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Introduction & Market Context
FirstEnergy Corporation (NYSE:FE) released its first quarter 2025 financial results on April 23, showing significant earnings growth and progress on regulatory initiatives. The company’s shares closed at $42.57, down slightly by 0.33%, but gained 0.31% in after-hours trading to $42.70.
The utility company, which serves customers across Ohio, Pennsylvania, New Jersey, West Virginia, and Maryland, reported substantial year-over-year earnings improvement, driven by new base rates in multiple states and more favorable weather conditions compared to an unusually mild first quarter of 2024.
Quarterly Performance Highlights
FirstEnergy reported first quarter 2025 GAAP earnings per share (EPS) of $0.62, up from $0.44 in the same period last year. Core EPS, which excludes special items, reached $0.67, representing a 37% increase from $0.49 in Q1 2024.
As shown in the following comparison of quarterly results:
Key drivers of the earnings growth included new base rates in Pennsylvania, West Virginia, and New Jersey, as well as normal weather conditions compared to the mild first quarter of 2024. The company also cited strong financial discipline in line with its plan.
A detailed breakdown of the earnings drivers shows the specific impact of each factor:
Capital investments for the quarter totaled $1.0 billion, up from $0.9 billion in the first quarter of 2024, as the company continues to execute on its $5 billion investment plan for 2025.
Operational Performance
FirstEnergy demonstrated improved operational efficiency with first quarter 2025 Baseline O&M expenses of $340 million, down from $352 million in the same period last year. This reduction reflects the company’s ongoing focus on financial discipline.
The following chart illustrates the company’s performance against key metrics:
Total (EPA:TTEF) electricity sales increased by 4.2% compared to Q1 2024, with residential sales showing the strongest growth at 10.0%, followed by commercial sales at 5.2%. However, industrial sales declined by 2.6%. When adjusted for weather effects, total sales actually decreased by 0.3%, indicating that much of the reported growth was weather-related.
The sales performance by customer class is illustrated in the following chart:
Weather-adjusted sales showed a different picture, highlighting the impact of normal weather conditions in Q1 2025 versus the mild conditions in Q1 2024:
Regulatory and Growth Initiatives
FirstEnergy highlighted several important regulatory developments and growth opportunities. In Ohio, the company filed responses to the Staff Report and Audit Report in March, with settlement discussions beginning in April and hearings scheduled to start on May 5. The Ohio Legislature is expected to send a bill to the Governor in the May/June timeframe.
In New Jersey, the company received approval for its EnergizeNJ settlement on April 23, which includes $335 million in investments planned over a 3.5-year period from the second half of 2025 through 2028.
The company also noted significant growth opportunities in its service territories:
FirstEnergy’s trailing twelve-month consolidated return on equity (ROE) reached 9.8% as of March 31, 2025, in line with the company’s target of 9.5%-10%. This represents approximately 40 basis points of ROE improvement in Q1 2025, which the company attributes to the execution of regulated strategies, financial discipline, and normal weather conditions.
The ROE performance across different segments is shown in the following chart:
Financial Outlook and Guidance
FirstEnergy reaffirmed its 2025 Core EPS guidance range of $2.40-$2.60, indicating it is targeting the upper half of this range. The company also maintained its long-term outlook of 6-8% Core EPS compound annual growth rate (CAGR) for 2025-2029.
The company’s rate base is well-balanced across its service territories, providing stability and diversification:
FirstEnergy’s $28 billion base investment plan for 2025-2029 is expected to drive a 9% rate base CAGR over this period. The company emphasized its financial discipline, with a 2025 Baseline O&M target of $1,365 million and a financing plan that supports its investment strategy without requiring equity issuance.
The company’s credit profile has improved, with Fitch upgrading FirstEnergy Corp.’s ratings to BBB from BBB- in October 2024. As of April 23, 2025, the company maintains investment-grade ratings from all three major rating agencies.
FirstEnergy’s shareholder value proposition emphasizes its strong growth outlook, financial discipline, and attractive risk profile, targeting approximately 14%+ funds from operations (FFO) to debt ratio to maintain its solid financial position.
Brian X. Tierney, President, Chief Executive Officer, and Board Chair, and K. Jon Taylor, Senior Vice President and Chief Financial Officer, expressed confidence in the company’s ability to deliver on its 2025 financial targets and long-term growth objectives, highlighting the strong start to the year and progress on key strategic initiatives.
Full presentation:
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