FirstEnergy outlines 6–8% EPS growth and $5.5B capital plan as transmission investments surge

Earnings Call Insights: FirstEnergy Corp. (FE) Q3 2025

MANAGEMENT VIEW

* Brian Tierney, CEO, President & Chair of the Board, highlighted strong results across all key financial metrics, stating the company reported third quarter GAAP earnings of $0.76 per share and core earnings of $0.83 per share. Tierney emphasized, "Our results benefited from strong execution of our customer-focused investment plan, Pennsylvania base rates that went into effect in January and strong financial discipline."
* Tierney announced an increase in the 2025 capital investment program by 10% to $5.5 billion, citing a 30% year-over-year increase in capital deployed into regulated utilities through the first nine months. He added, "With our strong year-to-date results, we are raising our 2025 guidance midpoint and narrowing our range to $2.50 to $2.56 per share."
* The company reaffirmed its core earnings compounded annual growth rate of 6% to 8% and plans to roll out a higher CapEx plan for 2026 through 2030 in early 2026.
* Tierney described surging data center demand as transformative, noting, "Our long-term pipeline of demand, which includes interconnection requests from serious and reputable customers has nearly doubled since our fourth quarter earnings call in February."
* K. Taylor, Senior VP & CFO, stated, "We delivered third quarter core earnings of $0.83 per share, a 9% increase versus 2024. This improvement was largely a result of new distribution base rates in Pennsylvania...and total transmission rate base growth of 11%."

OUTLOOK

* Guidance for full-year 2025 was raised, with the midpoint now at $2.50 per share and a narrowed range of $2.50 to $2.56 per share, up from the prior range.
* Management reaffirmed the core earnings growth target: "We are reaffirming our core earnings compounded annual growth rate of 6% to 8%."
* Early next year, the company expects to introduce a higher CapEx plan for the 2026–2030 period, with particular emphasis on transmission investments, which are projected to increase by 30% versus the current five-year plan.

FINANCIAL RESULTS

* Third quarter GAAP earnings were $0.76 per share and core earnings reached $0.83 per share, up from $0.73 and $0.76 per share respectively in the year-ago quarter.
* Year-to-date core earnings rose to $2.02 per share, a 15% increase from $1.76 per share in 2024.
* Capital investments reached $4 billion for the first nine months, a 30% increase year-over-year. Most of the increase was in transmission capital, with $1.9 billion invested and a 35% increase compared to 2024.
* Cash from operations was $2.6 billion through September 30, over $700 million higher than the prior year.
* Return on equity for the trailing 12 months stood at 10.1%, up from 9.4% in 2024.
* The 2025 financing program, totaling close to $6 billion in debt, was completed, including a $2.5 billion convertible debt offering.

Q&A

* Nicholas Campanella, Barclays: Asked about capital recovery scenarios for new generation in West Virginia. Tierney responded that earnings attribution for self-build would primarily come after assets are online, with some recovery during construction.
* David Arcaro, Morgan Stanley: Inquired about the impact of increased CapEx opportunities on long-term earnings growth. Tierney said, "We think of it as firming up the ability for us to be in that 6% to 8% earnings per share range over the planning period."
* Carly Davenport, Goldman Sachs: Asked about the confidence behind the 30% transmission CapEx increase. Tierney explained, "About 60% of it is associated with reliability enhancements...and 40% is what we call regulatory required."
* Ross Fowler, BofA: Questioned supply chain constraints for the West Virginia gas project. Tierney indicated lead times are down to 3-4 years and pricing remains strong.
* Anthony Crowdell, Mizuho: Sought clarification on whether increased CapEx could drive EPS growth above the 6%–8% range. Tierney clarified, "This increase in CapEx that we're talking about gives us extreme confidence in the 6% to 8% earnings per share growth range."

SENTIMENT ANALYSIS

* Analysts focused on the sustainability of increased CapEx, risk of cost inflation, and load growth visibility, with a neutral to slightly positive tone, pressing for operational details and future impacts.
* Management maintained a confident and constructive tone in prepared remarks and Q&A, repeatedly expressing confidence in achieving guidance and the upper end of the targeted growth range. Tierney said, "We feel really confident once we have put them in that contracted category."
* Compared to the previous quarter, management’s tone shifted from steady confidence to increased emphasis on growth opportunities and proactive risk mitigation, while analysts maintained a similar level of scrutiny.

QUARTER-OVER-QUARTER COMPARISON

* The current quarter saw a raised guidance midpoint and narrowed range, compared to reaffirmation of guidance in Q2.
* Capital investment plans increased to $5.5 billion from $5 billion, and the expected transmission investment growth rate for 2026-2030 was raised from up to 20% to 30%.
* Management’s confidence and focus on transmission and data center-driven growth intensified, with more explicit discussion of the pipeline and rate base growth.
* Analysts continued to probe CapEx sustainability and regulatory outcomes, while management provided more granular detail and highlighted resilience in planning.

RISKS AND CONCERNS

* Management acknowledged rising electric bills in deregulated states, attributing 85% of increases to the generation component, and stressed the need for new dispatchable generation.
* Tierney noted the company is working with state leadership to address affordability and protect existing customers as new data center demand rises.
* Analysts questioned supply chain constraints, cost inflation, and rate case strategies, with management expressing confidence in vendor relationships and resiliency in capital planning.

FINAL TAKEAWAY

FirstEnergy delivered strong third-quarter results with raised full-year guidance and a significant increase in planned capital investments, particularly in transmission and regulated generation. Management highlighted transformative load growth from data centers and reinforced confidence in achieving 6% to 8% annual core earnings growth, supported by a robust investment pipeline and constructive regulatory environment. The company’s proactive approach to regulatory and supply chain risks, together with transparent communication on strategic priorities, positions FirstEnergy to capture growth opportunities across its service territories in the years ahead.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/fe/earnings/transcripts]

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