FirstEnergy Shares Get a Charge from FY20 Earnings and 2021 Outlook

Source: Streetwise Reports   02/18/2021

Shares of FirstEnergy Corp. traded 8.5% higher after the regional electric utility company reported financial results for Q4/20 and FY/20 and offered positive earnings guidance for FY/21.

Regional electric power company FirstEnergy Corp. (FE:NYSE), which provides electricity to six million customers in the Midwest and Mid-Atlantic regions, today announced financial results for Q4/20 and FY/20 ended December 31, 2020.

FirstEnergy reported that in FY/20 it generated revenue of $10.8 billion, compared to $11 billion during FY/19. The company further stated that in FY/20 GAAP earnings were $1.1 billion, or $1.99 per basic and diluted share, compared to GAAP earnings of $908 million, or $1.70 per basic share ($1.68 diluted) in FY/19. The firm added that operating (non-GAAP) earnings were $2.39 per share in FY/20, versus $2.58 per share in FY/19.

The company’s President and Acting CEO Steven E. Strah commented, “Our fundamental performance in 2020 was solid, and we continued making progress on our strategic goals. This is a testament to our team’s dedication, commitment to customer service, and focus on execution, even in the face of unprecedented challenges…As we move forward, our leadership team is committed to continue taking decisive actions to put our company on the right path, with integrity and transparency. We remain focused on providing reliable service to our customers while delivering operational and safety excellence and strong financial results.”

FirstEnergy offered some forward guidance estimates and listed that for FY/21 it expects GAAP and operating (non-GAAP) earnings guidance to be in the range of $1,305-1,415 million, or $2.40-2.60 per share based upon approximately 544 million outstanding shares.

The company stated that it expects that in Q1/21 GAAP and operating (non-GAAP) earnings will fall in the range of between $335-390 million, or $0.62-0.72 per share.

FirstEnergy additionally reaffirmed its plans to issue as much as $600 million in equity annually in both FY/22 and FY/23.

The company indicated also that it posted revenue of $2.5 billion in Q4/20, compared to $2.7 billion in Q4/19.

For Q4/20, the firm posted GAAP earnings of $242 million, or $0.45 per basic and diluted share, compared to a GAAP loss of $111 million, or $0.20 per basic and diluted share in Q4/19. FirstEnergy advised that operating (non-GAAP) earnings for Q4/20 were $0.32 per share, versus $0.55 per share in Q4/19.

FirstEnergy is an electric utility holding company headquartered in Akron, Ohio. The company operates greater than 24,500 miles of transmission lines connecting the Midwest and Mid-Atlantic regions and has total power generating capacity of 3,780 megawatts. The company provides commercial and residential power service to 6 million customers via 269,000 miles of distribution lines to customers in Ohio, West Virginia, Pennsylvania and New Jersey.

FirstEnergy began the day with a market cap of around $17.3 billion with approximately 542.6 million shares outstanding and a short interest of about 3.1%. FE shares opened slightly lower today at $31.59 (-$0.36, -1.13%) from yesterday’s $31.95 closing price. The stock has traded today between $31.59 and $35.39 per share and is currently trading at $34.63 (+$2.68, +8.39%).

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