PG&E (PCG) Q2 Revenue Slips 1.5%

Core Insights - PG&E's Q2 FY2025 earnings report revealed that both non-GAAP EPS and GAAP revenue fell short of Wall Street expectations, leading to a reduction in GAAP earnings targets for the year while maintaining the adjusted profit outlook [1][11] Financial Performance - Non-GAAP core EPS was reported at $0.31, missing the analyst expectation of $0.32, while GAAP revenue was $5.90 billion, below the market estimate of $6.24 billion, reflecting a year-over-year decline of 1.5% [2][5] - Net income (GAAP) increased to $549 million, a 4.8% rise year-over-year, but both adjusted and unadjusted EPS remained flat compared to the previous year [5][10] - The electric segment generated $4.41 billion in revenue, down from prior-year levels, while natural gas revenue decreased to $1.484 billion [5] Operational Focus - PG&E's strategic focus includes regulatory compliance, climate change adaptation, financial health, operational safety, and customer engagement, which are essential for rebuilding trust and supporting long-term infrastructure upgrades [3][4] - The company connected over 3,300 new electric customers and added more than 2,000 new electric vehicle charging ports to its grid [8] - Significant investments in wildfire mitigation programs were noted, with 32 miles of underground powerlines and 103 miles of system hardening completed [8] Regulatory and Environmental Initiatives - PG&E submitted its smallest proposed general rate case increase in a decade, aiming to keep residential gas and electricity bills flat by 2027 [7] - The company achieved a 42% reduction in methane emissions from its gas pipeline system in 2024 compared to a 2015 baseline, exceeding its earlier commitment [7] Future Outlook - For fiscal 2025, PG&E reaffirmed its non-GAAP core EPS forecast at $1.48 to $1.52 per share but lowered its GAAP guidance to a range of $1.26 to $1.32 per share due to unrecoverable interest expenses and other cost pressures [11] - The company emphasized that its $63 billion five-year capital plan through 2028 is fully funded, supporting future infrastructure investments [11] - Investors are advised to monitor regulatory decisions, wildfire mitigation efforts, and growth in demand segments such as data centers and vehicle electrification [12]