Dive Brief:
- FirstEnergy Corp. reported first quarter earnings of $222 million, or 53 cents/share, compared with $208 million a year before, and said residential power sales were flat.
- Revenue for the quarter was $3.9 billion, compared with $4.2 billion a year ago.
- The company's strong results reflect transmission investments, colder weather and a more conservative competitive strategy.
Dive Insight:
On its regulated distribution side, FirstEnergy said its operating earnings decreased slightly due to increased benefit costs and depreciation expenses, which offset higher revenues from distribution. Total distribution sales increased less than 1% compared to 2014, reflecting colder weather and growth in customer base, though energy efficiency also lowered deliveries.
The company said residential sales were flat, while commercial and industrial deliveries each increased by less than 1%.
"Our strong results this quarter reflect the benefits of our transmission investments, colder weather, and our more conservative competitive strategy," Charles Jones, FirstEnergy president and CEO, said in the company's earnings statement.
The Pittsburgh Post-Gazette reported that during the company's earnings call, Jones said the company reduce load obligations to about 68 million MWh of electricity this year, compared to 99 million MWh last year, and could buy power to supply its customers.
During the call, Jones said the strategy involves "selling no more than we produce in order to maintain an open position of at least 10 million to 20 million megawatt hours annually to protect against extreme weather, unplanned outages or a combination of both."
Jones confirmed the company's 2015 operating earnings guidance of $2.40/share to $2.70/share, and gave second quarter guidance of 42 cents/share to 50 cents/share. "We continue to position the company for stable, customer-driven, regulated growth," he said.
FirstEnergy also launched an initiative to reduce operating and maintenance expenses and capital expenditures by $200 million by 2017. "This plan is designed to appropriately address our cost structure and improve our balance sheet over time, while maintaining strong service for our customers and preserving jobs, employee benefits and wages," Jones said.