PSEG Q3 2025 presentation: Operating earnings jump 26%, narrows full-year guidance

Introduction & Market Context

Public Service Enterprise Group (NYSE:PEG) presented its third-quarter 2025 financial results on November 3, 2025, revealing a 26% year-over-year increase in non-GAAP operating earnings and narrowing its full-year guidance. The company’s stock responded positively, rising 1.51% in pre-market trading to $81.78, reflecting investor confidence in PSEG’s operational performance and strategic direction.

The utility company continues to benefit from infrastructure modernization initiatives and growing customer demand, particularly as data center inquiries increase across its service territories. PSEG’s balanced portfolio of regulated utility operations and generation assets has positioned it well to navigate the evolving energy landscape.

Quarterly Performance Highlights

PSEG reported third-quarter 2025 net income of $1.24 per share, compared to $1.04 per share in the same period last year. Non-GAAP operating earnings reached $1.13 per share, a substantial 26% increase from $0.90 per share in Q3 2024, exceeding analyst expectations of $1.03 per share.

The company’s PSE&G utility segment delivered particularly strong results, with net income of $515 million in Q3 2025, compared to $379 million in Q3 2024, representing a $136 million increase. Meanwhile, the PSEG Power & Other segment saw a decline in operating earnings to $50 million from $69 million in the prior year.

As shown in the following quarterly results comparison:

The EPS reconciliation chart below illustrates the key drivers behind the year-over-year improvement in operating earnings, with PSE&G’s distribution margin contributing $0.30 per share to the growth:

For the year-to-date period ending September 30, 2025, PSEG reported net income of $3.59 per share and non-GAAP operating earnings of $3.33 per share, representing a 17% increase from the same period in 2024.

Detailed Financial Analysis

PSEG has narrowed its full-year 2025 non-GAAP operating earnings guidance to $4.00-$4.06 per share, from the previous range of $3.94-$4.06 per share, signaling increased confidence in meeting its financial targets. This adjustment aligns with the company’s long-term non-GAAP earnings growth outlook of 5%-7% through 2029.

The company invested approximately $1 billion in capital expenditures during the third quarter and $2.7 billion year-to-date, as part of its full-year 2025 capital spending plan of approximately $3.8 billion. These investments are primarily focused on infrastructure modernization, energy efficiency initiatives, and meeting growing customer demand.

As illustrated in the following outlook slide:

PSEG maintains a solid financial position with strong credit ratings and approximately $3.6 billion of total available liquidity as of September 30, 2025. The company’s debt-to-capitalization ratio stands at 58%, with variable rate debt representing only about 4% of total debt. This financial strength supports PSEG’s ability to execute its robust capital plan without the need to issue equity or sell assets.

Strategic Initiatives

PSEG’s operational performance remained strong during the quarter, with the company successfully maintaining system reliability despite severe weather challenges. The utility restored all impacted electric customers within 24 hours and over 200 gas services within a four-day period following a severe storm and flooding event.

On the nuclear front, Hope Creek completed a breaker-to-breaker run for 499 days and extended its fuel cycle from 18 to 24 months, enhancing operational efficiency. The nuclear fleet maintained a capacity factor of 92.4% in Q3 2025, slightly below the 94.5% achieved in Q3 2024, but the year-to-date capacity factor improved to 93.7% from 91.4% in the prior year.

The company continues to make progress on its infrastructure modernization initiatives, replacing approximately 170 miles of gas main and 22,000 associated gas services to homes and businesses year-to-date. These efforts have contributed to a reduction in reported methane emissions by over 30% system-wide since 2018.

PSEG also highlighted favorable results from PJM capacity auctions, with prices increasing significantly for future delivery periods. The cleared capacity prices rose from $61/MW-Day for the 2024-2025 period to $329/MW-Day for the 2026-2027 period, potentially providing a substantial boost to future earnings.

Forward-Looking Statements

Looking ahead, PSEG reaffirmed its total capital program of $22.5 billion to $26 billion for 2025-2029, with $21 billion to $24 billion allocated to regulated investments. These investments are expected to support PSE&G’s rate base compound annual growth rate of 6%-7.5% over the same period.

The company noted that growth beyond the forecasted 2025-2029 CAGR range could be achieved through opportunities to contract existing nuclear output under multi-year agreements and potential incremental capital investments. This optimistic outlook is supported by increasing demand for electricity, with large load inquiries for new service connections rising to approximately 11,500 megawatts.

PSEG’s residential electric and gas customer count grew by approximately 1% for the trailing 12 months ended September 30, 2025, indicating steady demand despite weather-normalized electric sales remaining flat and gas sales decreasing by 1% over the same period.

The extension of the PSEG Long Island OSA contract to manage LIPA’s transmission and distribution utility for an additional five years through 2030 further demonstrates the company’s operational excellence and provides a stable source of revenue for the coming years.

With its narrowed guidance, robust capital investment program, and solid financial position, PSEG appears well-positioned to deliver on its long-term growth objectives while navigating the evolving energy landscape.

Full presentation:

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