10-QPeriod: Q3 FY2022

FIRSTENERGY CORP Quarterly Report for Q3 Ended Sep 30, 2022

Filed October 25, 2022For Securities:FE

Summary

FirstEnergy Corp. reported mixed financial results for the nine months ended September 30, 2022. Total revenues increased by 10% to $9.28 billion compared to the prior year, driven by growth in both Regulated Distribution and Regulated Transmission segments. However, net income attributable to FE decreased by 5% to $809 million, largely due to higher operating expenses, including increased fuel and purchased power costs, and the absence of a significant gain on the sale of Yards Creek in the prior year. The company also incurred substantial debt redemption costs and faced increased interest expenses. Operationally, FirstEnergy is focusing on investments in grid modernization, clean energy transition, and infrastructure upgrades within its regulated segments. The company has made significant progress on its "FE Forward" initiative, aimed at generating capital expenditure efficiencies and working capital improvements. Despite ongoing legal and regulatory matters, including investigations related to HB 6, FirstEnergy is working to strengthen its compliance culture and address these challenges. The company reaffirmed its commitment to carbon neutrality by 2050 and continues to invest in renewable energy and sustainable practices.

Financial Statements
Beta
Revenue$3.48B
Operating Expenses$2.97B
Operating Income$505.00M
Interest Expense$248.00M
Net Income$334.00M
EPS (Basic)$0.58
EPS (Diluted)$0.58
Shares Outstanding (Basic)571.00M
Shares Outstanding (Diluted)572.00M

Key Highlights

  • 1FirstEnergy's total revenues increased by 10% to $9.28 billion for the nine months ended September 30, 2022, compared to $8.47 billion in the same period of 2021.
  • 2Net income attributable to FirstEnergy Corp. decreased by 5% to $809 million for the nine months ended September 30, 2022, compared to $856 million in the prior year.
  • 3Operating income for the nine months remained relatively flat at $1.51 billion, indicating pressure from increased operating expenses.
  • 4The company experienced a significant increase in operating expenses, up 11% to $7.77 billion for the nine months ended September 30, 2022, driven by higher fuel and purchased power costs.
  • 5FirstEnergy made substantial progress on its "FE Forward" initiative, projecting significant capital expenditure efficiencies and working capital improvements.
  • 6The company continues to invest in its regulated distribution and transmission businesses, highlighting investments in grid modernization and clean energy infrastructure.
  • 7FirstEnergy is actively addressing legal and regulatory matters, including the HB 6 investigations, with a focus on enhancing its compliance and governance framework.

Frequently Asked Questions

FirstEnergy reported a 10% increase in total revenues for the nine months ended September 30, 2022, reaching $9.28 billion, up from $8.47 billion in the same period of 2021. This growth was primarily driven by its Regulated Distribution and Regulated Transmission segments.

Net income attributable to FirstEnergy Corp. decreased by 5% to $809 million for the first nine months of 2022, down from $856 million in the corresponding period of 2021. This decline was mainly due to increased operating expenses, including higher fuel and purchased power costs, and debt redemption expenses.

FirstEnergy is focused on investing in its Regulated Distribution and Regulated Transmission segments, emphasizing grid modernization, clean energy integration, and infrastructure resilience. The company is also advancing its "FE Forward" initiative to achieve operational efficiencies and improve working capital, and has committed to achieving carbon neutrality by 2050.

FirstEnergy is involved in ongoing legal and regulatory matters, most notably the investigations related to HB 6. The company has entered into a Deferred Prosecution Agreement (DPA) with the U.S. Attorney's Office and is also facing SEC investigations and various shareholder and customer lawsuits. FirstEnergy is actively working to enhance its compliance culture and corporate governance to address these issues.