FirstEnergy Q2 Earnings Beat Estimates on Strong Transmission Growth

Core earnings in the Distribution segment declined 6 cents in the second quarter of 2026 due to higher maintenance expenses, while the Stand-Alone Transmission segment benefited from an 11% increase in transmission rate base, boosting earnings by 4 cents.

Total Revenues of FE

Operating revenues of $3.68 billion beat the Zacks Consensus Estimate of $3.56 billion by 3.43%. The top line increased 8.82% from $3.38 billion recorded in the year-ago quarter.

FE's Revenue Mix Supports Growth

Distribution: Revenues from this segment totaled $1.71 billion, up 2.3% from the prior-year quarter’s level. Electric revenues increased $44 million, while other revenues declined $5 million.

Integrated: Revenues from this segment amounted to $1.43 billion, up 13.7% from the prior-year quarter. The increase was driven by a $130 million rise in revenues from contracts with customers and a $43 million increase in other revenues unrelated to contracts with customers.

Stand-Alone Transmission: Revenues from this segment amounted to $544 million, up 19.30% from the prior-year quarter’s level, driven by rate base growth, the recovery of transmission operating costs and annual formula-rate true-ups.

FE's Costs Rise With the Investment Cycle

Total operating expenses were $3 billion, up 9.77% from the year-ago quarter's level of $2.73 billion. Purchased-power costs rose to $1.16 billion from $953 million, while other operating expenses increased to $1.17 billion from $995 million.

Operating income nevertheless increased 4.8% to $677 million as revenue growth exceeded the rise in operating costs. 

Interest expense climbed to $337 million from $299 million due to new long-term debt and convertible note issuances, net of repayments.

FirstEnergy's Demand Pipeline Expands

Total contracted and pipeline data center demand reached 24.8 gigawatts (GW), up about 30% from the first quarter. West Virginia demand increased 137% to 4.3 GW, supporting the company's evaluation of additional generation, transmission and distribution investments.

FE expects another 1.5 GW of demand to be contracted shortly. Management is also advancing the proposed 1.2-GW Maidsville Energy Center and 70 megawatts of solar generation in West Virginia.

FE's Capital Spending Strengthens Rate Base

FirstEnergy deployed $2.9 billion of capital through the first half of 2026, up 19% year over year. Total transmission rate base grew 14%, including increases of 22% in Integrated and 11% in Stand-Alone Transmission.

Cash and cash equivalents as of June 30, 2026, were $63 million compared with $57 million as of Dec. 31, 2025. 

Long-term debt increased to $27.1 billion as of June 30, 2026, from $25.51 billion at year-end 2025. Short-term borrowings also climbed to $1.38 billion from $325 million.

FE and its subsidiaries maintain investment-grade ratings across all three major credit rating agencies.

FE’s 2026 Guidance

FirstEnergy reaffirmed its 2026 core earnings guidance of $2.62 to $2.82 per share. 

The Zacks Consensus Estimate for 2026 is currently pegged at $2.73 per share.

FirstEnergy remains on track to invest $6 billion in 2026 under its Energize365 program. The company also maintained its $36 billion capital plan for 2026-2030 and continues to expect core earnings growth near the top end of its 6-8% target range through 2030.

FE’s Zacks Rank

FirstEnergy currently has a Zacks Rank #4 (Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Duke Energy DUK is scheduled to report second-quarter results on Aug. 4, before the market opens. The Zacks Consensus Estimate for earnings is pegged at $1.29 per share, which suggests a year-over-year increase of 3.20%.

DUK’s long-term (three to five years) earnings growth rate is 6.76%. The Zacks Consensus Estimate for 2026 earnings is pinned at $6.72 per share, which implies a year-over-year improvement of 6.50%.

Consolidated Edison ED is slated to report second-quarter results on Aug. 6, after market close. The Zacks Consensus Estimate for earnings is pegged at 74 cents per share, which implies a year-over-year increase of 10.45%.

ED’s long-term earnings growth rate is 6.32%. The Zacks Consensus Estimate for 2026 earnings is pinned at $6.09 per share, which implies a year-over-year improvement of 6.84%.

PPL Corporation PPL is scheduled to report second-quarter results on Aug. 7, before the market opens. The Zacks Consensus Estimate for earnings is pegged at 35 cents per share, which implies a year-over-year growth of 9.38%.

PPL’s long-term earnings growth rate is 7.52%. The Zacks Consensus Estimate for 2026 earnings is pinned at $1.94 per share, which implies a year-over-year improvement of 7.18%.

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