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FirstEnergy (FE) Beats Q3 Earnings Estimates, Lifts '17 View

FirstEnergy Corporation FE reported third-quarter 2017 operating earnings of 97 cents per share, beating the Zacks Consensus Estimate of 86 cents by 12.8%. Quarterly earnings were also up 7.7% year over year.

Moreover, third-quarter earnings exceeded the guidance of 75-90 cents provided by the company during second-quarter 2017.

On a GAAP basis, the diversified energy company reported earnings of 89 cents, in line with the prior-year quarter’s earnings.

Total Revenues

FirstEnergy generated total revenues of $3,714 million in third-quarter 2017, beating the Zacks Consensus Estimate of $3,640 million by 2.04%.

Reported revenues were down 5.5% from $3,917 million reported a year ago. The top line declined primarily due to lower contribution from Competitive Energy Services and Regulated distribution segments.

Highlights of the Release

Total electric sales decreased 2,899 thousand megawatt-hours (MWh) or 7% year over year. Residential sales declined 2,275 thousand MWh or 14.1%, while commercial sales fell 777 thousand MWh or 6.5%.
 
Industrial sales improved 150 thousand MWh or 1.2% primarily on account of higher usage by shale and steel customers.

For the third quarter, FirstEnergy incurred operating expenses of $2,781 million, down 9% from $3,056 million a year ago, primarily due to lower unit cost of fuel and cost of purchased power.

Operating income in the reported quarter was pegged at $835 million, up from $861 million in the prior-year quarter.

Financial Update

FirstEnergy's cash on hand as of Sep 30, was $399 million, up from $199 million as of Dec 31, 2016.

Long-term debt and other long-term obligations as of Sep 30, were $21,089 million compared with $18,192 million as of Dec 31, 2016.

Net cash provided from operating activities was $2,762 million during the first nine months of 2017 compared with $2,592 million in the first nine months of 2016.

Guidance

FirstEnergy has raised the operating earnings guidance for full-year 2017 to the range of $3.00-$3.10 per share from previous expectation of $2.70-$3.00.

Peer Releases

NextEra Energy, Inc  NEE reported third-quarter 2017 operating earnings of $1.85 per share, beating the Zacks Consensus Estimate of $1.75 by 5.71%.

DTE Energy Company DTE reported third-quarter 2017 adjusted earnings of $1.48 per share, missing the Zacks Consensus Estimate of $1.53 by 3.26%.

WEC Energy Group, Inc  WEC reported third-quarter 2017 adjusted earnings of 68 cents per share, compared with the Zacks Consensus Estimate of 67 cents by 1.49%.

Zacks Rank

FirstEnergy currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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