Aug. 9, 2014, 8:25 AM
- Investors who had flocked to utility stocks now may be wondering what went wrong, after the sector was the S&P's worst performer in July.
- Fears of rising interest rates have recently sent dividend-paying stocks and high-yield junk bonds tumbling; utility stocks also have been hurt by the power sector's growing exposure to volatile natural gas prices, which have dropped ~19% since mid-June.
- Some analysts think dividend growth among utilities could slow or even stop, with power demand falling and utilities being forced to spend record amounts on replacing and upgrading aging plants and meeting stricter emission standards; Exelon (NYSE:EXC) and FirstEnergy (NYSE:FE) are big utilities that have cut dividends this year.
- Utilities that auction the power they generate - and are most exposed to moves in gas prices - have fallen the most; NRG and EXC have lost 20% and 13%, respectively, since the end of June.
- Regulated utilities such as Southern Co. (NYSE:SO) and Duke Energy (NYSE:DUK), whose rate changes are more closely controlled, haven't been hit as hard.
- ETFs: XLU, IDU, VPU, NLR, JXI, NUCL, UPW, RYU, DBU, IPU, FUTY, FXU, SDP, UTLT
Aug. 5, 2014, 11:29 AM
- FirstEnergy (FE +1.2%) moves higher despite a drop in Q2 operating earnings due to higher expenses and investments in maintenance, as it continues to increase reliance on regulated companies.
- Q2 sales to residential customers fell 2%, while deliveries to commercial customers rose 1% and sales to industrial customers climbed 2%.
- Operating earnings from the distribution business fell, primarily due to an increased focus on maintenance and vegetation management work this year.
- For H1, FE's net income was $0.65/share on sales revenues of nearly $7.7B, vs. H1 2013 net income of $0.08/share on revenues of $7.2B.
- The results come a day after the company filed a new rate plan with state regulators which included an unusual provision to allow FE's regulated Ohio distribution companies to buy all of the power, on a cost basis, generated by two of the company's large Ohio-based power plants.
Aug. 5, 2014, 8:33 AM
Aug. 4, 2014, 5:30 PM
- ACM, ACT, ADM, AEE, AKRX, ALLT, AME, AMSC, ANSS, ARCC, ARCO, ARQL, BCRX, BLMN, CIE, CLDT, CNK, COH, CRZO, CVC, CVS, DWRE, EMR, END, ENZY, EXH, EXLP, EXPD, FE, FUN, GLDD, GTIV, GTXI, HCLP, HCP, HEP, IART, IFF, IIVI, INFI, IT, KWK, LIN, LPX, MDU, MGM, MMP, MSI, MWW, MZOR, NILE, NNN, [[NTi]], NVDQ, NWN, ODP, OXF, OZM, PMC, RBA, REGN, RHP, RIGL, RTI, SCMP, SCOR, SMG, SNSS, SPAR, STE, TDG, VMC, VSI, VTG, WLK, WNR, ZBRA, ZTS
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.
Jul. 15, 2014, 12:07 PM
Jul. 9, 2014, 3:54 PM
- More than 244K homes and businesses in the U.S. Mid-Atlantic states remain without power after severe thunderstorms rolled through the region overnight.
- Pipeline operator Buckeye Partners (BPL +0.9%) says its Laurel refined products pipeline from Boothwyn, Pa., near Philadelphia, was shut due to a power failure.
- Exelon's (EXC -0.1%) PECO utility in the metro Philly area says the storm affected 260K customers, with ~43K still without power.
- Power also remains out for ~95K First Energy (FE +0.1%) customers.
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 23, 2014, 6:35 PM
- Regional transmission organization PJM says its recent auction to procure power supplies for 2017-18 resulted in a clearing price for resources - which includes generation, annual demand response and energy efficiency - which rose to $120/MW-day for most of its deliverability area.
- PJM, which coordinates the movement of wholesale electricity in all or parts of 13 states and D.C., says the auction continued an overall trend toward more gas-fired generation and increasing diversity of resources.
- PPL, Exelon (EXC), American Electric Power (AEP), Duke Energy (DUK), Dominion Resources (D) and FirstEnergy (FE) are all up ~1% AH.
- Earlier, Barclays downgraded the entire electric sector of the U.S. high-grade corporate bond market to underweight, saying it sees long-term challenges to electric utilities from solar energy which aren't yet priced in.
- ETFs: XLU, LQD, IDU, VPU, CORP, CFT, UPW, FUTY, RYU, FXU, QLTA, SDP, IGHG, COBO, IGS, CBND, IGU, QLTB
May 16, 2014, 5:03 AM
- The White House is considering forcing power plants to cut carbon emissions by 25% over a 15-year period, Bloomberg reports.
- The problem is that owners can only cut so much of a facility's emissions by increasing efficiency, so a lot of the reduction could have to come by "going outside the fence," such as by deepening the use of renewable energy, improving grid efficiency and encouraging customers to use less electricity.
- Trying to compel operators to rely on such external measures could run afoul of what the government is allowed to do under the Clean Air Act.
- ETFs: KOL, XLU, IDU, VPU, RYU, PUI, UPW, FXU, SDP, PSCU, FUTY, UTLT
- Coal Tickers: PCXCQ, BTU, WLT, CNX, ACI, ANR, JRCC, YZC, ARLP, AHGP, NRP, PVR, PVG, PVA, OXF, CLD, WLB, RNO
- Utilities: ED, POM, PEG, FE, NST, UTL, ETR, EXC, D, NU, PCG, DUK
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.
May 6, 2014, 8:32 AM
May 5, 2014, 5:30 PM
- ACM, ACOR, AER, AKRX, AME, ARCC, ARCO, ARW, BCE, BCS, CBOE, CNK, COCO, CRTO, CRZO, CYNO, DISCA, DNR, DTV, DWRE, EMR, EXH, EXLP, FE, GDP, GLDD, HCP, HFC, HPT, HSH, HSIC, HTH, IFF, ISIS, KWK, MMP, MNTA, MONT, MOS, MPW, MSO, MVIS, MWIV, NRG, [[NTi]], NUS, ODP, OXF, PDCE, PQ, PRIM, RDC, RHP, RTI, RTRX, STWD, TDG, TGH, TPH, TW, UBS, VMC, VSH, VTG, WCG, WNR, XRAY, ZBRA, ZTS.
Mar. 18, 2014, 1:52 PM
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. 25, 2014, 8:32 AM
FE vs. ETF Alternatives
FirstEnergy Corp. is the holding, directly or indirectly, of all of the outstanding common stock of its principal subsidiaries. It is a diversified energy company dedicated to safety, reliability and operational excellence.
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