FE — FirstEnergy Corp.

FirstEnergy Corp. Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• GAAP Earnings: $0.70 per share, up from $0.62 in Q1 2025.
• Core Earnings: $0.72 per share, a 7.5% increase from $0.67 in Q1 2025.
• Return on Equity: 9.8% on a trailing 12-month basis.
• Capital Investments: $1.4 billion in Q1, a 33% increase year-over-year, primarily in formula rate investment programs.
• Operational Efficiency: Base O&M expenses reduced by 15% since 2022, with a 5% decrease in Q1 2026.

2. Strategic Updates and Business Highlights

• Leadership Changes: Appointment of Chris Beam as President of West Virginia and Maryland, and Dan Puskas as Chief Information Officer.
• Investment Focus: Continued investment in electric system reliability, resiliency, and customer experience, particularly in Pennsylvania and West Virginia.
• Affordability Initiatives: Rates are 20% below in-state peers, with ongoing discussions with regulators to address affordability concerns amid rising demand and supply imbalances.
• Generation Projects: Proposed 1.2-gigawatt natural gas facility in West Virginia, with significant data center demand driving potential growth.

3. Forward Guidance and Outlook

• Earnings Guidance: Reaffirmed core earnings guidance of $2.62 to $2.82 per share for 2026, with expected growth in the second half of the year.
• Long-term Growth: Targeting a core earnings CAGR of 6% to 8% through 2030, aiming for the higher end of this range.
• Capital Investment Plan: $6 billion for the year, with a focus on customer-centric projects.

4. Bad News, Challenges, or Points of Concern

• Affordability Issues: Rising costs and regulatory scrutiny in Pennsylvania and New Jersey could impact future rate cases and investment strategies.
• Capacity Market Concerns: Ongoing discussions about the PJM capacity market structure and its implications for customer costs, with potential risks if the backstop procurement auction does not yield favorable results.
• Regulatory Environment: Uncertainty in regulatory processes, particularly in Maryland and Pennsylvania, could affect future rate case filings and investment approvals.

5. Notable Q&A Insights

• West Virginia Generation: Anticipated approval for the new gas facility in the second half of 2026, with potential rate base growth from this investment.
• Political Landscape: Engagement with state governors and regulators is critical to navigate affordability concerns and ensure alignment on investment strategies.
• Cost Management: Ongoing cost-cutting measures are seen as sustainable, driven by a shift to data-driven decision-making and operational efficiencies.
• Future Rate Cases: Plans for rate cases in Pennsylvania and New Jersey are being approached cautiously, with a focus on transparency and stakeholder engagement to mitigate surprises.

Overall, FirstEnergy is positioned for growth through strategic investments and operational efficiencies, but faces challenges related to affordability and regulatory dynamics that could impact future performance.