FirstEnergy (FE) Q3 Earnings call transcript Oct 30, 2024

In the latest earnings call for the third quarter of 2024, FirstEnergy Corp. outlined its financial performance and strategic updates, highlighting a mix of challenges and achievements. The call, led by CEO Brian Tierney and CFO Jon Taylor, provided insights into the company's operational efficiency, regulatory developments, and future plans. Financial Performance For the third quarter of 2024, FirstEnergy reported GAAP earnings from continuing operations of $0.73 per share, down slightly from the same period in 2023. Operating earnings, however, rose to $0.85 per share, reflecting higher distribution sales, new base rates, and strategic investments. The company faced headwinds, including significant storm expenses and the absence of state tax benefits, but managed to maintain financial discipline and achieve earnings within its guidance range. Strategic Updates FirstEnergy also provided updates on its strategic initiatives, including the narrowing of its operating earnings range and the reaffirmation of its 5-year CapEx plan and long-term growth rate. The company has been proactive in managing financial headwinds through cost savings and increased capital investments, totaling $3.1 billion in the first nine months of 2024. Investment and Expansion One of the key strategic updates was the enhancement of its 2024 investment plan, increasing it from $4.3 billion to $4.6 billion, with over 70% in formula rate investments. This reflects increased reliability investments in the distribution and stand-alone transmission businesses, as well as participation in PJM's 2024 regional transmission expansion plan. The company's joint development agreement with Dominion Energy Virginia and American Electric Power is expected to facilitate the execution of transmission projects across multiple states, further enhancing its capabilities and leveraging each company's strengths. Operational and Human Resources From an operational standpoint, FirstEnergy has seen great results from its new business unit structure. The appointment of Karen McClendon as Senior Vice President and Chief Human Resources Officer is a strategic move to integrate and advance the company's human capital strategy, ensuring alignment with its vision. McClendon's extensive human resources experience, most recently at Paychex, will be instrumental in talent management, benefits and compensation, labor and employee relations, and promoting an inclusive workforce. Regulatory Developments The call also touched on regulatory developments, with the company submitting multiple portfolios of solutions to PJM's competitive planning process, totaling $3.8 billion in investment. FirstEnergy's individual projects outside the joint development agreement were also submitted to PJM for consideration. The selection of recommended projects is expected by the end of the year, with final approval in late February. Overall, FirstEnergy's third quarter earnings call provided a comprehensive overview of the company's financial performance, strategic initiatives, and operational updates. The company's ability to navigate financial headwinds while making strategic investments and enhancing its leadership team signals a commitment to delivering sustainable value to its customers, communities, and shareholders. The upcoming selection of recommended projects from PJM and the execution of transmission projects with Dominion Energy Virginia and American Electric Power are expected to further strengthen FirstEnergy's position in the industry.