Core Insights - FirstEnergy is investing in infrastructure upgrades to enhance service reliability for customers in New Jersey, specifically benefiting 1,700 customers in Roxbury, Mount Arlington, and Hopatcong [1][2] - The New Jersey Reliability Improvement Project is a two-phase initiative with a minimum investment of $95 million over three years, focusing on high-priority lines based on historical outage data [2][3] - The Energize365 program aims to invest $26 billion from 2024 to 2028 across six states to create a smarter and more secure electric grid [3] Company Overview - JCP&L serves approximately 1.1 million customers across various counties in New Jersey [4] - FirstEnergy operates one of the largest investor-owned electric systems in the U.S., serving over six million customers across multiple states [5] Project Details - The project includes installing about 2,000 feet of underground wires in Roxbury Township and upgrading existing infrastructure with stronger poles and overhead wires [7] - Additional upgrades involve increasing protective devices and reclosers to minimize customer impact during outages [7] - The installation of TripSaver devices will allow for automatic reenergization of power lines after temporary abnormalities, reducing the need for crew dispatch [7]

Financial Performance - Total revenues for 2024 reached $13,472 million, an increase of 4.7% from $12,870 million in 2023[521]. - Operating income for 2024 was $2,375 million, up 4.8% compared to $2,266 million in 2023[521]. - Net income attributable to FirstEnergy Corp. for 2024 was $978 million, a decrease of 11.3% from $1,102 million in 2023[521]. - Earnings per share for continuing operations in 2024 was $1.70, down from $1.96 in 2023[521]. - Comprehensive income for 2024 was $1,130 million, slightly down from $1,173 million in 2023[523]. - Total operating expenses for 2024 were $11,097 million, an increase of 4.6% from $10,604 million in 2023[521]. - Interest expense for 2024 was $1,144 million, compared to $1,124 million in 2023[521]. - Cash flows from operating activities rose significantly to $2,891 million in 2024, compared to $1,387 million in 2023, marking an increase of 108.4%[532]. - Capital investments in 2024 totaled $4,030 million, an increase from $3,356 million in 2023, reflecting a growth of 20%[532]. - The company declared cash dividends of $1.70 per share in 2024, compared to $1.60 in 2023, indicating a 6.25% increase[529]. Assets and Liabilities - Total assets increased to $52,044 million in 2024, up from $48,767 million in 2023, representing a growth of 4.6%[526]. - As of December 31, 2024, regulatory assets amounted to $617 million and regulatory liabilities were $995 million[515]. - The total liabilities increased to $38,324 million in 2024 from $37,851 million in 2023, a rise of 1.2%[526]. - Long-term debt decreased to $22,496 million in 2024 from $22,885 million in 2023, a reduction of 1.7%[526]. - Common stockholders' equity increased to $12,455 million in 2024, up from $10,437 million in 2023, representing a growth of 19.4%[526]. Employee and Corporate Structure - FirstEnergy's total employee count as of December 31, 2024, was 12,294, with approximately 40% represented by unions[64][65]. - The company continues to focus on employee development through various programs, including leadership training and educational opportunities[61][62]. - FirstEnergy's safety metrics are regularly monitored and included in the annual incentive compensation program to promote a safe work environment[59][60]. - The company has consolidated its Pennsylvania Companies into FE PA as of January 1, 2024, creating a new single operating entity[53][66]. Regulatory and Compliance - The imposition of new tariffs could adversely affect FirstEnergy's results of operations and financial condition, as the situation remains dynamic[50]. - FirstEnergy's default service obligations vary by state, with competitive procurement processes in place for securing power supply[51]. - The company maintained effective internal control over financial reporting as of December 31, 2024[507]. Market and Customer Metrics - FirstEnergy serves over six million customers across the Midwest and Mid-Atlantic regions, comprising one of the largest investor-owned electric systems in the nation[541]. - Total customer receivables as of December 31, 2024, amounted to $1,530 million, compared to $1,318 million in 2023, reflecting an increase of 16.0%[601]. - Unbilled customer receivables increased to $718 million in 2024 from $665 million in 2023, indicating a growth of 7.9%[601]. - Retail generation and distribution services for residential customers in the Distribution segment reached $4,514 million in 2024, a 3.9% increase from $4,344 million in 2023[593]. Pension and Benefits - FirstEnergy expects to make a voluntary contribution to its pension plan, with an estimated amount of approximately $300 million anticipated in 2027[613]. - The discount rate for pension obligations increased to 5.72% in 2024 from 5.05% in 2023[618]. - The benefit obligation as of December 31, 2024, decreased to $7,824 million from $8,363 million in 2023, a decline of approximately 6.4%[626]. - The actual return on plan assets for 2024 was a loss of $62 million, contrasting sharply with a gain of $682 million in 2023[626]. Taxation - FirstEnergy's total income taxes on income from continuing operations for 2024 amounted to $377 million, with an effective income tax rate of 25.1%[656]. - The net accumulated deferred income tax liability as of December 31, 2024, was $5.613 billion, an increase from $4.530 billion in 2023[658]. - FirstEnergy recognized a net tax charge of approximately $46 million in the first quarter of 2024 related to deferred tax liabilities[653]. Capital and Investments - The company completed the sale of a 30% equity interest in FirstEnergy Transmission, LLC to Brookfield for a purchase price of $3.5 billion, with $2.3 billion paid in cash at closing[549]. - FirstEnergy's equity ownership in FET is 50.1% as of December 31, 2024, following the sale of an incremental 30% equity interest to Brookfield[678].

Core Points - FirstEnergy Transmission LLC (FET) has been awarded multiple transmission projects by PJM Interconnection, amounting to approximately $1.25 billion in investments aimed at enhancing the electric grid and supporting regional economic growth [1][2][3] - The projects include a joint venture with Dominion Energy and American Electric Power Company, as well as individual projects within FET's service territory [1][4] - FirstEnergy's subsidiaries, including Potomac Edison, JCP&L, and Keystone Appalachian Transmission Company, will invest an additional $46 million for equipment upgrades and transmission line reconfigurations in Maryland, New Jersey, and Pennsylvania [2][3] Investment Details - The approved projects were proposed through PJM's 2024 Regional Transmission Expansion Plan and were approved on February 26, 2025 [3] - FET's investment includes approximately $1 billion for the Valley Link joint venture, which involves building around 260 miles of 765-kilovolt transmission lines and two substations between West Virginia and Maryland, and 155 miles of 765-kilovolt transmission lines in Virginia [7] - In Ohio, FET plans to invest $217 million to rebuild approximately 59 miles of 138-kilovolt transmission lines, and in Pennsylvania, $33 million will be allocated for rebuilding and reconfiguring two 115-kilovolt substations [7] Company Overview - FET is jointly owned by FirstEnergy Corp. and Brookfield Super-Core Infrastructure Partners, and operates American Transmission Systems Inc., Mid-Atlantic Interstate Transmission LLC, and Trans-Allegheny Interstate Line Company [5] - FirstEnergy operates one of the largest investor-owned electric systems in the U.S., serving customers across several states including Ohio, Pennsylvania, New Jersey, West Virginia, Maryland, and New York [5]

Financial Performance and Key Metrics - The company reported 2024 GAAP earnings of $1.70 per share, with operating earnings at $2.63 per share, benefiting from new rates and investments in regulated businesses [9][10][12] - The company faced headwinds including lower sales volumes due to mild weather and storm activity, impacting Ohio revenues [10][11] - The company achieved a total of 40 ratings upgrades in 2024, marking a return to investment grade status across all subsidiaries [18] Business Line Performance - In the distribution segment, earnings increased by $0.04 per share year-over-year, driven by higher weather-related distribution sales and lower Ohio rate credits [45] - The integrated segment saw earnings rise by $0.29 per share, primarily due to new base rates in New Jersey, West Virginia, and Maryland [46] - Standalone transmission business earnings declined by $0.12 per share, impacted by the dilution from the sale of a 30% interest in FirstEnergy Transmission [47] Market Data and Key Metrics - The company completed rate reviews in four of five states, derisking 83% of its rate base, resulting in a net annual revenue increase of approximately $450 million [13] - The Pennsylvania Commission approved a $225 million base rate case settlement, effective January 1, 2025, enhancing service reliability [14] - The company anticipates investing $5 billion in regulated properties in 2025, an increase of approximately 11% over 2024 [36] Company Strategy and Industry Competition - The company is focused on a comprehensive capital investment program, Energize365, with a total investment of $28 billion through 2029 [37][38] - The new leadership team is implementing an operating model that emphasizes accountability and operational excellence [21][22] - The company aims to maintain a low-risk investment proposition with an attractive total return opportunity of 10% to 12% [39] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in achieving a core earnings growth rate of 6% to 8% through 2029, with a focus on regulatory outcomes and operational efficiency [51][57] - The company is addressing challenges related to higher financing costs and regulatory changes, particularly in Ohio [33][57] - Management highlighted the importance of maintaining affordability for customers while investing in infrastructure [120] Other Important Information - The company introduced core earnings as a measure to better reflect the performance of its regulated utilities, with core earnings growing by 33% from 2022 to 2024 [29] - The company plans to provide guidance for core earnings and growth rates starting in 2025, with a range of $2.40 to $2.60 per share [31] Q&A Session Summary Question: Insights on the 2025 guidance and O&M pressures - Management anticipates being in the 6% to 8% growth range for 2025, with O&M changes primarily related to the Pennsylvania base rate case settlement [72][74] Question: Thoughts on the Ohio audit report and its implications - Management noted the audit report's focus on capital structure and ROE, indicating a need to reconcile findings in upcoming filings [77][78] Question: Path to achieving the target FFO to debt ratio - Management expects to reach a sustainable FFO to debt ratio of slightly above 14% in 2025, aided by new rates from the Pennsylvania rate case [83] Question: Update on transmission projects and their financial implications - Management anticipates a share of approximately $675 million from selected projects, with financing handled off-balance sheet [85][86] Question: ROE assumptions in the context of core EPS CAGR - Management assumes a consolidated ROE of 9.5% to 10% during the forecast period, with Ohio expected to contribute similarly [102] Question: Update on pension funding status - The company ended the year with a pension funded status of about 84%, slightly down from the previous year [126] Question: Schedule for the Ohio rate case - Management expects to respond to the audit report within 30 days and anticipates a constructive outcome by the end of the year [130]

Financial Performance and Key Metrics - FirstEnergy reported 2024 GAAP earnings of $1.70 per share, with operating earnings at $2.63 per share, benefiting from new rates and investments in regulated businesses [9][10] - The company faced headwinds including lower sales volumes due to mild weather and storm activity, impacting overall performance [10][11] - The financial and regulatory milestones achieved in 2024 have strengthened the company's foundation and reduced its risk profile [12][18] Business Line Performance - In the distribution segment, earnings increased by $0.04 per share year-over-year, driven by higher weather-related distribution sales and lower Ohio rate credits [45] - The integrated segment saw earnings rise by $0.29 per share, primarily due to new base rates in New Jersey, West Virginia, and Maryland [46] - Standalone transmission business earnings declined by $0.12 per share, impacted by dilution from the sale of a 30% interest in FirstEnergy Transmission [47] Market Data and Key Metrics - The company achieved a consolidated return on equity of 9.4% on a rate base of $25.9 billion, an increase from 8.8% in 2023 [54] - The Pennsylvania Commission approved a $225 million base rate case settlement, effective January 1, 2025, enhancing service reliability [14] - The company anticipates investing $5 billion in regulated properties in 2025, an increase of approximately 11% over 2024 [36] Company Strategy and Industry Competition - FirstEnergy's strategy focuses on modernizing electric infrastructure and enhancing customer experience while maintaining financial discipline [61] - The Energize365 capital investment program is set at $28 billion through 2029, representing an 8% increase from the previous five-year plan [37][51] - The company aims to maintain its investment-grade credit ratings while exploring a range of financing options for future investments [38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a core earnings growth rate of 6% to 8% through 2029, with a focus on regulatory outcomes and operational efficiency [37][58] - The company is addressing challenges related to higher financing costs and regulatory changes, which may impact future earnings guidance [33][57] - Management emphasized the importance of maintaining affordability for customers while investing in infrastructure [120] Other Important Information - The company introduced core earnings as a measure to better reflect the performance of its regulated utilities, excluding volatile components [29][41] - FirstEnergy's pension plan ended the year at approximately 84% funded, with ongoing efforts to mitigate associated risks [126] - The company is actively pursuing opportunities in data center demand, which is expected to contribute significantly to future growth [56] Q&A Session Summary Question: Insights on 2025 guidance and O&M pressures - Management anticipates being within the 6% to 8% growth range for core earnings, with O&M changes primarily related to the Pennsylvania base rate case [72][74] Question: Balance sheet and FFO to debt targets - The company aims to return to a 14% FFO to debt ratio by stripping out unique items from 2024 and benefiting from new rates in Pennsylvania [82][83] Question: Ohio rate case and potential settlements - Management is open to settling cases but anticipates the current Ohio rate case will be fully adjudicated due to its complexity [91][92] Question: ROE assumptions in earnings growth - The forecast assumes a consolidated ROE of 9.5% to 10%, with Ohio expected to contribute similarly [102] Question: Dispatchable generation opportunities in West Virginia - Potential investments in dispatchable generation could range from $3 billion to $6 billion over the next 12 to 15 years [106] Question: Pension funding status - The pension plan ended the year at about 84% funded, with rates expected to positively impact future funding [126]

Core Viewpoint - FirstEnergy reported mixed financial results for the fourth quarter of 2024, with operating earnings missing estimates but showing year-over-year growth in both earnings and revenues [1][2][4]. Financial Performance - Fourth-quarter operating earnings were 67 cents per share, missing the Zacks Consensus Estimate of 70 cents by 4.3% [1]. - The bottom line increased by 8.1% from 62 cents in the same quarter last year, driven by rate base growth in distribution and transmission programs [2]. - GAAP earnings for the fourth quarter were 45 cents per share, up from 30 cents in the fourth quarter of 2023 [3]. - Total revenues for the fourth quarter were $3.18 billion, missing the Zacks Consensus Estimate of $3.67 billion by 13.5%, but increased by 1% from $3.15 billion in the prior year [4]. Annual Performance - For the full year 2024, FirstEnergy reported total revenues of $13.47 billion, reflecting a year-over-year increase of 4.7% from $12.87 billion in 2023 [4]. - Total operating expenses for 2024 were $11.1 billion, up 4.6% from $10.6 billion in the previous year [5]. - Operating income for 2024 totaled $2.38 billion, an increase of 4.8% from $2.27 billion in 2023 [5]. Distribution and Deliveries - Total distribution deliveries increased by 2.8% in 2024 compared to 2023, attributed to cooling degree days being 37% above the previous year [6]. Future Guidance - FirstEnergy expects 2025 earnings per share in the range of $2.40-$2.60, indicating a 5.5% increase over the 2024 guidance [7]. - The Zacks Consensus Estimate for 2025 is $2.89 per share, which is higher than the company's guidance [7]. - The company plans a capital investment of $5 billion in 2025, up from $4.5 billion in 2024, reflecting an 11% year-over-year increase [8]. Zacks Rank - FirstEnergy currently holds a Zacks Rank of 4 (Sell) [9].

Group 1 - FirstEnergy reported quarterly earnings of $0.67 per share, missing the Zacks Consensus Estimate of $0.70 per share, but showing an increase from $0.62 per share a year ago, resulting in an earnings surprise of -4.29% [1] - The company posted revenues of $3.18 billion for the quarter ended December 2024, missing the Zacks Consensus Estimate by 13.52%, and showing a slight increase from $3.15 billion year-over-year [2] - Over the last four quarters, FirstEnergy has surpassed consensus EPS estimates only once and has not beaten consensus revenue estimates during the same period [2] Group 2 - FirstEnergy shares have increased approximately 9.4% since the beginning of the year, outperforming the S&P 500's gain of 1.3% [3] - The company's earnings outlook, including current consensus earnings expectations for upcoming quarters, will be crucial for investors [4] - The trend for estimate revisions for FirstEnergy is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Group 3 - The current consensus EPS estimate for the upcoming quarter is $0.60 on revenues of $3.64 billion, and for the current fiscal year, it is $2.89 on revenues of $15.53 billion [7] - The Utility - Electric Power industry, to which FirstEnergy belongs, is currently ranked in the bottom 49% of over 250 Zacks industries, which may negatively impact stock performance [8]

Financial Overview - Total assets of FirstEnergy are $52 billion, serving over 6 million customers across a service territory of 65,000 square miles[9]. - FirstEnergy achieved $450 million in annual revenue increases from base rate cases approved since Q4 2023, representing a $14 billion rate base[17]. - The company has resolved several legacy issues and completed obligations under a Deferred Prosecution Agreement with the U.S. Department of Justice[17]. - The company anticipates a load growth of 2.4% CAGR from 2025 to 2029, with residential sales growth driven by electrification and EV adoption[38]. - The company is focused on executing its Energize365 transmission and distribution investment plan to enhance operational efficiency[146]. Earnings Guidance - Core EPS guidance for 2025 is projected to be between $2.40 and $2.60, with a 6-8% CAGR expected from 2025 to 2029[21]. - 2025 Core EPS guidance is projected to be between $2.40 and $2.60, with segment distributions of $1.29-$1.37 for Integrated, $0.91-$0.97 for Stand-Alone Transmission, and $0.57-$0.59 for Corp/Other[36]. - The 2024 operating earnings per share (Non-GAAP) for FirstEnergy is projected at $2.63, excluding special items[136]. - The 2023 operating earnings per share (Non-GAAP) for FirstEnergy is reported at $1.20, excluding special items[138]. - The 2022 core earnings per share (Non-GAAP) for FirstEnergy was $1.78, after adjustments for special items[140]. Investment Plans - The company plans a $28 billion base investment plan from 2025 to 2029, with 75% allocated to formula rate investments[24]. - The investment plan includes $7.4 billion for distribution, $10.9 billion for integrated operations, and $9.5 billion for stand-alone transmission[24]. - The investment plan totals $10.8 billion for the 2025-2029 period, with approximately 45% allocated to transmission investments[92]. - The company plans to invest $900 million in transmission projects from 2025 to 2029 to meet growing data center demand[43]. - FirstEnergy's distribution segment is focused on enhancing customer experience and reliability, with a rate base investment plan of $4.4 billion in Ohio[67]. Dividend Policy - The company has committed to a dividend payout ratio of 60-70% of Core EPS, with a targeted total return opportunity of 10-12%[14]. - Annual dividends per share are targeted to grow by approximately 5%, with a declared dividend of $1.70 per share and a payout ratio of 72% in 2024[35]. - The dividend yield is currently at 4%, with plans for continued growth subject to board approval[35]. Financial Discipline - FirstEnergy's financial discipline is reflected in a target of ~14%+ FFO/Debt and a commitment to maintaining a BBB credit profile[14]. - FirstEnergy Corp. maintains an investment-grade credit profile with ratings of BBB- from S&P, Baa3 from Moody's, and BBB from Fitch[58]. - The company is committed to maintaining a balance sheet with a target FFO/Debt ratio of 15% by 2023[59]. Rate Base and Growth - Rate base growth is expected to be 9% CAGR from 2025 to 2029, with a total rate base of $31.8 billion projected for 2025[29]. - The average rate base is expected to grow at a CAGR of 11% from 2025 to 2029, with a 24% CAGR specifically for transmission[93]. - The projected rate base for 2025 is $6.9 billion, with a 6% CAGR growth expected from 2025 to 2029[72]. Operating Expenses - Total Operating Expenses (GAAP) for 2023 are reported at $3,594 million, projected to increase to $4,159 million in 2024[145]. - Special items for 2023 total $247 million, expected to rise to $433 million in 2024, impacting overall financial performance[145]. - Baseline O&M (non-GAAP) remains relatively stable, with $1,280 million in 2023 and a slight increase to $1,283 million in 2024[145]. Regulatory and Compliance - The allowed return on equity (ROE) for Ohio operations is filed at 10.8%, with a debt/equity ratio of approximately 45%/55%[74]. - The allowed return on equity (ROE) for transmission investments is set at 9.6%[98]. - Forward-looking statements indicate potential risks from government investigations and regulatory changes that could impact financial performance[146]. Revenue Increases - A net annual revenue increase of $85 million was approved in the New Jersey base rate case settlement on February 14, 2024[94]. - The West Virginia base rate case settlement approved on March 26, 2024, will result in a net annual revenue increase of $105 million[101].

Core Insights - FirstEnergy Corp. reported full year 2024 GAAP earnings of $1.70 per share, down from $1.96 in 2023, with operating (non-GAAP) earnings of $2.63 per share, slightly up from $2.56 in 2023 [1][9] - The company plans to invest $4.5 billion in customer-focused capital investments in 2024, a 20% increase over 2023, to enhance grid reliability and support energy transition [1][7] - FirstEnergy is extending its Energize365 capital investment program through 2029, with planned investments of $28 billion, an 8% increase from the previous five-year plan, aiming for a 9% rate base growth [1][8] Financial Performance - For the fourth quarter of 2024, GAAP earnings were $261 million, or $0.45 per share, compared to $175 million, or $0.30 per share in the fourth quarter of 2023 [9][10] - Core (non-GAAP) earnings for the fourth quarter of 2024 were $0.61 per share, up from $0.52 per share in the same quarter of 2023, driven by rate base growth and lower operating expenses [10][12] - Full-year 2024 earnings reflect growth from regulated investment strategies, increased customer demand, and new base rates, despite challenges from higher storm restoration costs and lower revenues in Ohio [15][16] Strategic Initiatives - The company has redesigned its operating model to enhance local service delivery and has established a strong leadership team to support its strategic goals [2][3] - FirstEnergy has completed rate reviews for 83% of its rate base since 2023, addressing several legacy issues to strengthen its financial profile [3][4] - The introduction of a 2025 Core earnings guidance range of $1.4 billion to $1.5 billion, or $2.40 to $2.60 per share, indicates a targeted growth rate of 6-8% compounded annually through the five-year planning period [6][8]

FirstEnergy Corporation (FE) is scheduled to release fourth-quarter 2024 results on Feb. 26, after market close. The company delivered a negative earnings surprise of 6.6% in the last reported quarter.See the Zacks Earnings Calendar to stay ahead of market-making news.Let’s discuss the factors that are likely to be reflected in the upcoming quarterly results.Factors That Might Have Impacted FE’s Q4 PerformanceDuring the fourth quarter, FirstEnergy’s subsidiary Jersey Central Power & Light relocated and upgr ...