On July 30, 2024, FirstEnergy Corp (FE, Financial) released its 8-K filing detailing its second quarter 2024 financial results. FirstEnergy, an investor-owned holding company with 10 regulated distribution utilities across six mid-Atlantic and Midwestern states, also owns and operates one of the nation's largest electric transmission systems.
Performance and Challenges
FirstEnergy Corp (FE, Financial) reported second quarter 2024 GAAP earnings of $45 million, or $0.08 per share, on revenue of $3.3 billion. This represents a significant decline from the second quarter of 2023, where GAAP earnings were $235 million, or $0.41 per share, on revenue of $3.0 billion. The decrease in GAAP earnings is attributed to increased asset retirement obligations, debt redemption costs, and legal costs related to resolving certain HB-6 matters.
However, the company's operating (non-GAAP) earnings for the second quarter of 2024 were $0.56 per share, surpassing the midpoint of its guidance and reflecting a 19% increase compared to the second quarter of 2023. This performance underscores the strength of FirstEnergy's regulated investment strategies.
Financial Achievements
FirstEnergy's financial achievements include the deployment of the final $1.2 billion in proceeds from the $3.5 billion FET LLC transaction, which has strengthened its balance sheet and fueled the Energize365 investment plan. The company also affirmed its full-year 2024 operating (non-GAAP) earnings guidance of $2.61 to $2.81 per share and its long-term annual operating earnings growth target of 6-8%.
“Our second quarter financial results are in line with our expectations, reflecting the strength of our regulated investment strategies,” said Brian X. Tierney, President and Chief Executive Officer. “We are proud of the progress we’ve made and are committed to driving results through a culture focused on performance excellence and continuous improvement.”
Income Statement Highlights
For the second quarter of 2024, FirstEnergy reported:
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| GAAP Earnings | $45 million | $235 million |
| GAAP EPS | $0.08 | $0.41 |
| Revenue | $3.3 billion | $3.0 billion |
| Operating (Non-GAAP) EPS | $0.56 | $0.47 |
Segment Performance
FirstEnergy introduced new segment reporting to enhance transparency. The Distribution segment saw a slight decrease in operating earnings due to higher planned operating expenses. The Integrated segment experienced an increase in operating earnings driven by base rate adjustments and higher customer demand. The Stand-Alone Transmission segment faced a decrease in operating earnings due to the dilutive effect of the 30% interest sale in FirstEnergy Transmission, LLC.
First Half 2024 Results
For the first half of 2024, FirstEnergy reported GAAP earnings of $298 million, or $0.52 per share, on revenue of $6.6 billion, compared to GAAP earnings of $527 million, or $0.92 per share, on revenue of $6.2 billion in the first half of 2023. Operating (non-GAAP) earnings for the first half of 2024 were $1.11 per share, compared to $1.06 per share in the first half of 2023.
Analysis
FirstEnergy's performance in the second quarter of 2024 highlights the company's ability to navigate financial challenges while maintaining strong operational results. The increase in operating (non-GAAP) earnings per share indicates effective cost management and strategic investments. However, the decline in GAAP earnings underscores the impact of regulatory and legal challenges. Investors should monitor the company's progress in resolving these issues and its ability to sustain growth through its Energize365 investment plan.
For more detailed information, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from FirstEnergy Corp for further details.
