FirstEnergy announces third quarter 2012 earnings

AKRON, Ohio, Nov. 8, 2012 /PRNewswire/ — FirstEnergy Corp. (NYSE: FE) today announced third quarter 2012 earnings of $1.11 per basic and diluted share of common stock on a non-GAAP* basis.  These results exclude the impact of special items listed below.  This compares to non-GAAP earnings of $1.39 per basic and diluted share in the third quarter of 2011. 

On a GAAP basis, third quarter 2012 earnings were $1.02 per basic share of common stock ($1.01 diluted) on net income of $425 million and revenue of $4.3 billion.  Third quarter 2011 GAAP earnings were $1.27 per basic and diluted share on net income of $530 million, with revenue of $4.7 billion. 

The company also announced that it is narrowing 2012 non-GAAP earnings guidance to $3.30 to $3.40 per share, which is the lower end of the previous range of $3.30 to $3.60 per share.  The company also provided 2013 non-GAAP earnings guidance of $2.85 to $3.15 per share.

“We continue to be very pleased with the progress of our retail strategy and we remain confident that FirstEnergy will be well-positioned for growth when the economy eventually recovers,” said FirstEnergy President and Chief Executive Officer Anthony J. Alexander.  “We are taking a number of actions to manage our expenses and ensure that we are operating as cost-effectively as possible in light of the continued weak sales environment and low market prices for power.”

Third quarter 2012 non-GAAP results benefited from a reduction in operating costs, interest expense and depreciation expense, as well as lower gross receipts taxes.  Results were negatively affected by reduced sales margins from competitive operations, lower distribution deliveries, and a higher effective income tax rate.

Total distribution deliveries decreased 4 percent in the quarter. Residential deliveries declined by 4 percent, primarily due to milder weather compared to the third quarter of 2011. Commercial deliveries decreased 3 percent, while industrial deliveries decreased 5 percent.

While FirstEnergy Solutions (FES) continues to successfully expand its business and customer base, commodity margin decreased compared to the third quarter of 2011 due to the absence of a third quarter 2011 benefit related to fuel contract restructuring and the impact of lower capacity prices.  These factors offset higher contract sales volumes. 

For the first nine months of 2012, net income was $919 million, or earnings of $2.20 per basic share of common stock ($2.19 diluted), on revenue of $12.3 billion.  This compares to net income of $770 million, or earnings of $2.01 per basic share of common stock ($2.00 diluted) on revenue of $12.4 billion in the first nine months of 2011. 

 






















GAAP to Non-GAAP* Reconciliation

               
   

Third Quarter

Nine Months

Ended Sept 30

Full Year

Full Year

 
   

2012

2011

2012

2011

2012

2013

 

Basic Earnings Per Share (GAAP)

 

$1.02

$1.27

$2.20

$2.01

$2.27-$2.51

$2.64-$2.94

 

Excluding Special Items:

               

 Regulatory Charges

 

0.03

0.06

0.05

0.08

0.06

 

 Trust Securities Impairment

 

0.01

0.01

0.03

0.01

 

 Income Tax Charge –Retiree

  Drug Change

 

0.02

0.06

0.08

 

Merger Transaction/Integration

  Costs

 

0.01

0.02

0.41

0.02

 

Impact of Non-Core Asset

 Sales/Impairments

 

0.02

0.08

0.05

 

Mark-To-Market Adjustments –

               

  Pension/OPEB actuarial

     assumptions

 

0.45-0.59 

 

  Other

 

(0.03)

0.01

(0.08)

0.06

(0.08)

 

Plant Closing Costs

 

0.04

0.16

0.19

0.01

 

Restructuring Costs

 

0.02

0.01

 

Merger Accounting-

 Commodity Contracts

 

0.03

0.06

0.10

0.18

0.12

0.08

 

Litigation Resolution

 

0.01

0.06

 

Basic Earnings Per Share (Non-GAAP*)

 

$1.11

$1.39

$2.53

$2.88

$3.30-$3.40

$2.85-$3.15