10-QPeriod: Q3 FY2019

FIRSTENERGY CORP Quarterly Report for Q3 Ended Sep 30, 2019

Filed November 4, 2019For Securities:FE

Summary

FirstEnergy Corp. reported net income attributable to common stockholders of $1,016 million for the nine months ended September 30, 2019, a decrease from $853 million in the same period of the prior year. This was primarily driven by lower revenues and higher operating expenses, as well as the impact of discontinued operations. For the third quarter of 2019, net income attributable to common stockholders was $391 million, an improvement from a net loss of $(512) million in the prior year's third quarter, largely due to the absence of significant charges related to discontinued operations in the current period. The company continues its strategy to transition to a fully regulated utility, focusing on its Regulated Distribution and Regulated Transmission segments. Significant investments are planned for transmission infrastructure through the "Energizing the Future" initiative, aiming to improve reliability and security. While the company has strengthened its balance sheet through equity issuances, it faces ongoing regulatory and environmental matters that could impact future results.

Financial Statements
Beta
Revenue$2.96B
Operating Expenses$2.28B
Operating Income$681.00M
Interest Expense$261.00M
Net Income$391.00M
EPS (Basic)$0.73
EPS (Diluted)$0.72
Shares Outstanding (Basic)538.00M
Shares Outstanding (Diluted)542.00M

Key Highlights

  • 1Net income attributable to common stockholders for the nine months ended September 30, 2019, was $1,016 million, down from $853 million in the prior year.
  • 2Third quarter 2019 net income attributable to common stockholders was $391 million, a significant improvement from a net loss of $(512) million in the prior year's third quarter.
  • 3Total revenues decreased by 2% for the nine months and 3% for the third quarter compared to the prior year periods.
  • 4Operating expenses decreased by 1% for the nine months but increased slightly for the third quarter compared to the prior year periods.
  • 5The company is progressing with its "Energizing the Future" transmission plan, with significant capital investments planned to enhance reliability and infrastructure.
  • 6FirstEnergy's strategic shift towards becoming a fully regulated utility continues, with a focus on its Regulated Distribution and Transmission segments.
  • 7The company's balance sheet was strengthened by a significant equity issuance in early 2018, with no further equity issuances anticipated through at least 2021.

Frequently Asked Questions

For the nine months ended September 30, 2019, FirstEnergy reported a net income attributable to common stockholders of $1,016 million, a decrease from $853 million in the same period of 2018. The third quarter of 2019 showed a net income attributable to common stockholders of $391 million, a substantial improvement from a net loss of $(512) million in the third quarter of 2018, primarily due to the resolution of discontinued operations.

FirstEnergy's primary business segments are Regulated Distribution and Regulated Transmission. The company's strategic focus is to operate as a fully regulated utility, emphasizing stable and predictable earnings and cash flow from these segments, supported by investments in infrastructure and customer service enhancements.

Key developments include the continued execution of the "Energizing the Future" transmission investment plan, ongoing efforts to transition to a fully regulated utility model, and the strengthening of the balance sheet through prior equity issuances. The company also continues to navigate various regulatory matters across its operating states and managed the impact of discontinued operations.

FirstEnergy strengthened its balance sheet with a significant equity issuance in early 2018. As of September 30, 2019, there were no preferred shares outstanding, as they had all been converted into common stock. The company also actively managed its debt through issuances and repayments to optimize its capital structure.