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PPL Corp (PPL)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 was solid: ongoing EPS $0.48 (vs. $0.42 a year ago) on operating revenue $2.24B; GAAP EPS $0.43 (vs. $0.29) as O&M efficiencies and rider/Formula Rate mechanisms offset higher interest expense .
  • Results beat S&P Global consensus: EPS $0.48 vs. $0.456*; revenue $2.239B vs. $2.194B*; EBITDA $951M vs. $947M*; PPL narrowed 2025 ongoing EPS guidance to $1.78–$1.84 (midpoint unchanged at $1.81) and reaffirmed 6–8% annual EPS and dividend growth through at least 2028 .
  • Key catalysts: accelerating data center pipeline (PA advanced-stage projects rose to 20.5 GW; KY data center requests to ~8.7 GW), constructive KY CPCN approval for two new 645 MW NGCC units, and KY rate-case settlement structure; PA filed first base distribution rate case in a decade .
  • Financing de-risked: ~$1.0B of equity forwards executed in August; ~$1.4B of ~$2.5B 2025–2028 equity plan now locked, supporting credit metrics (FFO/debt 16–18%) .

What Went Well and What Went Wrong

  • What Went Well

    • Ongoing EPS growth and beat: $0.48 vs. $0.42 YoY; management cited “higher revenues from formula rates and rider recovery mechanisms” and “lower operating costs,” beating EPS and revenue consensus* .
    • Regulatory progress: KPSC approved CPCN for two 645 MW NGCC units (Brown 12, Mill Creek 6); KY base rate settlement framework includes a stay-out to Aug 1, 2028 and a 9.9% ROE with mechanisms (GCR and a sharing clause) to mitigate lag .
    • Data center momentum: PA advanced-stage pipeline rose ~40% q/q to 20.5 GW; management: “these load additions are real… need to start building new generation now,” supporting transmission capex and JV optionality .

  • What Went Wrong

    • Higher interest expense remained a headwind across segments and at Corporate & Other, partially offsetting operating improvements .
    • KY CPCN: commission did not approve two proposed recovery mechanisms (Mill Creek 6 recovery, Mill Creek 2 stay-open costs) in CPCN; company will seek recovery in rate cases/future proceedings; management noted no near-term EPS impact and AFUDC treatment approved for Mill Creek 6 .
    • Volumes mixed: PA retail delivered electricity was essentially flat YoY (-0.2%) in Q3; management also flagged some isolated industrial softness in prior commentary .

Financial Results

Quarterly P&L progression (oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Billions)$2.504 $2.025 $2.239
Net Income ($USD Millions)$414 $183 $318
GAAP Diluted EPS$0.56 $0.25 $0.43
Ongoing EPS (non-GAAP)$0.60 $0.32 $0.48
EBITDA ($USD Millions)$1,028*$783*$951*
EBITDA Margin %41.05%*38.67%*42.47%*

Values with asterisks are retrieved from S&P Global.

Q3 2025 vs. S&P Global consensus

MetricConsensusActual
EPS (Primary)$0.456*$0.48
Revenue ($USD Billions)$2.194*$2.239
EBITDA ($USD Millions)$947*$951*

Values with asterisks are retrieved from S&P Global.

Segment EPS contributions (per share)

SegmentQ3 2024Q3 2025
Kentucky Regulated (reported)$0.23 $0.25
Pennsylvania Regulated (reported)$0.19 $0.21
Rhode Island Regulated (reported)$0.02 $0.04
Corporate & Other (reported)$(0.15) $(0.07)
Total GAAP EPS$0.29 $0.43
Kentucky (ongoing)$0.24 $0.26
Pennsylvania (ongoing)$0.19 $0.21
Rhode Island (ongoing)$0.04 $0.05
Corporate & Other (ongoing)$(0.05) $(0.04)
Total ongoing EPS$0.42 $0.48

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Ongoing EPS (non-GAAP)FY 2025$1.75–$1.87; mid $1.81 $1.78–$1.84; mid $1.81 Narrowed (midpoint maintained)
EPS and Dividend GrowthThrough ≥20286–8% (top half expected) 6–8% (top half expected) Maintained
Credit Metric TargetMultiyearFFO/debt 16–18% FFO/debt 16–18% Maintained
KY Base Rate CaseNew ratesN/ASettlement filed: ~+$235M revenues; 9.9% ROE; stay-out to Aug 1, 2028; GCR + sharing mechanisms New (pending final KPSC approval)
PA Base Rate CaseNew ratesN/AFiled net increase just over $300M (8.6%); decision expected Q2 2026; effective Jul 1, 2026 New filing

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025 and Q2 2025)Current Period (Q3 2025)Trend
Data center load growthPA advanced-stage ~11 GW (Q1); 14.5 GW (Q2); KY DC requests ~5.7 GW within 8.5 GW pipeline (Q2) PA advanced-stage 20.5 GW; KY DC requests ~8.7 GW, pipeline ~10 GW; probability-weighted KY growth ~2.8 GW Strong acceleration
Resource adequacy & new generationJV with Blackstone announced (Q2); supportive PA legislation discussed (HB 1272/SB 897) Emphasis that “load additions are real… need to start building new generation now”; JV dialogues ongoing Intensifying focus
Regulatory outcomesKY CPCN stipulation filed (Q2) KPSC CPCN approval for two NGCCs; KY base rate settlement framework; PA base rate case filed Positive momentum
Affordability/O&M efficienciesTargeting cumulative $150M O&M savings in 2025 vs. 2021 baseline (Q1/Q2) “On pace” for ≥$150M; deploying AI across operations for next wave of efficiencies Ongoing execution
Financing/Equity planATM use and equity plans outlined (Q1/Q2) ~$1B equity forwards in Aug; ~$1.4B of ~$2.5B through 2028 now executed De-risking plan

Management Commentary

  • Strategic message: “We remain confident in our ability to achieve at least the midpoint of our 2025 earnings forecast… our strategy to create the utilities of the future continues to deliver tangible results” .
  • Data centers/resource adequacy: “These load additions are real… the bottom line is that we need to start building new generation as soon as possible” .
  • Regulatory progress in KY: “This decision marks a significant milestone in our long-term generation investment strategy” .
  • Affordability and efficiency: “On pace to achieve our annual O&M savings target of at least $150 million compared to our 2021 baseline” and leveraging AI for predictive maintenance, customer service, and back-office functions .
  • Capital/financing: “Entered into forward contracts to sell approximately $1 billion of equity… total amount of equity executed under the forward agreements to approximately $1.4 billion of the $2.5 billion forecasted equity needs through 2028” .

Q&A Highlights

  • KY CPCN mechanisms: Commission denied without prejudice certain recovery mechanisms (MC6 and MC2 stay-open costs) in the CPCN; company expects to address recovery via current rate cases/future filings; no near-term EPS impact; AFUDC approved for MC6 .
  • Mill Creek 2 costs: Incremental ~$30M O&M and ~$40M capex through 2030 if MC2 operates beyond 2027; recovery sought in current KY rate case hearings .
  • PA resource adequacy policy: Legislative timing linked to broader budget/REGGI discussions; openness to “middle ground” with IPPs to spur new-build .
  • Transmission bill savings: Early stages imply ~10% savings on the transmission component per gigawatt added (declines as more load is added) .
  • JV timing: No announcement yet; active negotiations; prioritizes regulated-like ESA risk profile with creditworthy counterparties .

Estimates Context

  • Q3 delivered modest beats vs S&P Global consensus for EPS ($0.48 vs. $0.456*), revenue ($2.239B vs. $2.194B*), and EBITDA ($951M vs. $947M*), aided by higher formula/rider recoveries, lower O&M, and favorable weather/volume in KY .
  • 2025 guidance narrowed with midpoint unchanged ($1.81), reducing downside dispersion; management reiterated expectation to achieve at least midpoint and to deliver 6–8% EPS/dividend growth through ≥2028 .

Values with asterisks are retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term earnings trajectory remains intact: narrowed FY25 ongoing EPS range with maintained midpoint and Q3 beat vs. consensus underscore plan execution .
  • Regulatory tailwinds: KY CPCN approvals and base rate settlement structure (9.9% ROE, lag-mitigating mechanisms) plus PA base rate filing support multi-year earnings visibility .
  • Structural demand growth: PA advanced-stage data center pipeline reached 20.5 GW; KY pipeline expanded; supports incremental T&D capex and potential JV-driven generation under regulated-like ESAs .
  • Financing de-risked: $1.4B of planned $2.5B equity through 2028 already executed via forwards; supports credit targets (FFO/debt 16–18%) .
  • Watch list: KY rate case decision (year-end timing), PA rate case (mid-2026 effective), Mill Creek 2 recovery in rate case, and progress on PA resource adequacy legislation impacting new-build pacing .
  • Risk balancing: Interest expense remains a headwind; Commission preference to address some recovery mechanisms in rate cases increases process complexity but not near-term EPS risk per management .

KPIs and Operating Drivers

KPIQ1 2025Q2 2025Q3 2025
PA data center pipeline – advanced stage (GW)~11 ~14.5 ~20.5
KY economic development pipeline – total (GW)—~8.5 (incl. ~5.7 DC) Just under 10 (incl. ~8.7 DC)
KY probability-weighted growth (GW)—~2.5 ~2.8
PA retail delivered electricity (GWh, Q3)——9,453 (−0.2% YoY)
KY retail delivered electricity (GWh, Q3)——8,231 (+1.8% YoY)

Additional Relevant Disclosures (Q3 period)

  • KY base rate settlement press release details revenue splits (LG&E electric +$58M; gas +$45M; KU electric +$132M), stay-out to Aug 1, 2028, and mechanisms: GCR and sharing adjustment .
  • PA base rate case filing: requested ~8.6% total annual revenue increase (net just over $300M) with decision expected Q2 2026; effective July 1, 2026 .
  • Accenture/Apptio engagement supports IT/FinOps modernization aligned with O&M efficiency and AI deployment themes .

Values with asterisks are retrieved from S&P Global.