Summary
FirstEnergy Corp. (FE) reported a net income of $396 million for the third quarter of 2017, a slight increase from $380 million in the same period of 2016, with earnings per share remaining steady at $0.89. For the first nine months of 2017, net income was $775 million, a significant improvement from a net loss of $381 million in the prior year's comparable period, primarily driven by lower asset impairment and plant exit costs. The company continues its strategic shift towards becoming a fully regulated utility, signaling an exit from competitive energy services (CES) operations by mid-2018. This involves the planned sale of certain competitive generation assets, which resulted in a non-cash impairment charge of $158 million in the first nine months of 2017. The regulated distribution and transmission segments are performing steadily, with planned investments in transmission infrastructure through the 'Energizing the Future' plan. However, significant financial challenges and "substantial doubt about FES' ability to meet its obligations as they come due over the next twelve months" are noted, potentially requiring debt restructuring or bankruptcy protection for FES and its nuclear subsidiary.
Financial Highlights
45 data points| Revenue | $2.91B |
| Operating Expenses | $2.18B |
| Operating Income | $733.00M |
| Interest Expense | $262.00M |
| Net Income | $396.00M |
| EPS (Basic) | $0.89 |
| EPS (Diluted) | $0.89 |
| Shares Outstanding (Basic) | 444.00M |
| Shares Outstanding (Diluted) | 446.00M |
Key Highlights
- 1Net income for Q3 2017 was $396 million, or $0.89 per share, compared to $380 million, or $0.89 per share, in Q3 2016.
- 2First nine months of 2017 net income was $775 million, a significant turnaround from a net loss of $381 million in the same period of 2016, largely due to reduced impairment charges.
- 3FirstEnergy is executing a strategic review to exit competitive energy services (CES) by mid-2018, including planned asset sales.
- 4CES recorded $158 million in non-cash pre-tax impairment charges in the first nine months of 2017 related to asset sales.
- 5Regulated Transmission segment revenues increased due to higher rate bases at ATSI, JCP&L, and TrAIL, with ongoing investments in the 'Energizing the Future' transmission plan.
- 6Regulated Distribution segment results improved due to new rates in Ohio, Pennsylvania, and New Jersey, partially offset by lower weather-related usage and higher customer shopping.
- 7FirstEnergy Solutions Corp. (FES) faces significant liquidity challenges, with substantial doubt raised about its ability to continue as a going concern, potentially leading to debt restructuring or bankruptcy.