FirstEnergy Corp. (FE) posted third-quarter adjusted of $1.11 per share, topping the Zacks Consensus Estimate by 9 cents. The better-than-expected results were driven by reduced costs, improved efficiencies and increased share in the generation business. However, earnings in the quarter were below $1.59 reported a year ago, primarily due to a weak economy and mild weather.
Net revenue in the quarter decreased 13% year over year to $3.4 billion, hurt by reduced demand for electricity during the recession.
Total electric distribution deliveries decreased 10%, compared to last year, with residential and commercial deliveries declining 8% and 6%, respectively, mainly due to mild weather. Industrial deliveries slipped 16% on weak economy. Total electric generation sales in the quarter were down 11% year-over-year, with retail sales down 11% and wholesale sales down 10%.
Despite declining consumption, FirstEnergy benefited from its cost reduction efforts during the quarter. Total expenses for the quarter were down $137 million to $2.9 billion, reflecting lower labor and benefit costs, the use of fewer contractors and other cost control measures. The company also profited from higher rates in Ohio.
Given the economic downturn and the uncertainty regarding recovery, FirstEnergy narrowed its full-year earnings guidance to a range of $3.70 to $3.80 per share, from $3.70 to $3.85 previously.
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