Akron's FirstEnergy reporting a solid first quarter. The electric utility reporting net income was $306 million on sales of $4.1-billion. That compared to net income of $52-million on sales of $3.6-billion in the first quarter of 2011.
The earnings picture could have been even better, except for the cost of closing the merger with Allegheny Energy.
It was in February of last year that FirstEnergy acquired Allegheny for $4.3-billion, and assumed $3.8-billion in debt.
News Release from FirstEnergy
FirstEnergy Corp. (NYSE: FE) today announced first quarter 2012 basic and diluted earnings of $0.82 per share of common stock on a non-GAAP* basis. This compares to basic and diluted non-GAAP earnings of $0.75 per share of common stock in the first quarter of 2011.
On a GAAP basis, first quarter 2012 basic and diluted earnings were $0.73 per share of common stock on net income of $306 million and revenue of $4.1 billion. First quarter 2011 basic and diluted earnings were $0.15 per share of common stock on net income of $52 million, with revenue of $3.6 billion. Last year's results included charges relating to the closing of the merger with Allegheny Energy, which reduced earnings by $0.43 per basic share.
"While our first quarter results were impacted by unseasonably warm weather, we are pleased with the continued success of our retail strategy, and improving economic conditions – particularly within the Ohio industrial sector," said FirstEnergy President and Chief Executive Officer Anthony J. Alexander. "Based on our continued confidence in our business strategy, we are reaffirming our 2012 and 2013 non-GAAP earnings guidance."
First quarter 2012 non-GAAP results benefited from the earnings contribution from the Allegheny Energy companies, lower operating costs, and reduced interest expense. Results were negatively affected by extremely mild winter weather, which resulted in lower distribution deliveries and contributed to lower commodity margins.
Distribution deliveries, excluding Allegheny Energy deliveries, decreased 4 percent in the quarter due to unseasonable weather compared to the same period of 2011. Residential sales decreased 8 percent, and commercial deliveries decreased 2 percent. Usage by industrial customers was relatively flat, although industrial activity continues to improve in Ohio.
Commodity margin for FirstEnergy Solutions decreased compared to the first quarter of 2011, as higher retail sales resulting from expanding our business and customer base, were offset by increases in transmission expenses, net fuel and purchased power costs, net capacity expenses, lower wholesale sales, a reduction in sales of Renewable Energy Credits, and weather
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