Yesterday, 11:44 AM
- FirstEnergy (FE -1.6%) is downgraded to Sell from Neutral with a $31 price target, cut from $36, at Goldman Sachs, which sees shares coming under pressure as FE's above-market, non-regulated hedges expire and the company faces competition.
- Goldman forecasts below consensus EPS estimates by ~6% for 2018, greater than expected headwinds for FE’s non-regulated segment as above-market hedges expire, and balance sheet and credit risk as debt/EBITDA metrics at the non-regulated business weaken given lower earnings power.
- The firm also expects FE to issue equity worth $1.2B, representing ~8% of the current market cap during 2016-19, amid significant financing needs.
Fri, Jul. 22, 12:58 PM
- FirstEnergy (FE +1.6%) says it will shut down or sell some of the operations at two of its coal-fired generation plants in Ohio.
- FE plans to either sell or deactivate its 136 MW Bay Shore Unit 1 in Oregon, Ohio, and retire four units of its W.H. Sammis Plant in Stratton, Ohio.
- FE had hoped to obtain some subsidies for its older coal-fired power plants from the state's Public Utilities Commission, but the FERC rejected the plan after environmental groups opposed; FE now says the plants are too small to compete in today’s market.
Tue, May 24, 5:58 PM
- NRG Energy (NYSE:NRG), Dynegy (NYSE:DYN) and FirstEnergy (NYSE:FE) are lower AH by -3%, -1.5% and -0.3% respectively following the results of PJM Interconnection's latest auction.
- PJM says its "second auction with stringent pay-for-performance standards attracted a significant amount of new resources at competitive prices to the PJM footprint," as it procured ~167.3K MW in the auction to ensure electricity capacity for the June 2019-May 2020 delivery year; the clearing price was $100/MW-day for the majority of the 13-state PJM region vs. the $164.77 rate set during last year's auction.
- Prices were lower than some analysts had expected and lower than last year's auction results due to market fundamentals of changes in supply and demand, PJM says.
Thu, Apr. 28, 10:33 AM
- FirstEnergy (FE -11.4%) and American Electric Power (AEP -2.5%) are sharply lower after the FERC decides to review income guarantee agreements, which means the deals are not valid unless the two companies apply for and receive federal approval.
- The federal ruling pre-empts the ruling by Ohio's public utilities commission, which had considered for nearly two years plans to raise rates to subsidize some older coal-fired and nuclear power plants before unanimously approving them last month.
- "The decision is a disappointing and unfortunate intrusion by FERC into Ohio’s ability to protect its retail customers from market volatility and plan for the state’s generation needs,” AEP says.
- Competing electric utility Dynegy (DYN +3.3%) praises the FERC decision, saying the proposals accepted by Ohio regulators were "exorbitantly priced."
- Now read FirstEnergy beats by $0.05 and American Electric Power misses by $0.03, misses on revenue
Thu, Apr. 28, 9:16 AM| Thu, Apr. 28, 9:16 AM
Apr. 1, 2015, 12:26 PM
- Dynegy (DYN -2.1%) and NRG Energy (NRG -5.6%) are sharply lower after the FERC declined to approve a capacity performance plan submitted by the PJM Interconnection consortium and asked for answers to additional questions about the initiative.
- PJM operates a wholesale electricity market in the eastern U.S.; DYN is involved in the PJM and is looking to boost its share within the Regional Transmission Organization with proposed asset purchases, and a small part of NRG's capacity is within PJM.
- Deutsche Bank analyst Jonathan Arnold notes that FERC did not reject the proposal, but says FERC's action prolongs uncertainty for investors in the electric utilities that belong to PJM, which also include Exelon (EXC -1.8%), Public Service Enterprise (PEG -1.9%), American Electric (AEP +0.2%), PPL (PPL -0.4%) and FirstEnergy (FE -1.3%).
Jul. 30, 2014, 12:53 PM
- FirstEnergy (FE -1.6%) is downgraded to Sell from Neutral with a $26 price target, down from $31, at UBS, which sees the halo effect from the rally in power and gas as having faded.
- While investors can look through its distressed IPP business - which is itself a liability - UBS sees continued distribution rate filings as a broad overhang, justifying a discount to peers.
- The firm believes the M&A bid from which many peers have benefited does not apply for FE.
May 27, 2014, 2:30 PM
- The utility sector is among the day's best performers after the annual capacity auction at PJM Interconnection, which runs the largest U.S. power grid, forecasts payments to electricity producers will jump to $120/MW-day vs. $59.37 in the previous 12-month period and expectations of $75-$100.
- The higher capacity price is a boon to power producers, which rely on the payments as baseline revenues; the auction results are viewed as another endorsement of natural gas.
- The outlook is particularly favorable for Exelon (EXC +3.9%) and FirstEnergy (FE +6%), according to S&P's Aneesh Prabhu; PPL Corp. (PPL +2.9%) also benefits, especially considering that the price in its region was expected to fall.
- The price for Public Service Electric & Gas' (PEG -0.2%) utility territory in northern New Jersey was set at $215/MW-day, down from $219 a year earlier.
- ETFs: XLU, IDU, VPU, DBE, RJN, UPW, FUTY, RYU, PUI, FXU, JJE, SDP, ONG, RGRE, UBN
May 8, 2014, 8:44 AM
- FirstEnergy (FE) +3.8% after Jefferies upgrades shares to Buy from Hold and raises its target price to $37 from $31 despite Q1 earnings that fell by nearly half from the prior-year quarter.
- January shutdowns of two large power plants amid icy weather and the inability to buy gas forced FE to buy power on the regional grid as wholesale market prices were soaring; power purchases over the quarter cut EPS by $0.23.
- In its upgrade, Jefferies says it views FE as a regulated utility with a free option on recovery of power prices; the firm expects merchant free cash flow to be positive by 2017 while providing only a nominal contribution to EBITDA and earnings.
Feb. 25, 2014, 9:56 AM
- FirstEnergy (FE -1.6%) swung to a Q4 profit but revenue missed expectations and the power company issued downside guidance for Q1 earnings.
- FE says Q4 operating earnings benefited from higher distribution revenues, higher regulated generation operating margin, and increased investment income and lower interest expense compared to the prior-year period.
- Q4 distribution deliveries rose 4% Y/Y, largely due to colder temperatures compared to the year-ago quarter, which drove a 3% increase in sales to both residential and commercial customers.
- Sees Q1 EPS of $0.35-$0.45 vs. $0.63 analyst consensus estimate, but issues in-line guidance for FY 2014, seeing EPS of $2.45-$2.85 vs. $2.69 consensus.
Feb. 19, 2014, 11:31 AM
- FirstEnergy (FE +1.6%) says it plans to spend more than $475M this year to improve the infrastructure for its Ohio electric utility, more than double last year's improvements in the Ohio Edison service territory which covers more than 1M customers.
- FE says it will build new substations, begin work on a new 100-mile transmission line and install new technology in its facilities, among other things; ~$344M will go toward transmission-related projects built and owned by FE entity American Transmission Systems.
Jan. 21, 2014, 5:43 PM
- FirstEnergy (FE) -1.7% AH after offering 2014 earnings guidance that was mostly lower than analysts' expectations.
- FE says it expects FY 2014 operating EPS of $2.45-$2.85 vs. $2.82 analyst consensus and narrows 2013 operating EPS guidance to $2.95-$3.05 vs. $2.97 consensus and prior $2.90-$3.10.
- Also cut its quarterly dividend to $0.36/share after paying $0.55/share since 2008.
Nov. 11, 2013, 3:59 PM
- FirstEnergy (FE -5.9%) is planning to spend another $2.8B in the next five years to upgrade its Ohio and western Pennsylvania high-voltage power lines and equipment, projecting that the rebuilding will lead to a 20% annual growth in its transmission net income.
- Coming on top of $700M in upgrades already planned, the massive rebuilding is part of FE's larger plan to close old power plants and to rein in the company's unregulated subsidiary.
- Moody's says FE's transmission-focused investment strategy that calls for the use of the company's equity as a major funding source is a credit positive, but not sufficient to trigger a revision in its current negative outlook.
Oct. 8, 2013, 1:04 PM
- Defense is working nicely today as the utility sector (XLU +1.4%) makes a strong move higher with the rest of the market lit up bright red. Few have had use for the steady dividend payers since rates started rising in May, but the sector has stabilized over the past month and is particularly well-bid today amid panicky action in high-flying momentum favorites.
- Some individual names: Southern Company (SO +1.9%), Edison International (EIX +1.9%), Duke Energy (DUK +1.6%), FirstEnergy (FE +1.5%), XCel Energy (XEL +2.1%), American Electric Power (AEP +1.6%).
- Related ETFs: IDU, PUI, XLU, VPU, RYU, FXU, PSCU, UPW, SDP, UTLT.
Jul. 5, 2013, 10:58 AM
May 30, 2013, 11:17 AM
Utilities are getting a bit of a reprieve after taking a beating over the past few days. Option implied volatility has been increasing as investors rotate out of high dividend yield positions in the wake of a rise in treasury yields: AEE +1.7%, D +0.3%, DTE +1.9%, EIX +0.6%, ETR +1.3%, EXC +0.7%, FE +0.9%, NEE +1.7%, PEG +0.8%, PPL +0.5%, SRE +1.3%, TE +0.5%, AEP +0.8%, DUK +0.6%, ED NU +1.6%, PCG +1.2%, SO +0.4%, XEL +1.3%.| May 30, 2013, 11:17 AM | 5 Comments