Timing clarification: FirstEnergy is scheduled to release second-quarter results after the market closes today, Tuesday, July 28, 2026. The earnings call is tomorrow, Wednesday, July 29, at 9:00 a.m. EDT.
The quarter’s EPS number matters, but the more consequential questions concern the durability—and potential expansion—of FirstEnergy’s long-term capital plan.
FE entered the quarter with solid operating momentum: first-quarter core EPS rose 7.5%, formula-rate investments were producing double-digit transmission rate-base growth, and management reaffirmed both its 2026 guidance and long-term growth target. The central debate now is whether data-center demand and West Virginia generation can add meaningful upside without creating affordability, regulatory, or financing problems.
The cleanest positive outcome would be:
| Metric | Current reference point |
|---|---|
| 2026 core EPS guidance | $2.62–$2.82 |
| Guidance midpoint | $2.72 |
| 1Q26 core EPS | $0.72, up 7.5% YoY |
| 2Q25 core EPS comparison | $0.52 |
| 2026 capital plan | $6.0 billion |
| 1Q26 capital deployed | $1.4 billion, up 33% YoY |
| 2026–2030 capital plan | $36 billion |
| Planned rate-base CAGR | Approximately 10% |
| Long-term core EPS growth | Near the top of 6%–8% |
| Trailing consolidated earned ROE at 1Q26 | 9.8% |
| 2035 contracted data-center demand at 1Q26 | 4.3 GW |
| 2035 contracted plus pipeline demand | 19.1 GW |
| Latest available FE close, July 27 | $49.33 |
FE had earned $0.72 in the first quarter, leaving $1.90–$2.10 per share to achieve its full-year guidance. Management previously said most of the remaining year-over-year growth would materialize in the second half. That makes the guidance commentary and quarterly cadence more important than a small Q2 beat or miss.
The baseline expectation should be an affirmation of the $2.62–$2.82 core EPS range. A guidance reduction would be a meaningful disappointment given the strong first quarter and management’s confident April commentary.
Investors should focus on:
A result around the prior-year Q2 core EPS of $0.52 could still be consistent with the annual plan if management preserves the second-half outlook. Conversely, a Q2 beat driven by temporary weather or expense timing would be less valuable than improved rate-base earnings and sustainable cost savings.
At the end of Q1, FE showed:
That last point creates a clear test for this report. A substantial increase in contracted demand would improve confidence that FE’s data-center opportunity is translating from requests and studies into investable projects.
Questions for management include:
The market should assign much more value to contracted projects with strong customer protections than to conceptual load studies.
FE is pursuing a 1.2 GW combined-cycle natural gas plant and 70 MW of solar generation in West Virginia, with an estimated total investment of roughly $2.7 billion. Regulatory hearings were scheduled for July 16–17, and management previously expected a decision during the second half of 2026, potentially early in the fourth quarter.
Management has said approval could increase company-wide rate-base growth from just over 10% to just over 11%. It would therefore represent the most visible source of upside beyond the current $36 billion plan.
Investors need an update on:
FE previously indicated that new equity could fund up to roughly 35% of the generation investment, depending partly on the treatment of construction financing costs. The project may be earnings-accretive over time, but the amount and timing of equity will determine the per-share benefit.
The core investment case remains FE’s regulated wires program rather than speculative load growth. In Q1:
FE needs to demonstrate that its $6 billion 2026 capital program remains on schedule despite equipment lead times, tariffs, labor constraints and industry-wide demand for transmission components.
A particularly favorable result would include continued double-digit transmission rate-base growth without material capital-cost inflation or delays. Management may also discuss additional PJM Open Window opportunities. FE has been awarded more than $5 billion of competitive transmission projects over the past several years, although its existing-system replacement needs remain the larger and more dependable opportunity.
Base O&M was down approximately 5% in Q1. Management characterized much of the improvement as sustainable, reflecting automation, data-driven maintenance, organizational simplification and movement of resources closer to individual business units.
The Q2 report should help establish whether those savings are durable. Investors should separate:
Sustainable O&M discipline is especially important because it supports earnings while helping FE make its large investment plan more acceptable to regulators and customers.
FE operates across several jurisdictions, making regulatory execution a central part of the equity story.
Items to monitor include:
FE’s average customer rates have remained below many in-state peers, giving management some room to invest. However, sharply higher PJM capacity costs and political concern about data-center demand make bill impacts increasingly important.
The $36 billion capital program requires substantial external financing. At the end of Q1, FE had:
First-quarter operating cash flow fell to $148 million from $637 million, reflecting Ohio customer refunds, storms, purchased-power costs and working-capital timing. Many of those pressures were temporary or recoverable, but investors should look for normalization in Q2.
Key balance-sheet questions are:
FE ended Q1 with approximately $1.27 billion of storm-related regulatory assets, including a substantial amount that was not earning a current return. Storm deferrals protect near-term earnings but can pressure cash flow and increase future customer bills.
JCP&L was discussing a potential $44 million penalty related to historical reliability performance. The amount is manageable relative to the enterprise, but the matter could affect regulatory relations and the timing of future rate relief.
Higher interest expense partially offset regulated growth in Q1. FE’s capital plan can still support EPS growth, but rising debt costs or greater-than-planned equity issuance would weaken the conversion of rate-base growth into per-share earnings.
Investigation and litigation expenses remained a special item in Q1, reducing GAAP results by approximately $0.04 per share relative to core EPS. Legal matters connected to legacy Ohio conduct remain unresolved, so the difference between GAAP and core earnings remains relevant.
Data centers improve load growth and create investment opportunities, but they also intensify concerns about generation adequacy and customer bills. The bullish case depends on FE demonstrating that large-load customers pay their full incremental costs.
Through the July 27 close, FE had gained approximately 10% year to date, versus about 7% for the Utilities Select Sector SPDR Fund. Since the Q1 release, however, FE was roughly flat and only modestly ahead of the utility sector.
That suggests expectations are constructive but not obviously euphoric. A routine EPS beat with unchanged guidance may produce a limited reaction. The larger stock-moving variables are likely to be:
FE enters Q2 with a credible regulated-growth story: a $36 billion five-year capital plan, approximately 10% expected rate-base growth, improving credit quality and a long-term EPS target near the upper end of 6%–8%.
The report will be judged less on whether quarterly EPS beats by a few cents and more on whether management can prove that the next layer of growth is becoming real. The decisive disclosures will be contracted data-center load, the West Virginia generation path, capital-plan execution and the financing required to fund incremental investment.
If those pieces advance while 2026 guidance remains intact, the long-term thesis should strengthen. If the load pipeline remains largely prospective or requires substantially more equity and regulatory risk, investors may become less willing to capitalize the upside ahead of actual project approvals.