Sign in

You're signed outSign in or to get full access.

PC

PG&E Corp (PCG)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 core EPS was $0.33 and GAAP EPS $0.28; management reaffirmed 2025 non‑GAAP core EPS guidance of $1.48–$1.52 and lowered GAAP EPS guidance to $1.29–$1.35 .
  • Revenue grew 2.1% YoY to $5.983B; operating income declined to $1.220B as lower authorized ROE (10.28% vs 10.7%) and dilution from the 2024 equity offering weighed on results .
  • Against S&P Global consensus, PG&E delivered a slight miss on EPS ($0.33 vs $0.340*) and revenue ($5.983B vs $6.023B*); EBITDA was below consensus ($2.478B vs $2.702B*)—drivers included ROE step-down and timing/dilution effects .
  • Strategic narrative centers on affordability, wildfire risk mitigation, and load growth from AI/data centers; pipeline expanded to 8.7GW with 1.4GW in final engineering, expected online by 2026–2030 .
  • Potential catalysts: AB 1054 “constructive” legislative outcome in 2025, 2027–2030 GRC filing (May 15), path to parent holdco investment-grade, and execution on data center load connections .

What Went Well and What Went Wrong

What Went Well

  • Reaffirmed multi‑year growth: 2025 core EPS $1.48–$1.52 (midpoint +10% YoY) and at least 9% core EPS growth in 2026–2028; equity needs fully satisfied for $63B capex plan through 2028 .
  • Affordability progress: average residential electric rates lower in March YoY; non‑fuel O&M reduction tracking to 2% for 2025; connected 3,000+ new electric customers and ~400 EV charging ports in Q1 .
  • Management tone on legislative progress: “We expect [a] constructive legislative outcome yet this year” on AB 1054 and affordability model reinforced through upcoming GRC filing .

What Went Wrong

  • EPS, revenue, EBITDA modestly below consensus in Q1 (see Estimates Context); headwinds from ROE cut (10.7% → 10.28%) and equity dilution reduced quarterly earnings versus prior year .
  • Non‑core items increased YoY: $120M post‑tax (vs $68M), including wildfire‑related costs (Kincade/Dixie), investigation remedies (Zogg fire, OII), and SB 901 securitization effects .
  • Operating income declined YoY (Q1 2025: $1.220B vs Q1 2024: $1.276B) as rate resets and timing effects offset customer capital investment benefits .

Financial Results

YoY comparison (Q1 2024 → Q1 2025)

MetricQ1 2024Q1 2025
Revenue ($USD Billions)$5.861 $5.983
Operating Income ($USD Billions)$1.276 $1.220
GAAP EPS ($USD)$0.34 $0.28
Non‑GAAP Core EPS ($USD)$0.37 $0.33

Sequential comparison (Q4 2024 → Q1 2025)

MetricQ4 2024Q1 2025
Revenue ($USD Billions)$6.631*$5.983
Operating Income ($USD Billions)$1.178*$1.220
Non‑GAAP Core EPS ($USD)$0.31 $0.33
Values with asterisks retrieved from S&P Global.

Segment revenue breakdown (YoY)

SegmentQ1 2024Q1 2025
Electric Revenue ($USD Billions)$4.052 $4.135
Natural Gas Revenue ($USD Billions)$1.809 $1.848

KPIs (Q1 2025)

KPIQ1 2025
New electric customers connected3,000+
EV charging ports installed~400
Undergrounding constructed in high wildfire‑risk areas (miles)24
Strengthened poles/covered lines (miles)26

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
GAAP EPSFY 2025$1.30–$1.36 $1.29–$1.35 Lowered
Non‑GAAP Core EPSFY 2025$1.48–$1.52 (raised on Feb 13) $1.48–$1.52 Maintained
Non‑core items (post‑tax)FY 2025$360–$400M $400–$430M Raised
Equity needs to fund $63B capex2024–2028“Fully satisfied” “Fully satisfied” Maintained
Dividend (common)Q2 2025—$0.025 per share (payable Jul 15, 2025) New declaration

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 and Q4 2024)Current Period (Q1 2025)Trend
AB 1054 legislative frameworkEmphasized AB 1054 protections, expected constructive outcomes; focus on prudency and Wildfire Fund mechanics CEO expects “constructive legislative outcome” in 2025; avoids specifics while engaging policymakers Positive momentum; outcome‑dependent
Data center/AI load growthPipeline grew to 5.5GW; diversified demand; affordability benefit (1–2% bill reduction per GW) Pipeline now 8.7GW; 1.4GW in final engineering; 90% of 1.4GW expected online by 2030 Expanding pipeline
Affordability/O&M savingsDelivered 4% O&M reduction in 2024; plan for 2%+ annually; bills flat YoY in Jan 2025 Bills are down YoY; 2025 tracking to 2% O&M reduction; GRC to reflect efficiency gains Improving
Undergrounding & wildfire mitigation875 undergrounding miles completed; continued WMP/EPSS/PSPS use; filing guidelines evolving 24 miles constructed in Q1; 10‑year undergrounding filing later in 2025; cost/benefit emphasized (vegetation vs undergrounding) Continued execution; regulatory process
Tariffs/supply chainNoted domestic sourcing, financing flexibility Tariff exposure manageable; ~1/3 transformers from South Korea at ~12% tariff; lean system offsets inflation Manageable headwind
Credit ratings/IG pathMid‑teens FFO/debt and rating upgrades targeted Moody’s utility to IG; parent IG pending; legislative clarity a key trigger Improving; contingent on policy

Management Commentary

  • CEO Patti Poppe: “We’re confident in reaffirming our 2025 full year guidance range of $1.48 to $1.52… Based on active conversations in Sacramento, we expect constructive legislative outcome yet this year.” .
  • CFO Carolyn Burke: “Our core earnings of $0.33 are down $0.04… absorbing a lower ROE and dilution… we fully expect to deliver our 2025 plan” .
  • CEO on data centers: “Our pipeline has grown from 5.5 gigawatts to 8.7 gigawatts… we continue to estimate that for every gigawatt… customers may save between 1% to 2% on their electricity bill” .
  • CFO on tariffs: “Over 90% [of materials] is domestic… 1/3 of our transformers are sourced internationally from South Korea… ~$100M of our total spend… very manageable” .
  • CEO on undergrounding economics: “Only $1/month of our customers’ bill is undergrounding today, yet $20/month is vegetation management” .

Q&A Highlights

  • AB 1054 outcome: Management expects constructive action in 2025; avoided specifics but emphasized affordability and capital access for customers .
  • GRC differentiators: Filing reflects the “simple, affordable model,” passing O&M savings to customers, aiming to interrupt double‑digit increases and hold bills at 2–4% increases .
  • Data center timing: ~90% of 1.4GW in final engineering expected online by 2030; incremental transmission CapEx largely under FERC, not GRC .
  • Undergrounding program: 10‑year filing planned; focus on highest‑risk miles; long‑term cost benefits through reduced vegetation/inspection spend .
  • Ratings: Parent IG likely post legislative clarity; financial metrics already in line; Moody’s upgraded utility to IG .

Estimates Context

MetricConsensus (Q1 2025)Actual (Q1 2025)Surprise
Primary EPS Consensus Mean ($)0.34033*0.33 -0.01033 (—)
Revenue Consensus Mean ($USD Billions)6.023*5.983 -$0.040 (—)
EBITDA Consensus Mean ($USD Billions)2.702*2.478-$0.224 (—)
Values with asterisks retrieved from S&P Global.
Interpretation: Slight misses versus consensus on EPS, revenue, and EBITDA. Drivers include the ROE step‑down to 10.28% and dilution from 2024 equity issuance, partially offset by customer capital investment and O&M savings .

Key Takeaways for Investors

  • Affordability narrative is gaining traction: bills down YoY and O&M reductions tracked to plan; Q1 miss is modest and guidance intact—supports defensive utility thesis with improving cost discipline .
  • Legislative outcome on AB 1054 is a near‑term catalyst for parent rating upgrades and financing costs; monitor Sacramento developments through 2025 .
  • Data center load growth is a multi‑year tailwind: 8.7GW pipeline with 1.4GW in final engineering can lower bills 1–2% per GW and enhance rate base growth via FERC transmission investment .
  • GRC filing (May 15) should showcase “simple, affordable model” with embedded O&M savings; constructive outcomes could underpin multi‑year EPS growth trajectory .
  • Non‑core items (wildfire claims, investigation remedies, SB 901) remain a swing factor; track resolution cadence and cost recovery mechanisms .
  • Dividend reinstatement cadence resuming ($0.025 common declared for Q2 2025), with a longer‑term payout target of ~20% by 2028—supports a gradual income profile .
  • Tactically: shares may be sensitive to AB 1054 headlines and GRC read‑through; medium‑term thesis hinges on affordability execution, load growth monetization, and ratings improvement .
Notes: 
- All document claims are cited from PG&E Q1 2025 8-K, earnings presentation, Q1 press release, Q1 earnings call transcript, and related press releases.
- Values retrieved from S&P Global are marked with asterisks.