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Firstenergy (FE) Slips To 4Q Loss, Meets Estimates

 February 25, 2013 10:13 AM
 


(By Balaseshan) FirstEnergy Corp. (NYSE: FE) has slipped to a quarterly loss due to adjustment for pension and other post-employment benefits actuarial assumptions. Revenue missed consensus, while adjusted earnings came in line with Street's expectations.

Net loss for the fourth quarter was $148 million or $0.35 per share, compared to a profit of $99 million or $0.23 per share in the previous year quarter.

Adjusted earnings per share (EPS) rose to $0.80 from $0.77. Adjusted results benefited from lower operating costs, higher distribution deliveries and increased investment income. Results were negatively affected by lower sales margins and a higher effective income tax rate.

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Revenue decreased to $3.5 billion from $3.9 billion.

Analysts, on average, polled by Thomson Reuters had expected a profit of $0.80 per share on revenue of $4.60 billion for the fourth quarter.

Industrial deliveries in the quarter decreased 3%, while commercial deliveries were essentially flat and residential deliveries increased 5% largely due to cooler weather.

The company's competitive subsidiary, FirstEnergy Solutions, expanded its retail customer count by 42% in the year, growing from about 1.9 million customers at the end of 2011 to nearly 2.6 million at the end of 2012.

FirstEnergy Solutions also grew direct retail sales by 18% in the year. In the fourth quarter, sales margins benefited from the execution of the company's retail strategy, but these gains were offset by a decrease in capacity revenues due to lower capacity prices.

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Looking ahead into the fiscal 2013, the company reaffirmed its adjusted EPS guidance of $2.85 to $3.15, while Street predicts $2.98.

FE is trading up 0.22% at $40.63 on Monday. The stock has been trading between $39.18 and $51.14 for the past 52 weeks.

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