FirstEnergy Corp. Prepares for Q4 Earnings Release Amidst Mixed Analyst Forecasts
Expectations Rise as Company Set to Announce Fiscal Results
FirstEnergy Corp. (FE), based in Akron, Ohio, plays a key role in the energy sector by generating, transmitting, and distributing electricity. With a market cap of $23 billion, the company operates a diverse portfolio of power generation facilities that include coal-fired, nuclear, hydroelectric, wind, and solar options. FE also offers natural gas exploration, production, and distribution services. The utility giant is scheduled to release its fiscal fourth-quarter earnings for 2024 on Thursday, February 13.
Leading up to this important announcement, analysts predict that FE will report a profit of $0.71 per share on a diluted basis. This marks a 14.5% increase from $0.62 per share during the same quarter last year. FE has successfully met or exceeded consensus estimates in three of the past four quarters, although it did fall short on one occasion.
Looking at the full fiscal year, analysts anticipate that FE’s earnings per share (EPS) will be $2.67, representing a 4.3% rise from $2.56 in fiscal 2023. Furthermore, EPS is expected to increase by 8.6% year over year to reach $2.90 in fiscal 2025.
Over the past 52 weeks, FE’s stock has lagged behind the S&P 500’s growth of 26.5%, showing an increase of only 6.9%. The company also fell short compared to the Utilities Select Sector SPDR Fund’s (XLU) 27.7% gains in this period.
Several factors have contributed to FE’s underperformance, including seasonal demand changes, mild weather reducing power sales, regulatory pressures in Ohio, high storm restoration costs, and asset sale dilution. Additionally, uncertainties around regulatory approvals for base rate requests may hinder the company’s ability to recover service costs, which could impact its performance negatively.
On October 29, FE shares dropped by 2% following the release of its Q3 results. The reported adjusted EPS of $0.85 did not meet Wall Street expectations of $0.91, and revenues totaled $3.7 billion, falling short of the projected $4 billion. For the full year, the company projects its adjusted EPS will fall between $2.61 and $2.71.
Despite recent challenges, analysts maintain a moderately positive outlook for FE stock, providing an overall “Moderate Buy” rating. Among 17 analysts covering the stock, seven recommend a “Strong Buy,” two suggest a “Moderate Buy,” seven give a “Hold,” and one proposes a “Moderate Sell.” Currently, the average analyst price target stands at $46.94, indicating a potential upside of 17.7% from current prices.
On the date of publication,
Neha Panjwani
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