 billion in our regulated properties during the year, an increase of approximately 11% over 2024…We believe FirstEnergy represents a low risk, reasonable return investment proposition…with an attractive total return opportunity of 10% to 12%” .
“Our well-positioned footprint continues to be very attractive to data center developers…2.6 GW active or contracted through 2029…pipeline just over 5.5 GW…potential incremental $350 million to our base capital program” .

Q&A Highlights

Guidance reset and growth: Management targets 6–8% Core EPS CAGR and prefers to be toward the upper end; 2025 guidance midpoint $2.50, with O&M discipline outside PA where increases are recovered .
Ohio rate case audit: Auditor proposed 51% equity and ~9.63% ROE; FE sees proposals consistent with peers and will respond; aims for constructive adjudication .
Transmission JV financing: FE expects ~$675M share of JV projects; JV off-balance-sheet; FE subsidiaries’ CapEx in plan; equity contribution to JV expected .
Capital/Equity: Base plan needs no incremental equity (excluding employee programs), but incremental contracted data center CapEx (~$350M) could be financed with a portion of equity depending on location and recovery mechanism .
Affordability and bill headroom: FE bills either lower than or equal to in-state peers; share of wallet <5% across jurisdictions; O&M kept flat outside PA .
Pension funded status: ~84% at YE24; lower asset returns offset higher discount rates; lift-out reduced obligations .

Estimates Context

Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was not available at time of analysis due to data access limits, so beat/miss vs consensus cannot be assessed. We attempted retrieval via S&P Global but encountered API request limits. If you want, we can re-pull estimates to quantify the comparison once access resets.
Values would be retrieved from S&P Global.*

Key Takeaways for Investors

Regulatory foundation supports investment-led growth: $225M PA rate increase effective 1/1/25 and ~75% formula rate recovery underpin 2025 capex and Core EPS trajectory .
Transmission catalysts: PJM awards (~$1.25B) and Valley Link JV lines add multi-year visibility; FE expects ~$675M JV share and individual awards; near-term pipeline likely a narrative positive .
Data center load optionality: 2.6 GW active/contracted through 2029 plus 5.5 GW pipeline could drive incremental transmission and distribution investments beyond base plan .
Financing cost headwinds visible in 2025: +~100 bps in 10-year Treasury since Oct and ATSI ROE adder removal temper near-term earnings; watch rate moves and Ohio DCR mechanics under ESP IV .
Earnings quality focus: Shift to Core EPS reduces pension/Signal Peak volatility; dividend growth aligned to 60–70% payout of Core EPS (2025 annualized $1.78 declared) .
Affordability and balance sheet: Strong affordability vs peers and improving FFO/Debt (~14% target) support valuation resilience amid macro cost pressures .
Near-term trading lens: Headlines around Ohio audit/ESP VI, PJM project execution updates, and data center contracting could drive sentiment and estimate revisions.

References:
Q4 2024 press release and 8-K: .
Q4 2024 earnings call transcript: .
PJM project awards; JV Valley Link: .
Dividend increase press release: .
Q3 2024 press release and call: .
Q2 2024 press release: .
Investor FactBook & Strategic Highlights: .