Infrastructure

FirstEnergy Reports Falling Demand (FE, AEP)

power-lines-imageFirstEnergy Corporation (NYSE:FE) reported 2008  EPS of $4.38, higher than anticipated EPS of $4.33. Revenue for the year also beat expectations, coming in at $14.6 billion compared with average estimates of $14.51 billion.  What may be more interesting than the earnings is the trends in usage.

The company saw an overall decrease in electricity sales of 2.5% from 2007 to 2008. In the fourth quarter, retail sales dropped 4.8% and wholesale sales dropped 3.4%. Distribution deliveries fell 1.9% for the year and 4% for the fourth quarter on lower demand from industrial customers.

FirstEnergy’s performance is nearly identical with that of American Electric Power Corporation (NYSE:AEP). AEP reported 2008 EPS of $3.43, and guided 2009 EPS to $3.00-$3.40. FirstEnergy did not provide guidance, but falling demand for electricity, especially from industrial customers does not inspire confidence.

Analysts had early 2009 EPS estimates for FirstEnergy at $4.73. Barring a significant turnaround in demand, that does not seem likely. Shares in FirstEnergy are up about 1.25% in early trading.

Paul Ausick
February 24, 2009

Get Ready To Retire (Sponsored)

Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.

Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.

Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future

Get started right here.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.