01—Abstract
Summary
Summary of the 10-Q filed April 30, 2024. Cited figures are marked; the original filing is the authoritative source.
Public Service Enterprise Group Incorporated (PSEG) reported first-quarter 2024 net income of $532 milliona, or $1.06 per diluted share, down from $1,287 million, or $2.58 per diluted share, in the first quarter of 2023.
Operating revenues fell to $2,760 millionb from $3,755 million. The filing attributes the decline primarily to mark-to-market losses at PSEG Power in 2024 compared with mark-to-market gains in 2023, along with changes in the NDT Fund. PSE&G, the regulated utility, earned $488 million in net income, roughly flat with $487 million a year earlier.
Revenue at PSE&G rose to $2,333 millionc from $2,293 million. The company reaffirmed its regulated capital program of $18 billion to $21 billion for 2024-2028, with an expected compound annual growth rate in regulated rate base of 6% to 7.5% from year-end 2023 to year-end 2028. Total capital investment is estimated at $19 billion to $22.5 billion.
Liquidity remained substantial, with $3.8 billiond of available credit under $4.0 billion of committed facilities at March 31, 2024. Long-term debt rose to $18.8 billion from $17.8 billion, reflected in $2.25 billion of new long-term debt issued during the quarter. Cash and cash equivalents increased to $1.19 billion.
The board approved a $0.60 per share quarterly dividend for the second quarter of 2024. The filing also highlights regulatory and legal exposures, including Passaic River and other environmental remediation matters, a pending FERC investigation of PSE&G, and a BPU audit of PSE&G. PSEG Power's nuclear fleet benefits from a federal production tax credit beginning in 2024, and the company reported a 96.8% nuclear capacity factor for the quarter.
02—Key points
Key Highlights
- Net income fell to $532 million ($1.06 diluted EPS) from $1,287 million ($2.58 diluted EPS), driven mainly by PSEG Power mark-to-market losses of $(186) million after tax versus $555 million of gains a year earlier.
- PSE&G net income was $488 million, essentially flat versus $487 million, with operating revenues up $40 million to $2,333 million.
- Regulated capital investment program of $18 billion to $21 billion for 2024-2028, with expected rate base compound annual growth of 6% to 7.5%.
- PSE&G filed a distribution base rate case in December 2023 proposing an overall revenue increase of 9%, with a 12% increase for the combined typical residential electric and gas customer; conclusion is expected later in 2024.
- Debt issuance included $750 million of 5.20% Senior Notes due 2029 and $500 million of 5.45% Senior Notes due 2034 at PSEG, plus PSE&G secured medium-term notes totaling $1.0 billion.
- Available liquidity of $3.8 billion under $4.0 billion of committed credit facilities at March 31, 2024; PSEG Power's potential additional collateral if downgraded to below investment grade was approximately $690 million.
- Federal production tax credit for existing nuclear plants began January 1, 2024, and PSEG Power's nuclear units operated at a 96.8% capacity factor during the quarter.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed April 30, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $2.76B$3.75B | −26.5% |
| Operating Expenses | $2.08B$2.11B | −1.5% |
| Operating Income | $685.00M$1.65B | −58.4% |
| Interest Expense | $205.00M$180.00M | +13.9% |
| Net Income | $532.00M$1.29B | −58.7% |
| EPS (Basic) | $1.07$2.59 | −58.7% |
| EPS (Diluted) | $1.06$2.58 | −58.9% |
| Shares Outstanding (Basic) | 499.00M497.00M | +0.4% |
| Shares Outstanding (Diluted) | 500.00M500.00M | 0.0% |
05—Questions
Frequently Asked Questions
Why did PSEG's net income decline so sharply in the first quarter of 2024?
The filing attributes the decline primarily to PSEG Power's non-trading mark-to-market activity, which produced after-tax losses of $(186) million in 2024 compared with gains of $555 million in 2023. Operating revenues at PSEG Power & Other fell $1,155 million, largely from these MTM swings, while PSE&G's earnings were essentially flat.
How is PSE&G performing relative to the rest of the business?
PSE&G reported net income of $488 million for the first quarter of 2024 versus $487 million a year earlier. Its operating revenues rose $40 million to $2,333 million, driven by higher delivery revenues including transmission revenues up $33 million, and its interest expense increased $25 million on 2023 debt issuances.
What is the company's capital investment outlook?
For 2024 through 2028, the regulated capital investment program is estimated at $18 billion to $21 billion, within a total capital program of $19 billion to $22.5 billion. Management expects a 6% to 7.5% compound annual growth rate in regulated rate base from year-end 2023 to year-end 2028.
Is PSEG maintaining its dividend and liquidity position?
The board approved a $0.60 per share common stock dividend for the second quarter of 2024, an indicative annual rate of $2.40 per share. At March 31, 2024, total available liquidity was $3.8 billion, and management stated that its liquidity was expected to be sufficient to meet projected stressed requirements over a 12-month horizon.
What significant regulatory or legal risks does the filing disclose?
The filing discloses a pending FERC non-public investigation of PSE&G related to the Roseland-Pleasant Valley transmission project, a BPU comprehensive audit of PSE&G, and multiple environmental matters including the Lower Passaic River Superfund site, where PSEG has accrued approximately $66 million. Management states that penalties or liabilities from some of these matters could be material.
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