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PPL Corp (PPL)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue rose to $2.211B (+8.9% YoY) while GAAP EPS was $0.24 and non-GAAP ongoing EPS was $0.34; ongoing EPS fell 15% YoY, primarily on higher operating costs and lower Rhode Island revenues .
  • Management unveiled an expanded $20B 2025–2028 capital plan and lifted average annual rate base growth to 9.8% (from 6.3% in the prior plan); 2025 ongoing EPS guidance set at $1.75–$1.87 (midpoint $1.81, ~7% YoY growth) .
  • Quarterly dividend increased ~6% to $0.2725 (payable Apr 1, 2025), following a $0.2575 declaration in Nov 2024; equity needs of ~$2.5B over the plan period with ATM expected to fund $400–$500M in 2025 .
  • Data center demand gains momentum: PA queue now ~56 GW with ~9 GW advanced; LG&E (KY) announced its first hyperscale data center customer (400 MW campus), with initial 130 MW expected online in Oct 2026 .

What Went Well and What Went Wrong

What Went Well

  • Expanded capital plan and growth runway: “updated business plan… $20 billion… expected to drive average annual rate base growth of 9.5–10% through 2028,” underpinning EPS and dividend growth targets .
  • Operational execution under severe weather: Achieved top quartile T&D reliability despite “some of the worst storms” and increased vegetation management to “enhance reliability and reduce storm-related outages” .
  • Strategic data center wins: First hyperscale data center customer in KY (400 MW campus); PA advanced-stage pipeline ~9 GW with expected $600–$700M transmission capex, ~$400M included in plan .

What Went Wrong

  • Ongoing EPS down YoY: Q4 ongoing EPS fell to $0.34 (vs $0.40), driven by higher operating costs, lower RI distribution/transmission revenue, and corporate interest/tax headwinds .
  • Segment softness in Rhode Island: RI ongoing EPS decreased by $0.03 vs Q4 2023 “primarily driven by lower distribution and transmission revenue” .
  • Higher corporate drag: Corporate and Other ongoing results decreased by $0.03 per share YoY, reflecting higher interest expense and lapping prior-year tax credits .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Billions)$2.031 $2.066 $2.211
GAAP EPS ($)$0.15 $0.29 $0.24
Ongoing EPS ($)$0.40 $0.42 $0.34
Operating Income ($USD Millions)$390 $428 $377
Net Income ($USD Millions)$113 $214 $177
Consensus EPS ($)N/A (SPGI consensus unavailable; attempts failed)*N/A*N/A*
Consensus Revenue ($USD Billions)N/A*N/A*N/A*

*Values retrieved from S&P Global would normally be used for consensus; our attempts to fetch SPGI estimates failed due to daily request limits.

Segment EPS contribution (reported and ongoing, per share):

Segment (Per Share)Q4 2023 ReportedQ4 2024 ReportedQ4 2023 OngoingQ4 2024 Ongoing
Kentucky Regulated$0.16 $0.17 $0.17 $0.17
Pennsylvania Regulated$0.18 $0.18 $0.20 $0.20
Rhode Island Regulated$0.04 $0.02 $0.05 $0.02
Corporate & Other($0.23) ($0.13) ($0.02) ($0.05)
Total$0.15 $0.24 $0.40 $0.34

KPIs (Electricity volumes):

KPI (GWh)Q4 2023Q4 2024
PA Retail Delivered8,810 8,929
KY Retail Delivered6,739 6,796
KY Wholesale149 134
Total Delivered (PA+KY)15,698 15,859

Non-GAAP adjustments in Q4 2024:

  • Special items of $79M after-tax (~$0.10/sh) related to RI integration, DER impairment, and IT transformation .
  • Ongoing EPS excludes these items; reconciliation provided in the release .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Ongoing EPSFY 2025N/A$1.75–$1.87 (midpoint $1.81) Introduced
EPS Growth TargetThrough 20286–8% through at least 2027 6–8% through at least 2028; expect top half Extended / Upweighted
Dividend Growth TargetThrough 20286–8% through at least 2027 6–8% through at least 2028; growth closer to ~6% near term Extended / Calibrated
Capital Plan2025–2028$14.3B (2024–2027 prior plan) $20B (2025–2028) Raised
Avg Rate Base GrowthThrough 20286.3% (prior plan period) 9.8% (through 2028) Raised
Equity Needs2025–2028N/A~$2.5B over plan period New
FFO/CFO-to-Debt2025–2028N/A16–18% maintained New/Confirmed
Quarterly DividendQ1 2025$0.2575 (declared Nov 2024) $0.2725 (declared Feb 13, 2025) Raised ~6%

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
AI/Tech initiativesEmphasized AI to balance grid, improve reliability/affordability “We will increasingly use AI… optimize asset planning… empower customers through digital solutions” Expanding scope and deployment
Resource adequacy (PA/PJM)Advocated state solutions; discussed auction price impacts on bills Active engagement with PA stakeholders; possible legislation enabling utility-owned generation; timeline could span months; 3–5 years to build dispatchable gen Intensifying push toward legislative solutions
Data centers (PA & KY)PA advanced ~5–8 GW pipeline; potential $400–$700M transmission capex; savings ~$3/customer/month per GW PA advanced ~9 GW; ~$400M of $600–$700M transmission included; KY first hyperscale customer (400 MW) announced Pipeline increasing; tangible wins in KY
Vegetation management/stormsQ2/Q3 noted higher storm/vegetation costs and strong response Increased spend to enhance reliability amid severe storms Elevated reliability focus
Regulatory (DSIC/rate cases)PA DSIC waiver pending; base cases timing discussed (KY 2025, PA earliest 2026) DSIC decision still pending; reiterates KY CPCN by Q1 and potential KY rate case post July 1; RI base case likely Q4 2025 Key 2025 regulatory cadence clarified
Financing strategyStrong balance sheet; flexibility; prior debt issuances Plan for ATM; $400–$500M equity in 2025; optional hybrids for equity credit Funding aligned to capex ramp

Management Commentary

  • “We delivered ongoing earnings of $1.69 per share… While we are disappointed that we fell $0.01 short of the increased ongoing earnings midpoint guidance of $1.70 per share, due to some very mild weather in the second half of December” — Vincent Sorgi, CEO .
  • “Our updated plan includes… $20 billion in expected infrastructure investments from 2025 through 2028… expected to drive average annual rate base growth of between 9.5% and 10% through 2028” — Vincent Sorgi .
  • “We expect equity needs of $2.5 billion over the planning period… plan to establish an ATM program… you could assume $400–$500 million this year” — Joe Bergstein, CFO .
  • “We will increasingly use AI and other advanced technologies… optimize our asset planning and maintenance… better manage supply and demand on the grid” — Vincent Sorgi .

Q&A Highlights

  • Kentucky CPCN and generation mix: Filing by end of Q1; scope includes 2 CCGTs (2030/2031), 400 MW batteries (~2028), environmental retrofits; decision expected Q4 .
  • Equity issuance cadence and instruments: ~$400–$500M 2025 via ATM; flexibility to use equity-like hybrids (50% equity treatment) depending on markets .
  • Data center capacity and reserve margins: With Mill Creek CCGT in 2027, can accommodate announced 400 MW; additional CCGTs and batteries required for further load growth .
  • Affordability: Aim to keep average bill increases within inflation; O&M savings with 8:1 CapEx leverage to mitigate bill impact .
  • Growth cadence: Expect ~7% in 2025; upper half of 6–8% CAGR post rate case cycle normalization .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was unavailable due to SPGI daily request limits; therefore, beat/miss analysis vs consensus is not provided.*
  • Guidance implies 2025 ongoing EPS midpoint of $1.81 (~7% YoY vs 2024 midpoint $1.69), which may prompt upward revisions to multi-year EPS trajectories contingent on regulatory timing and capex execution .

*Values retrieved from S&P Global would normally be used for consensus; our attempts to fetch SPGI estimates failed due to daily request limits.

Key Takeaways for Investors

  • The expanded $20B capex plan and 9.8% average rate base growth through 2028 anchor an EPS growth outlook in the upper half of 6–8%; dividend growth targeted ~6% near term given capex intensity .
  • Equity funding (~$2.5B through 2028, ~$400–$500M in 2025 via ATM) is a key watchpoint; management retains optionality via hybrids to balance cost of capital .
  • Regulatory catalysts in 2025: KY CPCN (Q1 filing; Q4 decision) and likely KY rate case after July 1; RI base case Q4 2025; PA DSIC waiver decision pending—these drive recovery timing and lag .
  • Data center momentum is tangible: KY’s 400 MW campus announcement and PA’s ~9 GW advanced pipeline suggest incremental transmission and potentially generation investments; watch quarterly updates to included capex .
  • Near-term earnings headwinds from higher opex (storms/vegetation) and RI revenue softness tempered Q4 ongoing EPS; Q1–Q2 execution on cost controls and regulatory recovery can stabilize quarterly trajectory .
  • Affordability remains central: management targets bill increases within inflation and leverages O&M savings (8:1 capex funding ratio), key to regulatory outcomes and customer sentiment .
  • Dividend raised to $0.2725 for Q1 2025 with ongoing 6–8% target; combined with EPS growth, management sees 9–12% total return potential over the plan horizon .