01—Abstract
Summary
Summary of the 8-K filed April 23, 2025. Cited figures are marked; the original filing is the authoritative source.
FirstEnergy (NYSE: FE) reported first quarter 2025 GAAP earnings of $360 milliona, or $0.62 per basic and diluted share, on revenue of $3.8 billion, compared with GAAP EPS of $0.44 in 1Q24.
Core Earnings (non-GAAP) were $0.67b per share versus $0.49 a year earlier, a 37% increase driven by new base rates in Pennsylvania, West Virginia and New Jersey, rate base growth under formula rate programs, lower financing costs and normal weather compared with a mild 1Q24. Management described results as in line with plan and reaffirmed full-year 2025 Core EPS guidance of $2.40 to $2.60, with the company now targeting the upper half of that range, along with its 6-8% five-year Core EPS CAGR target for 2025-2029. Capital deployment was more than $1.0 billion in the quarter, up about 15% from 1Q24 and on pace for the $5 billion 2025 investment plan within the $28 billion Energize365 five-year program.
The company declared a dividend of $0.445c per share, about 5% higher than 2024, and expects to issue about $3.6 billion of long-term debt in 2025 with no new equity beyond employee benefit programs. Consolidated TTM earned ROE improved to 9.8%, approaching the 9.5%-10% target, and all FE entities remain investment grade. Key items to monitor include the Ohio base rate case (hearings set to begin May 5, 2025, with the requested increase raised to $183 million), expected Ohio legislation (HB15/SB2) reshaping the regulatory framework, the New Jersey EnergizeNJ settlement approved April 23, and West Virginia's Integrated Resource Plan due by year-end 2025.
Management also cited data center pipeline growth (80+ GW of large load studies) and about $3 billiond of PJM-approved transmission investments, including the Valley Link joint venture. Results were presented as forward-looking and subject to the risks of HB 6 investigations and litigation, weather, and regulatory outcomes.
02—Key points
Key Highlights
- 1Q25 GAAP EPS of $0.62 (net income $360M) vs. $0.44 in 1Q24; Core EPS of $0.67 vs. $0.49, a roughly 37% year-over-year increase
- Full-year 2025 Core EPS guidance of $2.40-$2.60 reaffirmed, with management targeting the upper half of the range
- 6-8% Core EPS CAGR target for 2025-2029 reaffirmed, supported by a $28B five-year Energize365 capital plan
- Capital investment of $1.0B+ in 1Q25, up ~15% vs. 1Q24, tracking the $5B 2025 investment plan
- Quarterly dividend declared at $0.445/share (~5% growth vs. 2024), with no new equity planned beyond employee benefit programs (up to ~$100M annually)
- Core earnings drivers: new PA, WV and NJ base rates and rate base growth, offset by FET equity dilution and higher O&M; Baseline O&M of $340M in line with plan
- Ohio base rate case hearings begin May 5, 2025 and Ohio HB15/SB2 legislation expected in May/June; NJ EnergizeNJ settlement approved April 23, 2025
03—Questions
Frequently Asked Questions
Did FirstEnergy change its 2025 earnings outlook?
No. FirstEnergy affirmed its 2025 Core EPS guidance of $2.40-$2.60 and its 6-8% Core EPS CAGR target for 2025-2029. Management also said it is now targeting the upper half of the guidance range, which is a modestly more positive tone than a simple reaffirmation.
What drove the year-over-year increase in earnings?
Core EPS rose $0.18 to $0.67 mainly from new base rates in Pennsylvania (Distribution +$0.10), New Jersey and West Virginia (Integrated +$0.10), and rate base growth in formula rate programs. Normal weather versus a mild 1Q24 also helped. These gains were partly offset by FET equity dilution (Stand-Alone Transmission -$0.04) and higher operating expenses from maintenance and deferred cost recovery.
How much is FirstEnergy investing and how will it be funded?
The company invested more than $1.0 billion in 1Q25 and is on track for its $5 billion 2025 plan, part of a $28 billion five-year program. The 2025 financing plan includes about $3.6 billion of long-term debt refinancing and issuance, for a net increase of about $2 billion, and no new common equity beyond employee benefit programs.
What regulatory events should investors watch?
The key near-term items are the Ohio base rate case, with hearings beginning May 5, 2025 after the requested increase was raised to $183 million; expected Ohio legislation (HB15/SB2) establishing a new framework with multi-year rate plans; the New Jersey EnergizeNJ settlement approved April 23, 2025; and West Virginia's Integrated Resource Plan due by the end of 2025. Ongoing HB 6 investigations and litigation remain a risk factor.
Is the GAAP vs. Core EPS gap significant?
The 1Q25 GAAP EPS of $0.62 was $0.05 below Core EPS of $0.67. The difference reflects special items, mainly $0.03 of reorganization costs and $0.03 of investigation and other related costs, partly offset by a $0.01 net pension/OPEB credit. Management notes that special items are not necessarily non-recurring and that forward-looking GAAP reconciliations are not provided, so these items could be material in future periods.
04—Continue