Summary
FirstEnergy Corp. reported net income available to common shareholders of $50 million, or $0.15 per diluted share, for the first quarter of 2011. This represents a significant decrease from the $155 million, or $0.51 per diluted share, reported in the first quarter of 2010. The primary driver for this decline was the recognition of approximately $82 million in merger transaction costs and $75 million in merger integration costs related to the acquisition of Allegheny Energy, Inc., which closed on February 25, 2011. The merger created a larger, more diversified energy company, but the immediate financial impact was substantial. Operationally, revenues increased year-over-year, driven by higher distribution deliveries and growth in direct and government aggregation sales. However, this was offset by decreased generation revenues, particularly in the Regulated Distribution segment, due to increased customer shopping and lower wholesale market conditions. Expenses were also impacted by higher transmission expenses, an inventory valuation adjustment, and impairments on non-core assets, further pressuring earnings. Despite these headwinds, the company maintains a strong liquidity position with $1.1 billion in cash and cash equivalents.
Financial Highlights
46 data points| Operating Expenses | $3.23B |
| Operating Income | $350.00M |
| Net Income | $52.00M |
| EPS (Basic) | $0.15 |
| EPS (Diluted) | $0.15 |
| Shares Outstanding (Basic) | 342.00M |
| Shares Outstanding (Diluted) | 343.00M |
Key Highlights
- 1FirstEnergy Corp. reported a significant year-over-year decrease in net income, with earnings per diluted share falling to $0.15 in Q1 2011 from $0.51 in Q1 2010.
- 2The company completed its merger with Allegheny Energy, Inc. on February 25, 2011, which resulted in substantial merger-related costs impacting the current quarter's results.
- 3Total revenues increased due to higher distribution deliveries and growth in competitive energy services, but was offset by lower generation revenues in regulated segments due to increased customer shopping.
- 4Expenses were negatively impacted by increased transmission expenses, an inventory valuation adjustment, and non-core asset impairments.
- 5The company's liquidity remains strong, with $1.1 billion in cash and cash equivalents at the end of the quarter.
- 6FirstEnergy has reorganized its operating segments post-merger into Regulated Distribution, Regulated Independent Transmission, and Competitive Energy Services.