FirstEnergy Q1 Earnings Call Highlights

Key Points

• Q1 results: FirstEnergy reported GAAP EPS of $0.70 and Core EPS of $0.72 (up 7.5% YoY), and reaffirmed 2026 guidance of $2.62–$2.82 per share while targeting a long-term Core Earnings CAGR of 6%–8% through 2030.
• Management pointed to execution on regulated investment as the driver of growth — $1.4 billion invested in Q1 (up 33% YoY), transmission rate base rising (19% at integrated businesses, 11% at stand‑alone transmission) — and said base O&M fell about 5% with the savings characterized as sustainable.
• Credit and strategic updates: Moody’s raised its outlook to positive, an $850 million debt offering was more than five times oversubscribed, and FirstEnergy expects regulatory approval in H2 for a ~1.2 GW West Virginia combined‑cycle plant (~$2.5 billion cost, up to ~35% equity) amid growing data‑center load opportunities.

FirstEnergy NYSE: FE reported first-quarter 2026 results that management said put the company “off to a solid start” for the year, supported by regulated investment, ongoing operations and maintenance (O&M) reductions, and improving reliability metrics across several jurisdictions.

First-quarter earnings increase; guidance reaffirmed

Chief Financial Officer Jon Taylor said FirstEnergy posted first-quarter GAAP earnings of $0.70 per share, up from $0.62 in the first quarter of 2025. Core Earnings were $0.72 per share, up 7.5% from $0.67 a year earlier, with Taylor noting that “each of our regulated businesses” reported year-over-year increases.

CEO Brian Tierney said results were “in line with our 2026 earnings guidance range of $2.62 to $2.82 per share.” Taylor reaffirmed that guidance along with FirstEnergy’s $6 billion 2026 capital plan, adding that “most of the remaining earnings growth compared to 2025” is expected to materialize in the second half of the year.

Taylor also reaffirmed the company’s long-term Core Earnings compounded annual growth rate (CAGR) target of 6% to 8% through 2030, “targeting near the top end of that range,” based on the 2026 guidance midpoint of $2.72 per share.

Capital spending, rate base growth, and O&M reductions highlighted

Management attributed earnings growth largely to execution on a regulated investment strategy. Taylor said 75% of the company’s capital program is under a formula rate structure. He also reported that transmission rate base increased in the quarter, including a 19% increase at integrated businesses and an 11% increase from the Stand-Alone Transmission segment.

FirstEnergy invested $1.4 billion during the quarter, a 33% increase compared to the first quarter of 2025. Taylor said “nearly all of the increase” was in formula-rate investment programs focused on reliability and resiliency.

On costs, Taylor said base O&M was down close to 5% in the quarter and tied the performance to the company’s “continuous improvement” efforts, including automation, data transparency, and technology enhancements. In response to a question about whether the savings were structural, Taylor characterized the benefits as “sustainable,” pointing to a shift toward “integrated analytical risk-based decision-making” using data and analytics to deploy resources more efficiently.

Tierney added that FirstEnergy’s organizational model shift toward five business units is “shrinking our service core and increasing our business unit presence,” moving customer management “closer to the customer” and contributing to operational improvements.

Financing and credit updates

Taylor said Moody’s raised its outlook on FirstEnergy’s senior unsecured rating to positive in late March, citing an improved credit profile and the company’s “low-risk rate-regulated T&D operations.”

He also highlighted an $850 million debt offering for FirstEnergy Pennsylvania completed in March with an average coupon of 4.4%, which he said was “more than five times oversubscribed.” Additional planned debt issuances included $250 million at MAIT and $175 million at ATSI.

Looking ahead, Taylor said the 2026 financing plan includes $1.7 billion in subsidiary debt offerings and “a modest amount of common equity.” He reiterated that the company’s current five-year plan includes up to $2 billion of equity or equity-like securities, including $100 million annually from long-term employee benefit programs, with expected annual common equity issuance of about 1% of current market capitalization.

Regulatory and state updates: West Virginia, Ohio, Pennsylvania, New Jersey, Maryland

In West Virginia, Taylor said hearings for the proposed 1.2 gigawatt combined-cycle gas facility are scheduled for mid-July, with the company anticipating approval in the second half of the year. Tierney said the company remains “confident” in its estimated plant cost of about $2.5 billion, while noting it is a “seller’s market” for turbines and related equipment. Taylor said the company is working through major equipment, EPC, and gas supply contracts and expects to be positioned to execute agreements upon regulatory approval, with an updated financial plan to reflect the investment.

Asked about turbine availability and timing, Tierney said the company is “on track to receive delivery of equipment to be able to be online in 2031 with the power plant.” Taylor added that, upon approval, FirstEnergy has told investors West Virginia rate base growth would increase “from just over 10% to just over 11%.”

Taylor also discussed the equity component for the West Virginia generation investment, stating that with potential AFUDC cash recovery, the company expects “up to about 35%” of that investment would be funded with new equity and that he does not anticipate exceeding that level as new investments are layered into the plan.

On rate cases:

• West Virginia: Taylor said a base rate case is planned for May, reflecting a $1 billion increase in rate base since the 2023 case, with new rates expected in the first quarter of 2027.
• Ohio: Taylor said FirstEnergy made pre-filing notices on April 22 for a three-year rate plan to be filed next month. Since the 2024 rate case filing, the company has invested more than $1.3 billion in Ohio’s distribution system. The proposal includes raising investment by nearly 15% to about $800 million annually, with proposed customer bill impacts of less than 3% each year and new rates expected mid-2027.
• Pennsylvania: Taylor said that as of April, the approved infrastructure investment program is being recovered through the Distribution System Improvement Charge, supporting recovery of nearly 50% of FirstEnergy Pennsylvania’s capital investment program.

Tierney repeatedly emphasized “affordability” as a central theme in regulatory strategy, stating that FirstEnergy’s average rates are 20% below in-state peers and the transmission-and-distribution component is 35% below peers. He said the affordability conversation is being driven primarily by a “demand and supply imbalance” in the PJM capacity market construct. Tierney said FirstEnergy views PJM’s proposed reliability backstop procurement auction as “a step in the right direction,” but said significant detail is still needed to ensure the right amount of dispatchable generation is procured at “affordable rates.”

Tierney also pointed to cost actions since 2022, saying the company reduced base O&M by more than $200 million, or 15%, and continues to pursue efficiencies. He highlighted a Pennsylvania filing to reform the default service program, saying that if the mechanism had been in place in 2025, customers “would have saved $80 million.”

In New Jersey, Tierney said FirstEnergy would be “very, very thoughtful” on the timing of any potential rate case and reiterated a “no surprises” approach with the governor and the Board of Public Utilities. Taylor also cited reliability improvements, saying outage duration per customer improved 16% from 2024 to 2025, or about 49 minutes.

In Maryland, Taylor said it was “too early to tell” what impacts could result from an omnibus bill recently passed in the state and noted the company has historically used a historical test year there.

Transmission opportunities and data center-driven load growth

Tierney said FirstEnergy continues to see transmission opportunity through PJM’s regional planning process. Taylor noted that 80% to 85% of the transmission capital plan relates to investments on the existing system rather than competitive projects, citing system location and age as key drivers for ongoing core investment needs.

Tierney also highlighted competitive transmission success, saying FirstEnergy has been awarded more than $5 billion in competitive projects over the last four years and expects additional opportunities in future solicitations.

On large-load growth, Tierney said West Virginia data center demand continues to increase, describing “approximately 1.8 GW of highly credible projects,” up 50% since February, and said the company is in dialogue with prospective customers representing over 6 GW of load in the state. He added that about 4 GW of the company’s total pipeline is in “final contract negotiations” and expected to become contracted with a construction agreement “within this quarter,” which he said would nearly double contracted demand.

In discussing cost allocation for large loads, Tierney said hyperscalers and developers are increasingly focused on ensuring they pay their “fair share,” and he emphasized transparency around who bears costs as the company evaluates models to support growth while protecting existing customers.

About FirstEnergy NYSE: FE

FirstEnergy Corp. NYSE: FE is a U.S.-based electric utility holding company headquartered in Akron, Ohio. The company's primary business is the delivery of electricity through its regulated transmission and distribution utilities, serving residential, commercial and industrial customers across parts of the Midwest and Mid‑Atlantic. FirstEnergy's service territory includes states such as Ohio, Pennsylvania, New Jersey, Maryland and West Virginia, and it operates primarily within the PJM regional transmission organization.

FirstEnergy's core activities center on owning and operating electric distribution networks and transmission systems, maintaining and upgrading grid infrastructure, managing storm response and restoration, and offering customer programs that include energy efficiency and reliability services.

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