FirstEnergy Announces Second Quarter 2024 Financial Results

Reports second quarter 2024 GAAP earnings of $0.08 per share and operating (non-GAAP) earnings of $0.56 per share, above the midpoint of guidance and a 19% increase compared to the second quarter of 2023

Affirms targeted 6-8% long-term annual operating earnings per share growth and full-year 2024 operating (non-GAAP) earnings guidance of $2.61 to $2.81 per share

Received and deployed final $1.2 billion in proceeds from $3.5 billion FET LLC transaction, strengthening balance sheet and fueling Energize365 investment plan

Results include progress in settling legacy issues with the Securities and Exchange Commission (SEC) and the Office of the Ohio Attorney General

AKRON, Ohio, July 30, 2024 /PRNewswire/ — FirstEnergy Corp. (NYSE:FE) today reported second quarter 2024 GAAP earnings of $45 million, or $0.08 per basic and diluted share, on revenue of $3.3 billion. This compares to second quarter 2023 GAAP earnings of $235 million, or $0.41 per basic and diluted share, on revenue of $3.0 billion. GAAP results for the second quarter of 2024 include an increase in asset retirement obligations associated with new environmental regulations and future expected remediation costs for retired generation facilities, debt redemption costs, and legal costs and charges connected to anticipated resolution of certain HB-6 related matters, partially offset by the receipt of insurance proceeds associated with the shareholder derivative lawsuit. GAAP results for both periods also include the impact of other special items listed below.

Operating (non-GAAP) earnings for the second quarter of 2024 were $0.56 per share, above the midpoint of the company’s guidance. In the second quarter of 2023, operating (non-GAAP) earnings were $0.47 per share. 

“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. “In addition, we’re achieving meaningful milestones in our journey to become a premier electric company. Earlier this year, we introduced a robust capital investment program that is supported by a transformed balance sheet. We’ve achieved constructive regulatory outcomes, and we’ve structured our operations to improve the customer experience and reliability. In addition, we reached an agreement in principle with SEC staff, which remains subject to the SEC’s approval, and we are close to resolving legacy issues with the Ohio Attorney General’s office. 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.”

FirstEnergy provided a third quarter earnings guidance range of $490 million to $547 million, or $0.85 to $0.95 per share. The company also affirmed its 2024 operating (non-GAAP) earnings guidance range of $2.61 to $2.81 per share, and its long-term, 6% to 8% targeted annual operating earnings growth rate, which is based off the previous year’s operating earnings guidance midpoint and supported by the company’s refreshed and extended $26 billion, five-year capital investment plan, Energize365.

Second Quarter Results

Second quarter 2024 results increased $0.09 per share, or 19%, resulting from the company’s Energize365 investment plan, including rate base growth in distribution and transmission formula rate programs, higher distribution sales and constructive regulatory outcomes in multiple jurisdictions. These drivers were partially offset by higher planned operating expenses and net financing costs.

On a weather-adjusted basis, total distribution deliveries increased 3% compared to the second quarter of 2023. Weather-adjusted usage increased 4% and 7% among residential and commercial customers, respectively.

Earlier this year, the company introduced new segment reporting to enhance transparency and align with its operating structure. Segment results for 2023 have been recast for comparative purposes.

Second quarter operating earnings in the Distribution segment decreased $0.02 per share compared to the second quarter of 2023 as higher revenues from rate base growth in formula rate investment programs and higher distribution customer demand were offset primarily by higher planned operating expenses in the second quarter of 2024.

In the Integrated segment, second quarter operating earnings increased $0.09 per share compared to the second quarter of 2023, primarily due to the impact of base rate adjustments, rate base growth in formula rate investment programs, and higher distribution customer demand. These items were partially offset, in part, by a higher effective income tax rate.

In the Stand-Alone Transmission segment, second quarter 2024 operating earnings decreased $0.04 per share. Results benefited from rate base growth in formula rate investment programs, however this was more than offset by the dilutive effect of the 30% interest sale in FirstEnergy Transmission, LLC, which closed on March 25.

Second quarter 2024 operating results improved in Corporate/Other by $0.06 per share due to lower interest costs from lower average debt levels, partially offset by lower earnings from the company’s legacy investment in the Signal Peak coal mine.

First Half Results

For the first half of 2024, FirstEnergy reported GAAP earnings of $298 million, or $0.52 per basic and diluted share, on revenue of $6.6 billion. This compares to GAAP earnings of $527 million, or $0.92 per basic and diluted share, on revenue of $6.2 billion in the first half of 2023. GAAP results for both periods reflect the impact of special items listed below.

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.

Operating results for the first half of 2024 reflect continued growth from the company’s regulated investment strategy and favorable distribution sales compared to the first half of 2023. These factors offset the impact of higher planned operating expenses and financing costs.