FirstEnergy Corp. (FE) filed Quarterly Report for the period ended 2009-09-30.
FirstEnergy Corp. is a diversified energy services holding company as the result of the merger of Ohio Edison Company and Centerior Energy Corporation. FirstEnergy companies provide electricity and natural gas services and a wide array of energy-related products and services. FirstEnergy's four electric utility companiesOhio Edison and its Pennsylvania Power subsidiaryThe Illuminating Company and Toledo Edisonserve customers in northern and central Ohio and western Pennsylvania. (Company Press Release) Firstenergy Corp. has a market cap of $12.92 billion; its shares were traded at around $42.39 with a P/E ratio of 10.39 and P/S ratio of 0.95. The dividend yield of Firstenergy Corp. stocks is 5.19%. Firstenergy Corp. had an annual average earning growth of 4.4% over the past 10 years.
Highlight of Business Operations:
Net income in the third quarter of 2009 was $234 million, or basic and diluted earnings of $0.77 per share of common stock, compared with net income of $471 million, or basic earnings of $1.55 per share of common stock ($1.54 diluted) in the third quarter of 2008. Results in the third quarter of 2009 include a loss of $0.30 per share resulting from the redemption of $1.2 billion of our 6.45% notes, partially offset by $0.25 per share of investment income resulting primarily from the sale of securities held in our nuclear decommissioning trust. Net income in the first nine months of 2009 was $768 million or basic earnings of $2.52 per share of common stock ($2.51 diluted), compared with net income of $1.01 billion, or basic earnings of $3.32 per share of common stock ($3.29 diluted) in the first nine months of 2008.
On August 6, 2009, FirstEnergy filed an application for economic stimulus funding with the U.S. Department of Energy under the American Recovery and Reinvestment Act that proposed investing $114 million on smart grid technologies to improve the reliability and interactivity of its electric distribution infrastructure in its three-state service area. The application requested $57 million, which represents half of the funding needed for targeted projects in communities served by the Utilities. On October 27, 2009, FirstEnergy received notice from the Department of Energy that its application was selected for award negotiations. However, no assurance can be given that we will receive any such award.
On August 7, 2009, FES issued 5, 12 and 30-year unsecured senior notes totaling $1.5 billion. The notes bear interest at an annual rate of 4.80%, 6.05% and 6.80%, respectively. Proceeds received from the issuance of the notes were used to pay down borrowings under the $2.75 billion revolving credit facility that FES shares with FirstEnergy and certain other subsidiaries, which made borrowing capacity available to FirstEnergy under the facility to fund a cash tender offer for $1.2 billion of its 6.45% notes, Series B, due 2011. FirstEnergy announced the tender offer on August 4, 2009 and completed it on September 1, 2009. $250 million of the 2011 notes remain outstanding.
On August 18, 2009, CEI issued $300 million of FMB that bear interest at an annual rate of 5.5% and mature on August 15, 2024. A portion of the proceeds will be used to replace $150 million of CEI s 7.43% Series D Secured Notes that mature on November 1, 2009. The remaining proceeds were used to repay a portion of CEI s short-term borrowings.
On September 2, 2009, the Utilities and ATSI voluntarily contributed $500 million to the pension plan. On September 30, 2009, Penelec issued $500 million of unsecured notes, of which $250 million mature in 2020 and $250 million mature in 2038. The 2020 notes and 2038 notes bear interest at an annual rate of 5.20% and 6.15%, respectively.
On October 1, 2009, FGCO and NGC purchased $52.1 million and $29.6 million of PCRBs subject to mandatory purchase. Subject to market conditions, FGCO and NGC plan to remarket the purchased PCRBs in the near future.
FE is in the portfolios of Brian Rogers of T Rowe Price Equity Income Fund, Kenneth Fisher of Fisher Asset Management, LLC, Dodge & Cox.
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