FirstEnergy Earnings: Revenue Slips After Increasing Four Quarters in a Row, Net Income Declines

S&P 500 (NYSE:SPY) component FirstEnergy Corp (NYSE:FE) reported its results for the second quarter. FirstEnergy is a diversified energy company that operates through its subsidiaries: OE, CEI, TE, Penn, ATSI, JCP&L, Met-Ed and Penelec.

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FirstEnergy Corp Earnings Cheat Sheet

Results: Net income for FirstEnergy Corp fell to $187 million (45 cents per share) vs. $203 million (43 cents per share) a year earlier. This is a decline of 7.9% from the year-earlier quarter.

Revenue: Fell 4.7% to $3.87 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: FirstEnergy Corp reported adjusted net income of 59 cents per share. By that measure, the company fell short of mean estimate of 67 cents per share. It fell short of the average revenue estimate of $5.19 billion.

Quoting Management: “Today we are reaffirming our 2012 non-GAAP earnings guidance of $3.30 to $3.60 per share,” said FirstEnergy President and Chief Executive Officer Anthony J. Alexander. “Despite the continued challenges of the sluggish economy and the impact of mild weather on our first half results, we remain confident in our long-term strategies, and we will continue positioning our competitive business for the eventual economic recovery.”

Key Stats:

A year-over-year revenue decrease last quarter breaks a four-quarter streak of revenue increases. The best quarter in that span was the second quarter of the last fiscal year, which saw revenue rise 29.8%.

For two quarters in a row, the company has come in under analyst estimates. In the first quarter, it missed expectations by one cent with net income of 82 cents versus a mean estimate of net income of 83 cents per share.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the third quarter has moved up from $1.17 a share to $1.19 over the last ninety days. At $3.39 per share, the average estimate for the fiscal year has fallen from $3.43 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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