E.ON posts strong 1Q earnings, beats expectations, and reaffirms guidance

Investing.com -- E.ON SE (ETR:EONGn)’s stock rose on Wednesday after the company reported a solid first-quarter 2025 performance, with adjusted EBITDA increasing by 18% to €3.2 billion, compared to €2.7 billion a year earlier.

This exceeded market expectations, beating Jefferies’ estimates by 6% and consensus by 3%.

The earnings beat was driven by a 20% year-over-year increase in the Energy Networks segment, which reported €2.1 billion in adjusted EBITDA, supported by organic regulated asset base (RAB) growth, volume increases, and network loss recoveries in the Southeast European region.

The Energy Infrastructure Solutions (EIS) segment grew 25% year-over-year, in line with expectations, while Energy Retail saw an 8% rise in EBITDA, outperforming consensus by 3%.

Net income also saw  growth, rising 22% to €1.3 billion from €1 billion in Q1 2024, beating Jefferies’ estimate by 8% and consensus by 1%.

E.ON reaffirmed its full-year guidance, expecting adjusted EBITDA between €9.6 billion and €9.8 billion, and adjusted net income in the range of €2.85 billion to €3.05 billion.

Analysts noted that the 22% net income growth in Q1 was well above the 3% implied by full-year guidance, with Q1 contributing 43% to the midpoint of the full-year net income forecast, compared to 37% in FY24.

Total (EPA:TTEF) investments for the quarter increased to €1.5 billion, up from €1.3 billion in Q1 2024.

Of this, €1.2 billion was allocated to network operations, focusing on infrastructure modernization, digitalization, and new grid connections.

The Energy Networks segment’s growth to €2.1 billion in EBITDA was a key contributor to the beat, driven by higher infrastructure spending and cost recovery in certain regions.

Energy Retail’s €933 million EBITDA, up €70 million YoY, was supported by improved performance in the U.K.

Meanwhile, the EIS segment reported €200 million in EBITDA, up 25% YoY, driven by favorable weather and project expansions.

Despite a higher-than-expected net debt of €44.2 billion, up €3 billion from FY24, E.ON’s performance remains strong.

The company’s solid Q1 results and reaffirmed guidance create upside risk to consensus estimates, particularly in net income.

E.ON also proposed a 4% dividend increase to €0.55 per share for FY24, subject to shareholder approval on May 15.