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PUBLIC SERVICE ENTERPRISE GROUP INC (PEG)·Q3 2025 Earnings Summary

Executive Summary

  • PEG delivered a revenue and EPS beat: revenue $3.23B vs $2.85B consensus and non-GAAP operating EPS $1.13 vs $1.01 consensus, aided by full-quarter benefit from Oct-2024 rate case and higher power pricing; GAAP EPS was $1.24 . Consensus figures from S&P Global show revenue +13% and EPS +11% vs estimates (see Estimates Context).*
  • Management narrowed FY2025 non-GAAP operating EPS guidance to the upper half of $4.00–$4.06 (from $3.94–$4.06) and reaffirmed 5–7% EPS CAGR through 2029; 2025 capex plan ~$3.8B with a 2025–2029 capital program of $22.5–$26B (regulated $21–$24B), with no need for new equity or asset sales .
  • PSE&G drove results (distribution margin up on new base rates), while Power & Other saw lower generation on a Hope Creek outage and higher O&M; LIPA extended PSEG Long Island’s OSA five years through 2030 (pending state approvals), supporting steady cash flows .
  • Near-term headwind: summer electric bills rose nearly ~20% from PJM capacity market pass-throughs; management is working with stakeholders on supply adequacy and noted bill impacts next June should be tempered by a FERC price collar and NJ’s three-year BGS gradualism .

What Went Well and What Went Wrong

  • What Went Well

    • Full-quarter lift from Oct-2024 distribution rate case and transmission/EE investments; PSE&G net income rose to $515M in Q3 (from $379M) and drove the consolidated beat . Quote: “Our results…reflect the expected incremental impact of new rates…for the full quarter and higher power pricing” .
    • Nuclear operations: 7.9 TWh produced; Hope Creek completed a 499-day breaker-to-breaker run and extended fuel cycle to 24 months to increase output over time .
    • Outlook/tone: Guidance narrowed to the upper half; reaffirmed 5–7% long-term growth; capital plan $22.5–$26B over 2025–2029 without new equity, supporting “consistent and sustainable dividend growth” . Q4 dividend declared $0.63 per share on Nov 18 .

  • What Went Wrong

    • Power & Other: Net income declined to $107M (from $141M) on higher nuclear O&M tied to the Hope Creek outage and lower generation volume, partly offset by higher pricing .
    • Cost inflation/financing: Higher O&M, depreciation and interest at PSE&G from distribution investments weighed on results despite rate relief .
    • Affordability headwinds: “summer electric bills…rise nearly 20%” due to PJM capacity; management emphasized supply additions and policy solutions to ease reliability/affordability pressures .

Financial Results

Consolidated Performance (oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
Operating Revenues ($MM)$3,222 $2,805 $3,226
Operating Income ($MM)$797 $817 $855
Net Income ($MM)$589 $585 $622
GAAP Diluted EPS$1.18 $1.17 $1.24
Non-GAAP Operating Earnings ($MM)$718 $384 $565
Non-GAAP Operating EPS$1.43 $0.77 $1.13

YoY reference for Q3:

  • Q3 2024 Operating Revenues $2,642MM; Operating Income $641MM; Net Income $520MM; Non-GAAP Operating EPS $0.90 .

Q3 2025 vs Estimates (S&P Global) and vs Prior Periods

MetricQ3 2024Q2 2025Q3 2025 ActualQ3 2025 ConsensusSurprise
Operating Revenues ($MM)$2,642 $2,805 $3,226 $2,847.7*+$378.3
GAAP Diluted EPS$1.04 $1.17 $1.24 ——
Non-GAAP Operating EPS$0.90 $0.77 $1.13 $1.013*+$0.117

Notes: Consensus from S&P Global (no GAAP consensus shown). Asterisk denotes S&P Global data retrieved via tool. Values retrieved from S&P Global.*

Segment Results (Net Income; old → new)

Segment ($MM)Q1 2025Q2 2025Q3 2025Q3 2024
PSE&G Net Income$546 $332 $515 $379
PSEG Power & Other Net Income$43 $253 $107 $141
PSEG Power & Other Non-GAAP Op. Earnings$172 $52 $50 $69

KPIs and Operating Metrics (old → new)

KPIQ1 2025Q2 2025Q3 2025
PSE&G Electric Sales (millions kWh)9,969 9,455 11,804
Nuclear Generation (GWh)8,355 7,511 7,903
Nuclear Capacity Factor (%)——92.4%
Large Load Inquiries (MW)>6,400 (as of 3/31) >9,400 (as of 6/30) ~11,500 (as of 9/30)

Non-GAAP adjustments in Q3: NDT gains (-$70MM pre-tax) and MTM gains (-$20MM pre-tax), with $33MM tax add-back; similar adjustments detailed in reconciliation .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Non-GAAP Operating EPSFY2025$3.94–$4.06 $4.00–$4.06 Narrowed to upper half (raised midpoint)
Long-term EPS Growth (non-GAAP)2025–20295%–7% 5%–7% reaffirmed Maintained
Capex (Regulated)2025~$3.8B ~$3.8B Maintained
Total Capital Program2025–2029$22.5–$26.0B $22.5–$26.0B Maintained
Regulated Capex2025–2029$21–$24B $21–$24B Maintained
PSE&G Rate Base CAGR2025–20296%–7.5% 6%–7.5% Maintained
Nuclear Generation202530–32 TWh (implied prior)30–32 TWh Maintained
DividendQ4 2025—$0.63 declared (payable by Dec 31) Maintained quarterly rate

Additional update: PSE&G filed a transmission formula rate update with FERC in Oct, implying ~$82MM increase in annual transmission revenue effective Jan 1, 2026 (subject to true-up) .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025, Q2 2025)Current Period (Q3 2025)Trend
Load growth/data centersLarge load inquiries >6.4 GW (Q1) and >9.4 GW (Q2), driven by data centers Inquiries rose to ~11.5 GW; ~20% conversion rate; mostly edge/smaller DCs; hyperscalers less evident Increasing pipeline, steady conversion
Affordability/capacity marketHighlighted PJM auction at $329/MW-day for 2026/27; expected near-flat bill impact when feathered into BGS, assuming other costs equal Summer bills rose ~20% from PJM pass-throughs; next June impact seen as limited by FERC price collar and NJ’s gradualism Affordability in focus; mitigation mechanisms emphasized
Nuclear operationsStrong Q1 output (8.4 TWh) and reliability 7.9 TWh in Q3; Hope Creek fuel cycle extended to 24 months; Salem uprate planned 2027–2029 Optimization underway; long-term uprates
Policy/regulated generationPursuing growth within 5–7% CAGR; potential to contract nuclear output under multi-year agreements Open to regulated gas/solar/storage in NJ; for new nuclear, enablement role without deploying own capital Greater willingness to participate in regulated supply solutions
Hedging/PTCPTC preserved; supports Salem uprate; hedging profile adjusted for PTC Hedging remains similar to prior ratable approach, moderated by PTC floor Stable risk management
Liquidity/financingStrong liquidity; balance sheet flexibility ~$3.6B available liquidity; no equity issuance needed for plan Balance sheet remains a support

Management Commentary

  • “Our results through the first nine months enable us to narrow our 2025 non-GAAP Operating Earnings guidance to the upper half of the range at $4.00 to $4.06 per share, from $3.94 to $4.06 per share prior.” — Ralph LaRossa, Chair, President & CEO .
  • “Notably, our solid balance sheet enables the funding of PSEG’s five-year capital investment program of $22.5 billion to $26 billion without the need to issue new equity or sell assets and provides the opportunity for consistent and sustainable dividend growth.” — Ralph LaRossa .
  • “We expect the capacity market impact on customer bills next June will be limited by… the FERC approved price collar… and… the basic generation supply mechanism that feathers in changes over a three year period in New Jersey.” — Management on affordability .
  • “We are more than willing to help the state achieve its goals in a regulated capacity… solutions for gas generation… more on the solar and battery fronts… for new nuclear… enable solutions… without putting our own capital to work.” — Management on supply solutions .

Q&A Highlights

  • Data centers and BYOG: Dialogue increasing across PJM; no mandatory additionality; NJ pipeline largely edge computing; PA seen as more forward-leaning on incentives than NJ .
  • Regulated supply options: PSEG open to regulated gas, storage, and solar; willing to enable new nuclear without deploying own capital; expects “all of the above” from policymakers .
  • Large load pipeline details: Mature applications moved from ~2,600 to ~2,800; conversions tracking ~20% of inquiries .
  • Hedging and PTC: Hedging approach broadly consistent with historical ratable profile, with PTC providing downside price protection .
  • Capital update cadence and equity: Full roll-forward including 2026 guidance in Feb 2026; confidence in managing plan without equity issuance maintained .

Estimates Context

  • Q3 2025 results beat S&P Global consensus on both non-GAAP EPS and revenue: $1.13 vs $1.013 EPS and $3.226B vs $2.848B revenue; beat magnitudes were ~$0.12 and ~$378M, respectively . Values retrieved from S&P Global.*
  • Implication: Given the narrowed FY2025 range to the upper half ($4.00–$4.06), Street estimates likely shift toward ~$4.03–$4.06 with limited upward revision potential until the Feb-2026 roll-forward. Management deferred 2026 outlook to year-end call .

Key Takeaways for Investors

  • Core utility (PSE&G) is carrying the earnings trajectory with full rate-case benefits and regulated growth vectors (T&D, EE, large-load connections) while merchant nuclear is a steady but more variable contributor due to outages and O&M .
  • The quarter’s beat and narrowed guidance reflect operational execution and higher pricing; sustained 5–7% LT EPS CAGR and no-equity funding underpin a durable total return profile .
  • Policy and supply adequacy are the pivotal narrative: near-term affordability pressures (capacity pass-through) vs. opportunities to participate in regulated generation/storage to add supply in NJ .
  • Nuclear optimization (Hope Creek 24-month cycle; Salem uprate) should modestly raise output and efficiency into 2027–2029; PTC floor remains a risk mitigant .
  • Watch near-term catalysts: FERC/NJ developments on capacity/IRP, clarity on regulated generation constructs, data-center conversion rates, and 2026 guidance/roll-forward in Feb 2026 .
  • Dividend continuity remains intact (Q4 $0.63 declared), supported by balance sheet and cash flow .
  • Transmission rate update (+$82MM annualized from 1/1/2026) and sustained capex (~$3.8B 2025) provide visibility to rate base growth .

Footnote: Asterisk denotes S&P Global consensus/actuals values retrieved via tool. Values retrieved from S&P Global.*