PUBLIC SERVICE ENTERPRISE GROUP INC (PEG)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 delivered solid results with net income of $589mm ($1.18 GAAP EPS) and non-GAAP operating earnings of $718mm ($1.43 EPS), supported by a full quarter of new base distribution rates and strong nuclear performance; consolidated operating revenues were $3.222B .
• Versus Wall Street, revenue modestly beat while non-GAAP EPS was in line; EBITDA missed consensus due to higher O&M and depreciation/interest costs. Revenue: $3.222B vs $3.143B*; EPS: $1.43 vs $1.433*; EBITDA: $1.186B vs $1.387B* (bolded in table) .
• 2025 non-GAAP operating EPS guidance of $3.94–$4.06 was reaffirmed; regulated capex plan of ~$3.8B and dividend raised 5% to an indicative $2.52/share reinforce confidence in predictable growth .
• Key narrative drivers: affordability actions amid PJM capacity price resets, growing large-load/data-center pipeline (>6.4 GW as of Mar 31), and ongoing pursuit of long-term nuclear contracts; all are potential stock catalysts alongside near-term Hope Creek refueling and policy outcomes on resource adequacy .

What Went Well and What Went Wrong

What Went Well

• Full-quarter recovery of new electric and gas base rates drove utility margin, with distribution margin +$0.20/share YoY; PSE&G reported $546mm net income/non-GAAP operating earnings in Q1, up from $488mm in Q1 2024 .
• Nuclear fleet ran reliably: ~8.4 TWh generation and 99.9% capacity factor, supporting system needs during multi-day cold spells; “we generated approximately 8.4 terawatt hours… achieving a capacity factor of 99.9%” — CEO Ralph LaRossa .
• Liquidity strengthened to ~$4.6B as of Mar 31 (incl. ~$894mm cash), reducing variable-rate exposure and funding capex without equity issuance .

What Went Wrong

• EBITDA below consensus: higher O&M (weather/inflation) and higher depreciation/interest from recent investments weighed on EBITDA versus sell-side expectations*; CFO cited O&M and interest as headwinds quarter-over-quarter .
• Affordability headwinds from PJM capacity auction outcomes; management flagged near-term bill impacts and mitigation efforts with BPU despite pass-through nature of BGS supply .
• LIPA contract uncertainty remains a small EPS risk ($0.05–$0.06–$0.08 range discussed across calls); outcome timing extends into Q2/Q3 2025, requiring cost actions if not renewed .

Financial Results

Quarterly Trend

Actual vs Consensus (Q1 2025)

Values with * retrieved from S&P Global.

Segment Breakdown

KPIs

Note: Sales YoY deltas as disclosed; prior-period unit-level totals not fully disclosed in attachments.

Non-GAAP Adjustments (Q1 2025)

• MTM loss (pre-tax) added $0.38/share; NDT activity contributed $(0.03)/share; tax effect $(0.10)/share; reconciling items total $0.25/share to bridge GAAP to non-GAAP .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Our service territory experienced multiple cold spells… prompting the highest winter peak load for both gas and electric in the last six years… PSEG Nuclear… achieving a capacity factor of 99.9%.” — Ralph LaRossa, CEO .
• “Distribution margin increased by $0.20/share… largely reflects the impact of the rate case… as approximately half of our annual gas revenues are realized in the first quarter.” — Dan Cregg, CFO .
• “We are reiterating PSEG's full year non-GAAP operating earnings guidance of $3.94 to $4.06 per share… and our long-term forecast of 5% to 7% CAGR through 2029.” — CEO/CFO .
• “We consistently manage our cost structure… The domestic concentration of our supply chain also limits tariff-related cost pressure.” — CEO .

Q&A Highlights

• Large-load timing/conversion: management frames potential conversion at 10–20% of pipeline; interconnections occurring in stages; resource adequacy discussions ongoing in NJ/PJM .
• FERC co-location vs front-of-meter: preference for settlement; not discriminatory; flexibility sought; nuclear deals not contingent on FERC outcome .
• LIPA: board vote rejected management recommendation to switch provider; next steps in May; PEG confident it can offset earnings if not renewed .
• Capacity prices and bills: with proxy price baked in, expect near-flat bill impact in future years vs June step-up; collar reduces volatility .
• Nuclear growth: Hope Creek fuel cycle moving to 24 months in fall 2025; Salem up-rate (~200 MW) remains in plan; PTC preserved by July tax legislation .

Estimates Context

• Q1 2025 actual results vs SPGI consensus: EPS $1.43 vs $1.433* (in-line); Revenue $3.222B vs $3.143B* (beat); EBITDA $1.186B* vs $1.387B* (miss), reflecting higher O&M and D&A/interest load consistent with management commentary .
• Guidance $3.94–$4.06 maintained; near-term estimate revisions likely modest, with utility margin stability offsetting nuclear ZEC roll-off and Hope Creek outage in H2 .

Values with * retrieved from S&P Global.

Key Takeaways for Investors

• Utility-led earnings quality: with ~90% of non-GAAP earnings from PSE&G and decoupled margins, PEG offers defensive growth; 2025 EPS guided +9% YoY midpoint .
• Regulatory and affordability posture: proactive customer bill mitigation and BPU dialogue reduce headline risk from PJM capacity resets; watch resource adequacy policy outcomes as potential positive .
• Nuclear optionality: strong operations + capacity collar + preserved PTC support downside; upside from long-term contracts and Salem up-rate; H2 Hope Creek outage is the main cadence item .
• Data-center demand: expanding pipeline (>6.4 GW as of Q1-end) creates multi-year load growth tailwinds and potential nuclear contracting opportunities; PEG’s fast engineering response is a competitive advantage .
• Balance sheet strength: ~$4.6B liquidity, low variable-rate debt, and no equity needs through 2029 underpin capex execution and dividend growth .
• Near-term trading setup: expect resilient prints with seasonal normalization and H2 outage; narrative catalysts include NJ policy decisions, nuclear contract announcements, and any LIPA resolution .

Note: All consensus figures marked with * obtained from S&P Global.