FirstEnergy Corp (FE) Reports Q3 2023 Earnings: Highlights and Analysis
FirstEnergy Corp (NYSE:FE) reported Q3 2023 GAAP earnings from continuing operations of $421 million, or $0.74 per basic share, on revenue of $3.5 billion.
The company narrowed its full-year 2023 operating earnings guidance range to $2.49 to $2.59 per share.
FirstEnergy Corp (NYSE:FE) affirmed its long-term, 6% to 8% targeted annual operating earnings per share growth rate.
The company's Q3 2023 operating results benefited from lower operating expenses, continued growth from regulated investments, stronger weather-adjusted sales, and tax benefits.
FirstEnergy Corp (NYSE:FE) released its Q3 2023 earnings report on October 26, 2023. The company reported GAAP earnings from continuing operations of $421 million, or $0.74 per basic share, on revenue of $3.5 billion. This is an increase from the Q3 2022 earnings of $334 million, or $0.58 per basic share, on the same revenue.
Financial Performance
FirstEnergy Corp (NYSE:FE)'s operating earnings were $0.88 per share in Q3 2023, which is at the upper end of the company's guidance range. This is an increase from the Q3 2022 operating earnings of $0.79 per share. The increase in earnings was driven by lower operating expenses, continued growth from regulated investments, stronger weather-adjusted sales, and tax benefits from the expected use of state net operating loss carryforwards.
Challenges and Mitigations
Despite the positive earnings drivers, the company faced challenges such as the impact of mild temperatures on Regulated Distribution sales, which reduced earnings by $0.06 per share compared to Q3 2022. Additionally, the company had to deal with lower pension credits and higher financing costs associated with higher debt issuances to support the company's capital program.
Company's Outlook
FirstEnergy Corp (NYSE:FE) narrowed its full-year 2023 operating earnings guidance range to $2.49 to $2.59 per share based on 573 million shares outstanding, from its original range of $2.44 to $2.64 per share. The company also provided a guidance range of $315 million to $375 million, or $0.55 to $0.65 per share for the fourth quarter of 2023, based on 574 million shares outstanding. The company affirmed its long-term, 6% to 8% targeted annual operating earnings per share growth rate.
Segment Results
The company's Regulated Distribution business saw lower operating expenses, higher revenues related to utility investment programs, and higher weather-adjusted load compared to Q3 2022. The Regulated Transmission business benefited from the company's ongoing Energizing the Future investment program, with the rate base increasing by more than 8% from Q3 2022. The Corporate/Other segment saw improved operating results due to income tax benefits and lower operating expenses.
Year-to-Date Results
For the first nine months of 2023, FirstEnergy reported GAAP earnings from continuing operations of $948 million, or $1.66 per basic share, on revenue of $9.7 billion. This compares to GAAP earnings of $809 million, or $1.42 per basic share, on revenue from continuing operations of $9.3 billion in the first nine months of 2022.
Explore the complete 8-K earnings release (here) from FirstEnergy Corp for further details.
This article first appeared on GuruFocus.
