FirstEnergy Corp. (FE) Bundle
A Brief History of FirstEnergy Corp.
FirstEnergy Corp. is a diversified energy company headquartered in Akron, Ohio, operating through various subsidiaries that provide electricity to customers in the Midwest and Mid-Atlantic regions of the United States. The company was formed in 1997 through the merger of Ohio Edison Company and Centerior Energy Corporation. Over the years, FirstEnergy has expanded its operations through strategic acquisitions, becoming one of the largest investor-owned electric utilities in the U.S.
Key Milestones
- 1997: Formation of FirstEnergy Corp. through the merger of Ohio Edison and Centerior Energy.
- 2000: Acquisition of GPU, Inc., expanding FirstEnergy's service area into Pennsylvania and New Jersey.
- 2011: Acquisition of Allegheny Energy, further enhancing its footprint in the region.
- 2020: Launch of a strategic initiative to transition to cleaner energy sources, including investments in renewable energy.
Financial Performance in 2024
As of September 30, 2024, FirstEnergy reported a net income of $831 million, compared to $984 million in the same period in 2023. The company's revenues increased to $10.296 billion in 2024 from $9.724 billion in 2023, marking a 6% growth.
| Financial Metrics | 2024 (9 Months) | 2023 (9 Months) | Change (%) |
|---|---|---|---|
| Net Income (in millions) | $831 | $984 | -15.5% |
| Total Revenues (in millions) | $10,296 | $9,724 | 5.9% |
| Earnings per Share (EPS) | $1.25 | $1.66 | -24.8% |
Operational Overview
FirstEnergy operates through several segments, including Distribution, Integrated, and Stand-Alone Transmission. The Distribution segment is the largest, contributing significantly to the overall revenue. In the first nine months of 2024, the Distribution segment generated $5.232 billion in revenue, slightly down from $5.239 billion in 2023.
| Revenue by Segment (in millions) | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Distribution | $5,232 | $5,239 | -0.1% |
| Integrated | $3,725 | $3,250 | 14.6% |
| Stand-Alone Transmission | $1,381 | $1,275 | 8.3% |
Investments and Capital Expenditures
FirstEnergy has continued to invest heavily in infrastructure and capital projects, with cash used for investing activities amounting to $2.961 billion in the first nine months of 2024, compared to $2.473 billion in 2023.
| Capital Investments (in millions) | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Distribution Segment | $758 | $662 | 14.5% |
| Integrated Segment | $1,045 | $824 | 27.0% |
| Stand-Alone Transmission Segment | $875 | $747 | 17.1% |
Debt and Financing Activities
As of September 30, 2024, FirstEnergy's total long-term debt stood at $23.744 billion, compared to $24.254 billion at the end of 2023. In the first nine months of 2024, the company raised $1.2 billion through new unsecured notes while repaying $1.710 billion in long-term debt.
| Debt Metrics (in millions) | 2024 | 2023 |
|---|---|---|
| Carrying Value of Long-Term Debt | $23,744 | $24,254 |
| Fair Value of Long-Term Debt | $23,113 | $23,003 |
FirstEnergy's operational strategies and financial performance indicate a company committed to navigating the evolving energy landscape while managing its legacy debt and investing in future growth.
A Who Owns FirstEnergy Corp. (FE)
Major Shareholders
As of 2024, the ownership structure of FirstEnergy Corp. is characterized by both institutional and retail investors, as well as significant non-controlling interests.
| Shareholder Type | Percentage Owned | Number of Shares | Notes |
|---|---|---|---|
| Institutional Investors | 78.4% | 451,000,000 | Includes major funds such as Vanguard Group and BlackRock. |
| Retail Investors | 21.6% | 125,000,000 | Includes individual shareholders and smaller investment groups. |
| Brookfield Asset Management | 49.9% (in FET) | N/A | Acquired additional interest in FET through a $3.5 billion transaction in March 2024. |
| FirstEnergy Corp. | 50.1% (in FET) | N/A | Retained ownership interest post Brookfield transaction. |
Recent Transactions Affecting Ownership
On March 25, 2024, FirstEnergy completed the sale of a 30% equity interest in its subsidiary, FirstEnergy Transmission (FET), to Brookfield Asset Management, increasing Brookfield's stake in FET from 19.9% to 49.9%. This transaction totaled $3.5 billion, which included the issuance of promissory notes and cash payments.
Financial Overview
FirstEnergy's total assets as of September 30, 2024, were reported at $50.756 billion, with total liabilities of $37.064 billion. The company's common stockholders' equity stood at $12.427 billion, with non-controlling interest amounting to $1.265 billion.
Dividend Policy and Shareholder Returns
FirstEnergy has been actively returning value to its shareholders. In March 2024, the board declared a dividend increase to $0.425 per share, reflecting a 6% increase compared to the previous year.
Shareholder Structure Summary
As of the latest financial reports, FirstEnergy's shareholder structure is as follows:
| Category | Detail |
|---|---|
| Total Shares Outstanding | 576,317,004 |
| Market Capitalization | $12.3 billion (approx.) |
| Current Share Price | $21.33 (approx.) |
| Common Stock Dividend (2024) | $0.425 per share |
Conclusion
Ownership of FirstEnergy Corp. is concentrated among institutional and retail investors, with significant influence from Brookfield Asset Management following its recent acquisition of a substantial interest in FET. The company continues to focus on shareholder returns through dividends and strategic growth initiatives.
FirstEnergy Corp. (FE) Mission Statement
Corporate Mission
Corporate Mission
The mission of FirstEnergy Corp. is to deliver reliable energy and exceptional service to its customers while ensuring a sustainable and clean energy future. The company focuses on enhancing the quality of life in the communities it serves through investment in infrastructure, technology, and employee engagement.
Financial Performance Overview
In the third quarter of 2024, FirstEnergy reported earnings attributable to the company from continuing operations of $419 million or $0.73 per share, compared to $421 million or $0.74 per share in the same period of 2023.
For the first nine months of 2024, FirstEnergy's revenues totaled $10.296 billion, marking a 6% increase from $9.724 billion in the same period of 2023.
Customer Engagement and Sustainability Goals
FirstEnergy's commitment to customer engagement includes a focus on sustainable practices and reducing greenhouse gas emissions. The company aims to achieve carbon neutrality by 2050.
Distribution Services
Distribution services by customer class for the three months ended September 30, 2024, are summarized below:
| Customer Class | 2024 MWh Deliveries | 2023 MWh Deliveries | Percentage Change |
|---|---|---|---|
| Residential | 15,415 | 14,954 | 3.1% |
| Commercial | 10,680 | 10,471 | 2.0% |
| Industrial | 13,630 | 13,345 | 2.1% |
| Total Electric Distribution | 39,725 | 38,770 | 2.5% |
Investment and Capital Expenditures
Cash used for investing activities in the first nine months of 2024 amounted to $2.961 billion, an increase of $488 million compared to the same period in 2023.
Debt Management and Financing Activities
FirstEnergy raised $1.2 billion through unsecured notes in 2024, with total financing activities generating $1.4 billion.
Dividend Policy
On March 2024, FirstEnergy's Board declared a quarterly common stock dividend of $0.425 per share, reflecting an approximate 6% increase from the previous year.
Climate Strategy
FirstEnergy's climate strategy includes a commitment to reduce Scope 1 greenhouse gas emissions and enhance the reliability and security of its electric system.
Liquidity and Financial Stability
As of September 30, 2024, FirstEnergy's total liquidity was approximately $5.9 billion, with cash and cash equivalents amounting to $290 million.
Regulatory Compliance and Governance
FirstEnergy continues to enhance its governance and compliance practices, ensuring alignment with regulatory requirements and stakeholder expectations.
How FirstEnergy Corp. (FE) Works
Company Overview
FirstEnergy Corp. (FE) operates as a diversified energy company, primarily involved in the generation, transmission, and distribution of electricity. The company serves over 6 million customers across the Midwest and Mid-Atlantic regions of the United States.
Financial Performance
For the nine months ended September 30, 2024, FirstEnergy reported the following financial metrics:
| Metric | 2024 (in millions) | 2023 (in millions) | Change |
|---|---|---|---|
| Revenues | $10,296 | $9,724 | $572 (6%) |
| Operating Expenses | $(8,534) | $(8,026) | $(508) (6%) |
| Income Taxes | $(294) | $(193) | $(101) (52%) |
| Earnings from Continuing Operations | $717 | $948 | $(231) (24%) |
| Earnings per Share (Basic) | $1.25 | $1.66 | $(0.41) |
Cash Flows
FirstEnergy's cash flow statements for the nine months ended September 30, 2024, reflect significant activity:
| Cash Flow Activity | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Cash from Operating Activities | $1,847 | $429 |
| Cash Used for Investing Activities | $(2,961) | $(2,473) |
| Cash from Financing Activities | $1,400 | $1,982 |
Segment Performance
FirstEnergy operates through three primary segments: Distribution, Integrated, and Stand-Alone Transmission. Below is a summary of segment revenues and operating expenses:
| Segment | Revenues (2024 in millions) | Operating Expenses (2024 in millions) |
|---|---|---|
| Distribution | $5,232 | $4,497 |
| Integrated | $3,725 | $3,105 |
| Stand-Alone Transmission | $1,381 | $743 |
Debt and Equity Structure
As of September 30, 2024, FirstEnergy’s total debt and equity structure is as follows:
| Type | Amount (in millions) |
|---|---|
| Short-term Borrowings | $75 |
| Long-term Debt | $21,603 |
| Total Equity | $13,692 |
Dividend Policy
In March 2024, FirstEnergy announced a quarterly common stock dividend of $0.425 per share, reflecting a 6% increase compared to 2023. The dividend payments are subject to declaration by the Board of Directors and depend on business conditions and earnings growth.
Capital Investments
FirstEnergy's capital investments for the first nine months of 2024 totaled $2,736 million, compared to $2,266 million for the same period in 2023, indicating a focus on infrastructure and operational improvements:
| Segment | Capital Investments (2024 in millions) | Capital Investments (2023 in millions) |
|---|---|---|
| Distribution | $758 | $662 |
| Integrated | $1,045 | $824 |
| Stand-Alone Transmission | $875 | $747 |
| Corporate/Other | $58 | $33 |
Regulatory Environment
FirstEnergy operates under strict regulatory oversight, impacting its operational and financial strategies. The company is actively engaged in regulatory proceedings to optimize rates and improve service delivery.
Climate Strategy
FirstEnergy is committed to reducing its greenhouse gas emissions and achieving carbon neutrality by 2050. The company's climate strategy includes investments in renewable energy and modernization of the electric grid to support a transition to cleaner energy sources.
Recent Developments
In 2024, FirstEnergy raised $7 billion in equity capital and issued $1.5 billion in convertible notes to enhance its balance sheet and sustain its investment plan, which focuses on infrastructure improvements and operational efficiency.
How FirstEnergy Corp. (FE) Makes Money
Revenue Streams
FirstEnergy Corp. generates revenue primarily through three segments: Distribution, Integrated, and Stand-Alone Transmission. For the nine months ended September 30, 2024, the total revenues were $10,296 million, an increase of 6% from $9,724 million in the same period of 2023.
| Revenue Source | 2024 (in millions) | 2023 (in millions) | Increase (Decrease) |
|---|---|---|---|
| Distribution Services | $5,232 | $5,239 | $(7) |
| Integrated Services | $3,725 | $3,250 | $475 |
| Stand-Alone Transmission | $1,381 | $1,275 | $106 |
| Other Revenues | $104 | $110 | $(6) |
| Total Revenues | $10,296 | $9,724 | $572 |
Distribution Segment
The Distribution segment primarily earns money from retail generation and distribution services. The revenues from this segment for the nine months ended September 30, 2024, stood at $5,232 million, slightly down from $5,239 million in 2023.
Integrated Segment
The Integrated segment's revenues increased significantly to $3,725 million in 2024 from $3,250 million in 2023. This rise can be attributed to higher customer usage and demand, particularly due to favorable weather conditions.
Operating Expenses
Operating expenses for the first nine months of 2024 totaled $8,534 million, compared to $8,026 million in 2023, marking an increase of $508 million. The main components of these expenses included:
| Operating Expense Type | 2024 (in millions) | 2023 (in millions) | Increase (Decrease) |
|---|---|---|---|
| Fuel | $372 | $439 | $(67) |
| Purchased Power | $2,999 | $3,173 | $(174) |
| Other Operating Expenses | $3,275 | $2,698 | $577 |
| Provision for Depreciation | $1,178 | $1,088 | $90 |
| General Taxes | $915 | $881 | $34 |
| Total Operating Expenses | $8,534 | $8,026 | $508 |
Net Income
FirstEnergy Corp.'s net income for the first nine months of 2024 was reported at $831 million, a decline from $984 million in 2023. This decrease is attributed to higher operating expenses and a civil penalty related to SEC investigations.
Earnings Per Share
Earnings attributable to FirstEnergy Corp. from continuing operations for the nine months ended September 30, 2024, were $717 million, translating to earnings per share of $1.25 compared to $948 million or $1.66 per share in 2023.
Cash Flow Analysis
FirstEnergy's cash provided from operating activities was $1.8 billion for the first nine months of 2024, a substantial increase from $429 million in the same period of 2023. This increase is primarily due to lower payments on generation energy purchases and higher net transmission revenue collection.
Capital Investments
For the first nine months of 2024, cash used for capital investments was $2,961 million, an increase of $488 million compared to the same period in 2023. This reflects FirstEnergy's commitment to enhancing its infrastructure and services.
| Cash Flow Activity | 2024 (in millions) | 2023 (in millions) | Increase (Decrease) |
|---|---|---|---|
| Cash from Operating Activities | $1,847 | $429 | $1,418 |
| Cash Used for Investing Activities | $(2,961) | $(2,473) | $(488) |
| Cash from Financing Activities | $1,400 | $1,982 | $(582) |
Debt Management
FirstEnergy's financing activities included new issues totaling $1,200 million in 2024, while redemptions and repayments amounted to $1,710 million, reflecting the company’s focus on managing its debt effectively.
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Article updated on 8 Nov 2024
Resources:
- FirstEnergy Corp. (FE) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of FirstEnergy Corp. (FE)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View FirstEnergy Corp. (FE)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.