FirstEnergy surges after ditching 2030 climate goal in boost for coal

High voltage towers with thick hanging power cables in a rural landscape in the Netherlands

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FirstEnergy (NYSE:FE) +3.7% in Friday’s trading after reporting better than expected Q4 adjusted earnings while FY 2024 earnings guidance topped Wall Street estimates at the midpoint.

Q4 GAAP earnings swung to a profit of $175M, or $0.30/share, from a GAAP loss of $403M, or $0.71/share, in the year-earlier quarter, while revenues came in flat at $3.2B.

FirstEnergy (FE) said it is abandoning its 2030 target for reducing greenhouse gas emissions because coal plants cannot be replaced in time.

“We’ve identified several challenges to our ability to meet that interim goal, including resource adequacy concerns. Given these challenges, we have decided to remove our 2030 interim goal,” CEO Brian Tierney said on the company’s post-earnings conference call.

The utility’s coal-fired Fort Martin and Harrison power plants in West Virginia are not expected to shut down until 2035 and 2040, respectively.

The company said it cannot meaningfully cut emissions because the two West Virginia coal plants are crucial to ensuring adequate regional electricity supplies, according to a company presentation.

FirstEnergy (FE) also provided guidance for FY 2024 adjusted earnings of $2.61-$2.81/share, above the $2.68 analyst consensus estimate at the midpoint, citing strong growth in its regulated businesses with significantly improved earnings quality from lower planned earnings contributions from legacy investments; for Q1, the company sees adjusted EPS of $0.48-$0.58, below $0.67 consensus.

The company also reaffirmed its long-term 6%-8% target for annual operating EPS growth rate, based off 2023’s guidance midpoint.

William Murphy

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