Summary
FirstEnergy Corp. reported third-quarter 2012 earnings available to common shareholders of $425 million, or $1.02 per basic share, a decrease from $532 million, or $1.27 per basic share, in the third quarter of 2011. For the first nine months of 2012, earnings were $918 million, or $2.20 per basic share, up from $787 million, or $2.01 per basic share, in the same period of 2011. The company is implementing cost-saving measures, including workforce reductions and operational changes at power plants, to offset economic challenges. Significant operational events during the quarter included the deactivation of several coal-fired power plants and plans to expand used nuclear fuel storage capacity. The company also faced substantial costs due to Hurricane Sandy, with recovery expected to be largely deferred for customer recovery. Financially, FirstEnergy maintained strong liquidity with approximately $4 billion in available liquidity as of September 30, 2012. However, the competitive energy services segment experienced a significant decrease in net income due to lower wholesale power prices and capacity prices. Looking ahead to 2013, the company anticipates positive drivers from higher distribution throughput and reduced operating costs, but anticipates headwinds from lower competitive energy services margins and reduced transmission revenues. The company is actively managing its regulatory environment across multiple states, with ongoing rate case filings, securitization approvals, and compliance with environmental regulations.
Financial Highlights
45 data points| Revenue | $4.05B |
| Operating Expenses | $3.15B |
| Operating Income | $902.00M |
| Interest Expense | $230.00M |
| Net Income | $425.00M |
| EPS (Basic) | $1.02 |
| EPS (Diluted) | $1.01 |
| Shares Outstanding (Basic) | 417.00M |
| Shares Outstanding (Diluted) | 419.00M |
Key Highlights
- 1Third-quarter 2012 earnings per share decreased to $1.02 from $1.27 in the prior year's quarter, while nine-month earnings per share increased to $2.20 from $2.01.
- 2FirstEnergy is undertaking cost reduction initiatives, including workforce reductions and operational adjustments at power plants, to mitigate the impact of economic conditions.
- 3Several coal-fired power plants were deactivated during the quarter due to environmental regulations and market conditions, with plans to convert some to synchronous condensers for transmission reliability.
- 4Hurricane Sandy caused significant damage, with estimated storm costs exceeding $500 million, largely expected to be capitalized or deferred for customer recovery.
- 5The Competitive Energy Services segment saw a substantial drop in net income, primarily due to lower wholesale power and capacity prices.
- 6The company maintained a strong liquidity position with approximately $4 billion in available liquidity as of September 30, 2012.
- 7FirstEnergy is involved in various regulatory and legal matters across multiple states, including rate case filings, environmental compliance, and transmission cost allocation debates.