FE — FirstEnergy Corp.

FirstEnergy Corp. Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics:

• GAAP Earnings: $1.77 per share, up from $1.70 in 2024.
• Core Earnings: $2.55 per share, a 7.6% increase year-over-year and at the top end of the revised guidance range.
• Capital Investments: $5.6 billion in 2025, a 25% increase from 2024 and 12% above the original plan.
• Return on Equity (ROE): 9.8% on a rate base of $27.8 billion, compared to 9.4% on $25.6 billion in 2024.
• Dividends: Quarterly dividends of $1.78 per share, reflecting a 5% increase from 2024.

2. Strategic Updates and Business Highlights:

• Announced a $36 billion five-year capital investment program aimed at enhancing customer reliability and grid resiliency, marking a nearly 30% increase from the previous plan.
• Focused on regulatory strategies in Ohio, with positive outcomes leading to an S&P ratings upgrade to BBB flat.
• Significant investments in transmission, with $19 billion allocated, representing a 35% increase from the prior plan.
• Continued improvements in distribution reliability metrics, with a 10% enhancement compared to 2024.

3. Forward Guidance and Outlook:

• Projected core earnings compounded annual growth rate (CAGR) of 6% to 8% from 2026 to 2030, with potential increases from new generation investments in West Virginia.
• Anticipated rate base growth of 10% through 2030, with a focus on maintaining affordability for customers.
• Plans to file traditional base rate cases in Maryland and West Virginia in 2026, with expected rate increases at or below inflation.

4. Bad News, Challenges, or Points of Concern:

• The company faces challenges in managing customer affordability amidst rising costs, with ongoing legislative scrutiny regarding utility rates.
• There is potential regulatory risk associated with the approval of new generation projects and the impact of the Maryland Lower Bills Act.
• The need for ongoing investments in aging infrastructure poses financial and operational challenges, particularly in the transmission segment.

5. Notable Q&A Insights:

• Management indicated that approximately 75% of capital investments are in formula rate programs, which provide more predictable recovery mechanisms.
• Questions regarding the execution of the $36 billion CapEx plan highlighted concerns about labor availability and project management capabilities, which management addressed by emphasizing strong supplier relationships and project discipline.
• Discussions on the regulatory landscape in Ohio revealed a focus on maintaining constructive relationships with regulators and stakeholders, particularly after resolving legacy issues.
• Insights on data center demand indicated significant activity in Maryland, Pennsylvania, and Ohio, with expectations for continued growth in contracted load through 2035.

Overall, FirstEnergy Corp. demonstrated strong financial performance in 2025, with a clear strategic focus on infrastructure investment and regulatory engagement, while also navigating challenges related to affordability and regulatory scrutiny.