10-Q · July 23, 2026
PG&E posted flat Q2 operating revenue of $5.902 billion but materially stronger profitability, with diluted EPS rising to $0.33 from $0.24 and operating margin expanding to 21.4% from 18.6% year over year. The earnings…
Earnings analysis · 10-Q
PCG earnings analysis
Filed October 22, 2026 · Our reading of the company's report
The latest report
PG&E delivered mixed third-quarter results: revenue fell 1% year over year to $6.188 billion, but operating income rose 3% to $1.249 billion and diluted EPS improved sequentially to $0.34 while declining from $0.37 a…
Read full summary
PG&E delivered mixed third-quarter results: revenue fell 1% year over year to $6.188 billion, but operating income rose 3% to $1.249 billion and diluted EPS improved sequentially to $0.34 while declining from $0.37 a year earlier. Cash generation weakened, with nine-month operating cash flow down 11% to $6.262 billion and approximate free cash flow of negative $3.359 billion after $9.621 billion of capital expenditures. Regulatory recovery proposals and $5.8 billion of liquidity are supportive, but wildfire exposure, higher debt, potential Wildfire Fund amortization of up to $3.7 billion, and the revised capital plan remain significant constraints.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
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.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.34
- Segment
- Single reportable segment: Utility; electric revenue $4.660 billion, down $95 million (2%) year over year; natural-gas revenue $1.528 billion, up $33 million (2%) year over year.
What stood out
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Revenue broadly stable year over year
Third-quarter operating revenue was $6.188 billion, down 1% from $6.250 billion a year earlier but above the prior quarter's $5.9 billion. Electric revenue declined $95 million (2%) year over year, while natural-gas revenue increased $33 million (2%).
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Operating income grew despite lower revenue
Operating income increased to $1.249 billion from $1.209 billion year over year, while operating margin was approximately 20.2%, versus 19.3% a year earlier and 21.4% in the prior quarter.
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EPS improved sequentially, declined annually
Diluted EPS was $0.34, compared with $0.37 in the year-ago quarter and $0.33 in the prior quarter. Income available to common shareholders declined 9% year over year to $749 million, primarily reflecting higher interest expense and wildfire fund expense.
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Heavy investment drove negative free cash flow
Nine-month operating cash flow was $6.262 billion, down $757 million (11%) from $7.019 billion a year earlier. Capital expenditures were $9.621 billion, producing approximate free cash flow of negative $3.359 billion.
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Liquidity remains substantial
Liquidity was approximately $5.8 billion at September 30, 2026, comprising $339 million of Utility cash, $563 million of PG&E Corporation cash, and $4.9 billion of revolving-credit availability.
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Regulatory recovery decisions provide support
The CPUC's September 2026 proposed decision would authorize recovery of approximately $1.8 billion of wildfire-mitigation costs, while the 2027 GRC proposed decision would authorize $456 million of interim rate recovery effective January 1, 2027.
What to watch
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Potential multibillion-dollar wildfire amortization
Management expects to re-evaluate the Wildfire Fund's estimated 20-year life after the Eaton fire disclosures and could reduce the estimated life to zero, resulting in up to $3.7 billion of accelerated amortization. Third-quarter Wildfire Fund expense increased 64% year over year to $141 million.
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Wildfire cost disallowance risk
The September 2026 WGSC proposed decision would disallow approximately $477 million of requested costs, including approximately $291 million of capital expenditures permanently excluded from rate base. The decision remains subject to CPUC review and modification.
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Wildfire liabilities remain material
The Utility recorded aggregate liabilities of $2.25 billion for the 2021 Dixie fire and $475 million for the 2022 Mosquito fire as of September 30, 2026. Potential federal fire-suppression and land-damage claims are excluded from these amounts and could be significant.
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Leverage and financing costs increased
Long-term debt increased to $54.729 billion at the Utility from $51.766 billion at December 31, 2025, while third-quarter interest expense increased 5% year over year to $729 million. The Utility's unsecured credit rating remains below investment grade with one major rating agency.
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Structural external financing dependence
Operating cash flow fell 11% to $6.262 billion while capital expenditures rose $990 million year over year to $9.621 billion. Management states that capital expenditures, debt maturities, and PG&E Corporation dividends are expected to exceed operating cash flows, requiring continued capital-market financing.
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Strategic review creates capital-plan uncertainty
The strategic review withdrew the prior 2028–2030 capital-expenditure forecast and reduced 2027 planned spending from $13.4 billion to $11.4 billion. The review is evaluating regulatory, financial, operational, organizational, and financing alternatives, increasing planning uncertainty.
Management's outlook
No numeric revenue or EPS guidance was provided. The strategic review reduced planned 2027 capital expenditures from $13.4 billion to $11.4 billion and withdrew the previously disclosed 2028–2030 capital-expenditure forecast. Management forecasts 2026 capital expenditures of $12.4 billion and 2027 capital expenditures of $11.4 billion; further changes remain possible.
Earlier filings 4
10-Q · April 23, 2026
PG&E reported a stronger quarter with consolidated Utility operating revenues of $6,881 million (up 15% YoY) and Utility operating income of $1,478 million (up 20% YoY), driving Utility net income of $954 million (up…
10-K · February 12, 2026
PG&E emphasizes a regulated, customer-driven strategy focused on safety, decarbonization and a Lean operating model while committing to heavy grid investment. Management recorded $13.4 billion of capital expenditures in…
10-K · February 13, 2025
The 2024 Form 10-K emphasizes PG&E’s focus on safety, a customer-driven investment program and its Lean operating model while disclosing continued wildfire, regulatory and liquidity risks. Reported trailing 12-month…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.