PUBLIC SERVICE ENTERPRISE GROUP INC (PEG)·Q4 2024 Earnings Summary

Executive Summary

• PEG delivered Q4 2024 non-GAAP Operating EPS of $0.84 (vs $0.54 YoY) on operating revenues of $2.47B (vs $2.61B YoY); GAAP EPS was $0.57 (vs $1.10 YoY). PSE&G drove the quarter with new electric/gas base rates effective Oct 15, while Power & Other improved on a non-GAAP basis on higher nuclear margin/PTC, despite GAAP losses from MTM/NDT .
• 2025 guidance initiated at $3.94–$4.06 non-GAAP EPS (+~9% at midpoint), underpinned by a full year of new base rates, clause recoveries and nuclear PTC support; management extended its 5–7% non-GAAP EPS CAGR through 2029 from the higher 2025 base .
• Capital plan raised to $22.5–$26.0B for 2025–2029 and PSE&G rate base CAGR maintained at 6–7.5%, starting from ~$34B YE’24 (+~12% YoY); no equity issuance or asset sales needed through 2029, and the dividend was lifted 5% to a 2025 indicative $2.52/share .
• Emerging load opportunity: large load/data center pipeline expanded from <400 MW a year ago to ~4,700 MW of inquiries; management highlighted potential to contract nuclear output at prices above the PTC floor as an upside lever .
• Potential stock reaction catalysts: higher-than-expected 2025 EPS base and larger capex runway without equity needs; investor focus on the pace of converting 4.7 GW load interest to projects and on PJM market/resource adequacy changes impacting customer bills and nuclear revenues .

What Went Well and What Went Wrong

• What Went Well
  • PSE&G delivered a strong Q4 with EPS contribution of $0.75 vs $0.59 non-GAAP YoY, driven by new base distribution rates and seasonal gas revenues; management emphasized predictable decoupled margins via the Conservation Incentive Program (CIP) .
  • Non-GAAP Operating EPS improved YoY in Q4 to $0.84, with Power & Other swinging to positive non-GAAP ($0.09 vs $(0.05) YoY) on higher recontracting prices and PTC benefits in H2 2024, as hedges rolled .
  • Strategic clarity: 2025 non-GAAP EPS guidance +9% midpoint, extended 5–7% EPS CAGR to 2029, capex plan raised to $22.5–$26B (>90% regulated), no equity issuance through 2029; dividend increased to $2.52 (118-year dividend history) .
• What Went Wrong
  • GAAP net EPS declined to $0.57 from $1.10 YoY on sizable MTM and NDT losses; Power & Other posted a GAAP loss of $(0.18) EPS in Q4 (vs $0.52 YoY) despite improved non-GAAP margin .
  • Headwinds into 2025 include higher interest and depreciation from larger investment balances, the scheduled Hope Creek refueling (with cycle extension work), and the end of NJ ZEC payments in May 2025 (partly offset by higher PTC threshold) .
  • Customer bill pressure: BGS auction outcomes and PJM capacity dynamics will raise electric bills from June 1; management highlighted advocacy for affordability and potential increased shopping by customers .

Financial Results

Consolidated results vs prior periods and estimates

Note: Operating Margin % is calculated from reported Operating Income and Operating Revenues.

Segment breakdown (Q4)

Operational KPIs

Trend context (prior quarters)

Consensus: We attempted to retrieve S&P Global consensus for Q4 2024 but it was unavailable due to access limits at the time of analysis. As a result, beat/miss vs Street cannot be quantified here.

Guidance Changes

Note on capital plan wording: The press release references a raise “up by $3.5B” and elsewhere “increase of approximately $3B” vs prior plan; both passages are in the company’s Q4 materials .

Earnings Call Themes & Trends

Management Commentary

• “2024 marks the 20th consecutive year that we have delivered results that have met or exceeded management’s non-GAAP Operating Earnings guidance to investors.” — Ralph LaRossa, CEO .
• “For 2025, we are initiating PSEG’s non-GAAP Operating Earnings guidance in the range of $3.94 to $4.06 per share… Drivers include the benefit of new base rates… and continued benefit of environmental attribute payments for our nuclear units, partly offset by higher financing costs.” .
• “Last year at this time, [large load and data center inquiries] totaled under 400 megawatts. Today, the interest has grown to 4,700 megawatts… Approximately 25%… incorporated into PJM’s 2025 system peak load forecast.” — CEO .
• “Our solid balance sheet enables the funding of PSEG’s robust 5-year capital program without the need to issue equity or sell assets through 2029.” .
• “PSEG Power & Other… realized a significant portion of the increase in the 2024 gross margin… during the second half of the year based upon the shape of our underlying hedges.” — CFO .

Q&A Highlights

• Nuclear commercialization and FERC: Management views recent FERC direction as generally favorable for flexibility; continuing discussions on behind-the-meter and front-of-the-meter structures; urgency acknowledged by FERC timelines .
• Data center vs. nuclear contracting: Load pipeline (4.7 GW) includes data centers and EV interconnections; potential for nuclear contracting does not preclude PSE&G front-of-meter solutions; timing depends on whether output can be sold vs. new facilities being built .
• PJM market structure/resource adequacy: Management is focused on reliability and affordability, questioning the efficacy of the current “market” and advocating for solutions; near-term collar pricing could add stability; PTC floor provides earnings protection .
• Hedging posture: While sensitivities are balanced against the evolving gross receipts definition, hedging levels are broadly similar to the historical ratable approach (e.g., high-90s for current year, tapering thereafter) .
• BGS/capacity impacts: Bill increases reflect PJM auction outcomes; PSEG does not profit on supply; expects more shopping by customers and is leaning into assistance/EE programs; noted high C&I one-year results in zone .

Estimates Context

• We attempted to retrieve S&P Global consensus estimates for Q4 2024 (EPS, revenue, EBITDA), but the data was unavailable at the time due to access limits. As a result, we cannot quantify Q4 beat/miss versus Street consensus in this recap. Management’s 2025 guidance implies ~9% growth at the midpoint versus 2024 non-GAAP EPS of $3.68 .

Key Takeaways for Investors

• 2025 reset is constructive: +9% non-GAAP EPS midpoint with full-year base rates and clause recoveries, extending a 5–7% EPS CAGR through 2029 and no equity needs—supportive for multiple and dividend durability .
• Regulated growth runway expanded: Capex plan raised to $22.5–$26B with PSE&G rate base CAGR 6–7.5% from a higher ~$34B YE’24 base; execution risk mitigated by past regulatory outcomes and formula transmission updates .
• Nuclear provides floor and optionality: PTC floor underpins earnings stability as ZECs roll off in May 2025; upside potential via longer-term nuclear contracting above PTC to support AI/data center load attraction .
• Demand-side catalyst: Large-load/data center inquiries (~4.7 GW) are a meaningful pipeline; watch conversion rates, timing, and capital requirements (grid interconnections vs. off-take contracts) .
• Headwinds to monitor: Higher interest/depreciation from a larger asset base, nuclear outage timing (Hope Creek fall 2025), and customer bill pressure from PJM capacity outcomes (policy/market design still evolving) .
• Short-term trading implications: Positive sentiment likely around raised capex without equity, dividend growth, and 2025 EPS base; near-term volatility could stem from policy headlines (PJM/FERC/NJ EMP) and lack of Street-consensus benchmarking this quarter.
• Medium-term thesis: Predominantly regulated earnings mix (~90%) with visible capex and decoupled margins (CIP) support compounding; optional nuclear commercialization and load growth serve as call options on top of core utility growth .

Citations:

• 8-K earnings release and attachments:
• Q4 2024 earnings call transcript:
• Q4 2024 earnings slides:
• Prior quarter press releases for trend: Q3 2024 ; Q2 2024