Diversified energy company FirstEnergy Corp. FE reported third-quarter 2015 operating earnings of 97 cents per share, outpacing the Zacks Consensus Estimate of 86 cents by 12.8%. Earnings also improved 8.9% year over year.

The upside was driven by higher earnings at all three segments – Regulated Transmission, Regulated Distribution and Competitive Energy Services.

Including one-time items totaling 4 cents, FirstEnergy’s GAAP earnings were 94 cents per share, up 18.9% year over year.

Total Revenue

FirstEnergy generated total revenues of $4.1 billion in the third quarter of 2015, beating the Zacks Consensus Estimate of $3.9 billion by 5.1%. Revenues also increased 5.1% year over year.

The top-line growth was driven by warmer temperatures and the impact of rate case approvals.

Highlights of the Release

FirstEnergy's total electric distribution deliveries were 1,048,000 megawatt-hours (“MWH”) in the reported quarter, up 2.8% year over year. The increase was due to higher weather-related usage.

FirstEnergy’s total expenses in the third quarter were $3,235 million, up 3.6% from $3,122 million reported in the third quarter of 2014.

For third-quarter 2015, FirstEnergy reported an operating income of $887 million, up 15.3% year over year.

Interest expenses in the reported quarter were $285 million, reflecting a 3.6% increase from $275 million a year ago.

Financial Update

FirstEnergy's cash and cash equivalents were $86 million as of Sep 30, 2015, up from $85 million as of Dec 31, 2014.

Cash from operating activities in the quarter was $1,327 million, comparing favorably with $1,115 million generated in the year-ago quarter.

Long-term debt and other long-term obligations as of Sep 30, 2015, were $19,093 million, down from $19,176 million at 2014 end.

Guidance

FirstEnergy raised the 2015 operating earnings projection to the range of $2.67–$2.75 per share from $2.40–$2.70 per share earlier.

Upcoming Peer Releases

Eversource Energy ES is slated to release third-quarter results on Nov 3, 2015. The Zacks Consensus Estimate is 75 cents.

Alliant Energy Corporation LNT is slated to release third-quarter results on Nov 5, 2015. The Zacks Consensus Estimate is $1.58.

Duke Energy Corporation DUK is slated to release third-quarter results on Nov 5, 2015. The Zacks Consensus Estimate is $1.52.

Zacks Rank

FirstEnergy carries a Zacks Rank #3 (Hold).

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