FirstEnergy Corp. (NYSE:FE) Q3 2023 Earnings Conference Call October 27, 2023 9:00 AM ET

Company Participants

Irene Prezelj - Vice President, Investor Relations and Communications

Brian Tierney - President and Chief Executive Officer

Jon Taylor - Senior Vice President and Chief Financial Officer

Conference Call Participants

Shar Pourreza - Guggenheim Partners

Jeremy Tonet - JPMorgan

Nick Campanella - Barclays

David Arcaro - Morgan Stanley

Angie Storozynski - Seaport Global

Jeremy Tonet - JPMorgan

Anthony Crowdell - Mizuho Securities

Gregg Orrill - UBS

Steve Fleishman - Wolfe Research

Operator

Greetings and welcome to the FirstEnergy Corp. Third Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Irene Prezelj, Vice President, Investor Relations and Communications for FirstEnergy Corp. Thank you. Ms. Prezelj, you may begin.

Irene Prezelj

Thank you. Good morning, everyone and welcome to FirstEnergy’s third quarter 2023 earnings review. Our President and Chief Executive Officer, Brian Tierney, will lead our call today and he will be joined by Jon Taylor, our Senior Vice President and Chief Financial Officer.

Our earnings release, presentation slides and related financial information are available on our website at firstenergycorp.com. Today’s session will include the use of non-GAAP financial measures and forward-looking statements. Factors that could cause our results to differ materially from these statements can be found in our SEC filings. The appendix of today’s presentation includes supplemental information, along with the reconciliation of non-GAAP financial measures.

Now, it’s my pleasure to turn the call over to Brian.

Brian Tierney

Thank you, Irene and good morning everyone. Today, I will discuss third quarter and year-to-date results, some key developments over the last few months and our outlook for the future.

For the third quarter, we delivered GAAP earnings of $0.74 per share versus $0.58 last year. Operating earnings for the third quarter were strong at $0.88 per share at the upper end of our guidance range and compared favorably to $0.79 per share last year. Our financial performance was a result of discipline and operating expenses as well as execution of our regulated capital investment plan to improve system resiliency and reliability.

Also, as previewed on the second quarter call, we realized a tax benefit in the quarter related to a state tax adjustment, which reduced our effective tax rate to 17% for the year-to-date period. Our service territory continued to experience very mild temperatures impacting earnings by $0.06 per share compared to last year. In addition, quarterly results were impacted by lower pension credit and higher financing costs, primarily as a result of higher debt balances used to fund our capital investment program. Through strong execution by our treasury group, our consolidated long-term borrowing rate remained essentially flat.