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FirstEnergy (FE) Q3 Earnings and Revenues Beat Estimates

Zacks Equity Research
·4 min read

FirstEnergy Corporation FE delivered third-quarter 2022 operating earnings per share (EPS) of 79 cents, beating the Zacks Consensus Estimate of 77 cents by 2.6%. Third-quarter earnings were near the upper end of the guidance range of 70-80 cents per share. However, the bottom line declined 3.6% from the year-ago earnings of 82 cents per share.

On a GAAP basis, FirstEnergy reported third-quarter 2022 earnings of 58 cents per share, down 31.8% from the prior-year quarter’s 85 cents.

Total Revenues

FirstEnergy generated operating revenues of $3,533 million in the third quarter, which surpassed the Zacks Consensus Estimate of $3,190 million by 10.8%. The top line improved 13.1% from the year-ago quarter.

 

FirstEnergy Corporation Price, Consensus and EPS Surprise

FirstEnergy Corporation Price, Consensus and EPS Surprise
FirstEnergy Corporation Price, Consensus and EPS Surprise

FirstEnergy Corporation price-consensus-eps-surprise-chart | FirstEnergy Corporation Quote

Highlights of the Release

In the trailing twelve-month period, FirstEnergy’s electricity sales improved 1.3% from the prior-year period, primarily due to improved sales volumes to industrial and commercial customers.

Total operating expenses for the third quarter amounted to $2,859 million, up 17.5% from the year-ago quarter’s $2,434 million, due to the higher fuel cost and the purchased power cost.

In the third quarter, operating income was $674 million, down 2.5% from $691 million in the year-ago quarter.

Financial Update

As of Sep 30, 2022, FE had cash and cash equivalents of $251 million compared with $1,462 million as of Dec 31, 2021.

Long-term debt and other long-term obligations as of Sep 30, 2022 were $20,905 million, down 6.1% from $22,248 million on Dec 31, 2021.

Net cash provided by operating activities for the first nine months of 2022 was $1,837 million compared with $2,104 million in the year-ago period.

Guidance

FirstEnergy reiterated its 2022 earnings guidance in the range of $2.30-$2.50 per share based on 571 million shares outstanding. The Zacks Consensus Estimate for 2022 earnings of $2.43 per share is marginally higher than the midpoint of the guided range. The company expects cash flow from operations to be in the range of $2.6- $3 billion for 2022. It also targets FFO/debt of nearly 13% in 2023, a year ahead of the initial target in 2024.

FirstEnergy restated its plan to invest $3.3 billion in 2022, up 15% compared with 2021, to strengthen the grid and lead a clean energy transition. It expects to invest $17 billion in the 2021-2025 period, of which $8.6 billion will be directed toward grid modernization and increasing resiliency, $1.7 billion for conservation and $6.5 billion for clean energy transition and customer-centric growth projects.

Zacks Rank

FirstEnergy currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

XEL Energy XEL is slated to report third-quarter 2022 earnings on Oct 27 before market open. The Zacks Consensus Estimate for the third-quarter EPS is pegged at $1.20.

XEL Energy’s long-term (three to five-year) earnings growth is currently pegged at 6.4%. The Zacks Consensus Estimate for XEL’s 2022 earnings implies year-over-year growth of 6.7%.

NextEra Energy NEE is slated to report third-quarter 2022 earnings on Oct 28 before market open. The Zacks Consensus Estimate for third-quarter EPS is pegged at 79 cents.

NextEra Energy’s long-term earnings growth is currently pegged at 9.7%. The Zacks Consensus Estimate for NEE’s 2022 earnings implies year-over-year growth of 13.3%.

PNM Resources PNM is slated to report third-quarter 2022 earnings on Nov 4 before market open. The Zacks Consensus Estimate for third-quarter EPS is pegged at $1.29.

PNM Resources’ long-term earnings growth is currently pegged at 4.2%. The Zacks Consensus Estimate for PNM’s 2022 earnings implies year-over-year growth of 6.1%.


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