10-Q · April 28, 2026
FirstEnergy reported Q1 2026 consolidated revenue of $4,202 million, up $437 million or 12% versus Q1 2025, and GAAP earnings attributable to FE of $405 million, or $0.70 per share, up $45 million (13%) and $0.08 per…
Earnings analysis · 10-Q
FE earnings analysis
Filed July 28, 2026 · Our reading of the company's report
The latest report
FirstEnergy produced Q2 revenue of $3.678 billion, up 9% year over year, and GAAP EPS of $0.50, up from $0.46; however, operating margin declined to 18.4% from 19.1% and from 19.7% in Q1 2026. Transmission investment…
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FirstEnergy produced Q2 revenue of $3.678 billion, up 9% year over year, and GAAP EPS of $0.50, up from $0.46; however, operating margin declined to 18.4% from 19.1% and from 19.7% in Q1 2026. Transmission investment and formula-rate true-ups were the principal earnings drivers, with Stand-Alone Transmission earnings rising $22 million. The principal offset is weaker cash conversion: first-half operating cash flow fell to $1.137 billion while capital investments reached $2.600 billion, increasing reliance on financing amid regulatory and litigation uncertainties.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
Reported figures
- Earnings per share
- $0.5
What stood out
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Revenue and GAAP EPS increased year over year
Q2 revenue increased $298 million, or 9%, year over year to $3.678 billion. Earnings attributable to FE rose $20 million to $288 million, and GAAP diluted EPS increased to $0.50 from $0.46.
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Transmission delivered strongest earnings growth
Stand-Alone Transmission earnings attributable to FE increased $22 million to $97 million, while segment revenue grew $88 million to $544 million, driven by regulated capital investment, rate-base growth and formula-rate true-ups.
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Integrated segment growth supported earnings
Integrated segment revenue increased $173 million to $1.434 billion and earnings increased $7 million to $123 million. Transmission revenue within the segment rose $38 million to $149 million.
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Capital deployment remains elevated
First-half capital investments totaled $2.600 billion, comprising $791 million in Distribution, $1.006 billion in Integrated, $750 million in Stand-Alone Transmission and $53 million in Corporate/Other, supporting the $36 billion 2026-2030 investment plan.
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Liquidity and covenant headroom remain solid
Available liquidity was $4.884 billion as of July 27, 2026, including $4.812 billion of available revolving-credit capacity and $72 million of cash and cash equivalents. FE's interest-coverage ratio was approximately 4.2x versus its 2.50x minimum covenant.
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Ohio rate filing presents future earnings opportunity
The Ohio Companies filed a three-year rate plan seeking base-distribution revenue increases of approximately $254 million in year one, $59 million in year two and $80 million in year three, with hearings beginning March 1, 2027.
What to watch
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Operating cash flow declined as investment increased
Cash conversion weakened: first-half operating cash flow fell $582 million year over year to $1.137 billion, while investing cash outflow rose $414 million to $2.828 billion. The filing attributes the operating-cash decline to Ohio customer refunds, storm costs, Winter Storm Fern-related costs and working-capital timing.
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Working-capital deficit and short-term funding rose
FirstEnergy had an approximately $2.7 billion working-capital deficit at June 30, 2026, and short-term borrowings increased to $1.376 billion from $325 million at December 31, 2025. FE also fully drew a $750 million term loan due April 27, 2027.
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New Jersey regulatory penalty exposure
JCP&L faces a potential reliability penalty: NJBPU staff indicated it would recommend a $44 million penalty, and JCP&L states that a loss is probable but cannot estimate the final amount. JCP&L also carried approximately $80 million of ZEC refunds still owed to customers at June 30, 2026.
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ATSI ROE-incentive refund obligation
ATSI's estimated obligation to refund its RTO-membership ROE incentive, including interest, totaled approximately $79 million at June 30, 2026. FERC directed removal of the 50-basis-point adder and refunds, with the refund deadline deferred to February 28, 2027.
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Maryland legislation threatens rate recovery
The Maryland Utility RELIEF Act became effective July 1, 2026 and may affect PE's recovery timing, authorized returns, rate structure and investment planning. A related complaint seeks removal and refund of the 50-basis-point RTO ROE adder collected after July 1, 2026.
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No formal risk-factor update; litigation remains
Risk-factor disclosure itself was unchanged: Item 1A states there was no material change from the December 31, 2025 Form 10-K. However, FE says it is probable it will incur losses in HB 6-related securities litigation, for which the loss amount or range remains unestimable.
Management's outlook
The 10-Q contains no explicit consolidated numeric EPS or revenue guidance. Management discusses a $36 billion 2026-2030 Energize365 investment plan, expected annual common-equity issuance averaging approximately 1% of current market capitalization, and proposed regulatory rate actions, but these are not company earnings guidance.
Earlier filings 1
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.