10-QPeriod: Q3 FY2009

FIRSTENERGY CORP Quarterly Report for Q3 Ended Sep 30, 2009

Filed November 9, 2009For Securities:FE

Summary

FirstEnergy Corp. reported a decrease in net income for the third quarter and the first nine months of 2009 compared to the same periods in 2008. The company experienced lower revenues across its segments, primarily due to decreased electricity deliveries stemming from economic conditions and milder weather. Despite cost-saving measures, including organizational restructuring and reduced operating expenses, the company's financial performance was impacted by these revenue declines and, in the third quarter, by significant debt redemption costs. However, the company did receive a credit rating upgrade from Moody's for its regulated utilities, indicating improved financial standing. FirstEnergy also continues to navigate complex regulatory environments in Ohio and Pennsylvania, with ongoing developments in energy efficiency programs and competitive procurement processes that may impact future costs and customer rates.

Financial Highlights

45 data points
Beta

Revenue

$3.41B

Net Income

$234.00M

6.9% Net Margin

EPS (Diluted)

$0.77

Total Assets

$34.67B

Cash & Equivalents

$838.00M

Free Cash Flow

$362.00M

Financial Statements
Beta
Revenue$3.41B
Operating Expenses$2.92B
Operating Income$487.00M
Net Income$234.00M
EPS (Basic)$0.77
EPS (Diluted)$0.77
Shares Outstanding (Basic)304.00M
Shares Outstanding (Diluted)306.00M

Key Highlights

  • 1Net income decreased in Q3 2009 to $234 million ($0.77/share) from $471 million ($1.55/share) in Q3 2008.
  • 2Nine-month net income decreased to $768 million ($2.52/share) from $1.01 billion ($3.32/share) in the prior year.
  • 3Third-quarter revenues declined due to lower electricity deliveries, driven by economic conditions and milder weather.
  • 4Significant debt redemption costs in Q3 2009 negatively impacted earnings by approximately $0.30 per share.
  • 5Moody's upgraded the senior secured debt ratings of FirstEnergy's seven regulated utilities in August 2009, indicating improved financial health.
  • 6FirstEnergy is actively involved in regulatory proceedings in Ohio and Pennsylvania concerning energy efficiency programs and competitive generation procurement.
  • 7The company is exploring the consolidation of its transmission assets and operations into PJM.

Frequently Asked Questions

The primary drivers for the decrease in net income were lower revenues, primarily due to decreased electricity deliveries from economic conditions and milder weather, coupled with significant debt redemption costs incurred in the third quarter of 2009.

Moody's Investor Service upgraded the senior secured debt ratings of FirstEnergy's seven regulated utilities in August 2009, which is a positive indicator of financial stability and market confidence.

FirstEnergy has implemented various cost-saving measures, including employee severances, wage reductions, changes to employee and retiree benefits, reduced overtime, and the use of fewer contractors to mitigate the impact of lower electricity demand.

FirstEnergy is actively engaged with regulatory bodies in Ohio and Pennsylvania regarding energy efficiency programs and competitive generation procurement processes. The outcome of these regulatory proceedings may impact future costs and customer rates. Additionally, the company is pursuing the consolidation of its transmission assets into PJM.