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FirstEnergy's Third Quarter Earnings Report
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FirstEnergy (NYSE:FE) announced its results for the most recent quarter on November 8, 2012. FirstEnergy is a diversified energy company that operates through its subsidiaries: OE, CEI, TE, Penn, ATSI, JCP&L, Met-Ed and Penelec.
In most situations, when earnings do not meet analyst estimates, a business' stock price will tend to drop. On the other hand, when actual earnings beat estimates by a significant amount, the share price will likely surge. SEE: 12 Things You Need To Know About Financial Statements
The Numbers: FirstEnergy managed to beat EPS estimates, though the company's revenues failed to top expectations. The company reported adjusted net income of $1.11 per share versus the $1.06 per share estimate and revenues of $4.31 billion versus the $5.19 billion estimate. Revenue fell 8.6% from the same period last year. Revenue declined last quarter after shrinking 4.7% to $3.87 billion in the second quarter. FirstEnergy reported profit of $425 million during the third quarter. According to the reported number, this is down 19.8% from last year's figures.
Management Quote: "We continue to be very pleased with the progress of our retail strategy and we remain confident that FirstEnergy will be well-positioned for growth when the economy eventually recovers," said FirstEnergy President and Chief Executive Officer Anthony J. Alexander. "We are taking a number of actions to manage our expenses and ensure that we are operating as cost-effectively as possible in light of the continued weak sales environment and low market prices for power."
Looking Ahead: Analysts have a more positive outlook for the company's next-quarter performance. Over the past month, the average estimate for the fourth quarter has gone up from 76 cents per share to 86 cents. When analyst increase earnings estimates investors can assume business has been stronger than first thought and is an encouraging sign for investors. At $3.37 per share, the average estimate for the fiscal year has fallen from $3.39 90 days ago.
In most situations, when earnings do not meet analyst estimates, a business' stock price will tend to drop. On the other hand, when actual earnings beat estimates by a significant amount, the share price will likely surge. SEE: 12 Things You Need To Know About Financial Statements
The Numbers: FirstEnergy managed to beat EPS estimates, though the company's revenues failed to top expectations. The company reported adjusted net income of $1.11 per share versus the $1.06 per share estimate and revenues of $4.31 billion versus the $5.19 billion estimate. Revenue fell 8.6% from the same period last year. Revenue declined last quarter after shrinking 4.7% to $3.87 billion in the second quarter. FirstEnergy reported profit of $425 million during the third quarter. According to the reported number, this is down 19.8% from last year's figures.
Looking Ahead: Analysts have a more positive outlook for the company's next-quarter performance. Over the past month, the average estimate for the fourth quarter has gone up from 76 cents per share to 86 cents. When analyst increase earnings estimates investors can assume business has been stronger than first thought and is an encouraging sign for investors. At $3.37 per share, the average estimate for the fiscal year has fallen from $3.39 90 days ago.
by
Investopedia Staff
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