FE met estimates

FirstEnergy (FE) reported its first-quarter earnings on April 23. It reported adjusted earnings of $0.67 per share for the quarter, which ended on March 31. For the same quarter last year, the utility reported $0.67 per share, implying flattish growth YoY.

The company’s business mix improved when it separated FirstEnergy Solutions, the competitive segment of FE, last year. However, the bankruptcy court rejected its restructuring plan early this month. FirstEnergy’s earnings will likely stabilize and become more predictable in the longer term largely due to its increased focus on regulated operations.

Highlights from FirstEnergy’s Q1 2019 Earnings

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Investors took these developments well, and the stock returned more than 25% in 2018, notably outperforming broader utilities (XLU). So far this year, FirstEnergy stock is up about 8%.

Earnings highlights

FirstEnergy reported total revenues of $2.9 billion in Q1 2019, representing flattish growth YoY. Total distribution deliveries marginally decreased in the reported quarter compared to the same period last year. Residential sales increased 0.7%, commercial sales decreased 1.4%, and sales to industrial customers remained flat during Q1 2019 against Q1 2018. Heating degree days were 1% higher during the quarter compared to the same quarter last year.

FirstEnergy’s management has provided an EPS guidance range of $2.45 to $2.75 for 2019, which implies flattish earnings growth YoY. It reported earnings of $2.59 per share in 2018. The company expects to grow its EPS 6%–8% per year through 2021, higher than the industry average.

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