10-QPeriod: Q1 FY2023

FIRSTENERGY CORP Quarterly Report for Q1 Ended Mar 31, 2023

Filed April 27, 2023For Securities:FE

Summary

FirstEnergy Corp. reported solid financial results for the first quarter of 2023, with total revenues increasing by 8% to $3.23 billion and net income attributable to FE rising slightly by 1% to $292 million, or $0.51 per diluted share, compared to the same period in 2022. This performance was driven by higher revenues in the Regulated Distribution segment, bolstered by increased capital investment programs and higher non-shopping customer participation. The company also made progress on strategic initiatives, including filings for rate case adjustments in Maryland and New Jersey, and the ongoing consolidation of its Pennsylvania operations expected by early 2024. Financially, FirstEnergy maintained a healthy liquidity position, with $3.92 billion in available liquidity. The company continues to focus on its long-term strategy, "Energizing the Future," with significant planned investments in its Regulated Distribution and Transmission segments aimed at improving grid reliability, enabling the clean energy transition, and modernizing infrastructure. The company also highlighted its commitment to environmental sustainability with a goal of carbon neutrality by 2050.

Financial Highlights

47 data points
Beta

Revenue

$3.23B

Net Income

$292.00M

9.0% Net Margin

EPS (Diluted)

$0.51

Total Assets

$46.48B

Cash & Equivalents

$177.00M

Free Cash Flow

-$112.00M

Financial Statements
Beta
Revenue$3.23B
Operating Expenses$2.68B
Operating Income$551.00M
Interest Expense$263.00M
Net Income$292.00M
EPS (Basic)$0.51
EPS (Diluted)$0.51
Shares Outstanding (Basic)572.00M
Shares Outstanding (Diluted)573.00M

Key Highlights

  • 1Total revenues increased 8% to $3.23 billion for Q1 2023, driven by growth in the Regulated Distribution segment.
  • 2Net income attributable to FirstEnergy Corp. was $292 million, or $0.51 per diluted share, a slight increase from $288 million in Q1 2022.
  • 3The company continues to execute its "Energizing the Future" strategy, with significant planned capital investments in Regulated Distribution and Transmission segments.
  • 4FirstEnergy is progressing with its strategic Pennsylvania companies' consolidation, aiming for completion by early 2024, and has made regulatory filings for rate case adjustments in Maryland and New Jersey.
  • 5Strong liquidity position maintained with $3.92 billion in available liquidity as of April 24, 2023.
  • 6The company reaffirmed its commitment to environmental sustainability, targeting carbon neutrality by 2050 with interim GHG reduction goals.
  • 7Announced the appointment of Brian X. Tierney as President and CEO, effective June 1, 2023.

Frequently Asked Questions

FirstEnergy's total revenues increased by 8% to $3.23 billion in the first quarter of 2023. This growth was primarily driven by higher revenues in the Regulated Distribution segment, attributed to increased capital investment programs, higher weather-adjusted customer usage and demand, and a decrease in customer shopping in certain regions (New Jersey and Ohio), leading to higher non-shopping generation auction rates.

FirstEnergy is actively proceeding with the consolidation of its Pennsylvania companies into a single entity, FE PA, expected to close by early 2024, which aims to improve regulatory and administrative efficiencies. The company also anticipates the closing of the sale of an incremental 30% equity interest in FirstEnergy Transmission, LLC (FET) to Brookfield by early 2024, which will increase Brookfield's interest to 49.9%. These strategic transactions are subject to regulatory approvals.

FirstEnergy is focused on stable and predictable earnings through its Regulated Distribution and Transmission businesses. The company plans to invest over $9 billion in its Regulated Distribution segment and $8 billion in its Regulated Transmission segment between 2021 and 2025, focusing on improving reliability, modernizing infrastructure, enabling the clean energy transition, and enhancing customer service. Several regulatory filings are in progress or planned to support these investments.

FirstEnergy is involved in several ongoing legal and regulatory matters, including investigations related to HB 6, securities litigation, and regulatory proceedings in various states. While the company has taken steps to address these issues, including a settlement with the U.S. Attorney's Office and corporate governance enhancements, the outcomes are uncertain and could potentially have a material adverse effect on the company's reputation, financial condition, and results of operations. The company also expects to be subject to the corporate AMT in 2023 due to the Inflation Reduction Act.