Will FirstEnergy (FE) Stock React Positively to Its Earnings Results?

NEW YORK (TheStreet) -- FirstEnergy Corp. (FE) is scheduled to release its 2014 third quarter earnings results before the market open on Tuesday, and analysts are expecting the diversified energy company to report an increase in earnings per share and revenue for the most recent quarter.

Analysts have forecast for earnings of 88 cents per share on revenue of $4.12 billion for the latest quarter.

For the 2013 third quarter FirstEnergy reported earnings per share on a GAAP basis of 52 cents and revenue of $4 billion.

Shares of FirstEnergy are up by 0.03% to $37.35 in late afternoon trading on Monday.

Separately, TheStreet Ratings team rates FIRSTENERGY CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate FIRSTENERGY CORP (FE) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, good cash flow from operations, impressive record of earnings per share growth and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electric Utilities industry. The net income increased by 139.0% when compared to the same quarter one year prior, rising from -$164.00 million to $64.00 million.
  • Net operating cash flow has significantly increased by 61.17% to $714.00 million when compared to the same quarter last year. In addition, FIRSTENERGY CORP has also vastly surpassed the industry average cash flow growth rate of -14.71%.
  • FIRSTENERGY CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, FIRSTENERGY CORP reported lower earnings of $0.90 versus $1.80 in the prior year. This year, the market expects an improvement in earnings ($2.50 versus $0.90).
  • FE, with its decline in revenue, slightly underperformed the industry average of 5.3%. Since the same quarter one year prior, revenues slightly dropped by 0.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Electric Utilities industry and the overall market on the basis of return on equity, FIRSTENERGY CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • You can view the full analysis from the report here: FE Ratings Report

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