FirstEnergy's Q2 2026 GAAP EPS rose to $0.50 from $0.46 on 8.8% higher revenue of $3.68B as 2025 one-off charges fell away, but Core EPS slipped to $0.50 from $0.52 as transmission growth was offset by mild weather and planned maintenance; 2026 guidance of $2.62–$2.82 reaffirmed.
Revenue
$3.7B
+8.8% YoY
Net income
$288M
+7.5% YoY
Diluted EPS
$0.50
+8.7% YoY
Operating margin
18.4%
Overview
FirstEnergy, the Ohio-based utility that delivers electricity to more than 6 million customers in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland and New York, earned $288 million (GAAP), or $0.50 per share, in the second quarter of 2026. That compares with $268 million, or $0.46, a year earlier. Revenue rose 8.8% to $3.68 billion.
The GAAP increase comes mostly from one-offs in last year's quarter, not from a stronger business. On FirstEnergy's own "Core" measure, which strips out special items, earnings per share fell to $0.50 from $0.52. The company says this was in line with its plan. The two measures differ because Q2 2025 carried $0.06 per share of special charges, including $24 million of debt-redemption costs and reorganization costs. Q2 2026's special items netted to zero: $0.04 of HB6 investigation and litigation costs was offset by pension/OPEB credits (OPEB means retiree health and other non-pension benefits) and an asset-retirement-obligation reduction.
Beneath both measures the pattern is simple. Transmission earnings grew fast. Distribution, the local wires business in Ohio and Pennsylvania, went backwards because of milder weather, higher planned maintenance spending and higher interest costs.
Key metrics — Q2 2026
Metric
Q2 2026
Q2 2025
YoY Change
Total revenue
$3,678M
$3,380M
+8.8%
Operating income
$677M
$646M
+4.8%
Operating margin
18.4%
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Operating margin is the share of revenue left after running the business, before interest and tax. For a utility it is partly an accounting artifact: much of the revenue is power bought on customers' behalf and passed straight through at cost.
First half of 2026: revenue $7,880M (+10.3% vs. $7,145M), GAAP earnings $693M (+10.4% vs. $628M), GAAP EPS $1.20 vs. $1.09, and Core EPS $1.22 vs. $1.19 (+2.5%).
Why revenue grew faster than profit
Most of the $298 million revenue increase does not reach the bottom line. Purchased power costs rose $204 million. The 10-Q says these costs "have no material impact to earnings". Higher auction prices for customers who buy power from the utility (instead of a competing supplier) raise revenue and cost by roughly the same amount. The same is true of fuel, transmission congestion charges and most state-mandated program costs, which are deferred and recovered later. So the 8.8% revenue growth overstates the business's momentum, and the slight fall in operating margin to 18.4% mostly reflects this pass-through mix rather than weaker profitability.
The income line that does track underlying growth is transmission revenue, which rose 22% to $686 million. Transmission revenue is set by formula rates tied to the value of the grid assets FirstEnergy has built (its "rate base"), so more capital spending produces more revenue.
Segment performance
Segment (earnings attributable to FE)
Q2 2026
Q2 2025
Change
H1 2026
H1 2025
Distribution (Ohio, Pennsylvania)
$143M
$161M
-$18M
$389M
$379M
Integrated (NJ, WV, MD)
$123M
$116M
+$7M
$276M
$252M
Stand-Alone Transmission
$97M
$75M
+$22M
$188M
$156M
Corporate/Other
-$75M
-$84M
+$9M
-$160M
-$159M
Total
$288M
$268M
+$20M
$693M
$628M
Distribution (-$18M): The 10-Q attributes the decline to "lower customer usage as a result of the milder weather temperatures, higher planned other operating expenses, and higher net financing costs". The absence of last year's Ohio Stipulation customer credits and higher pension credits partly offset it. Other operating expenses included $28 million more of planned maintenance. Distribution-services revenue fell $41 million. Part of that fall is the ~$275 million of Ohio customer restitution and refunds ordered by the PUCO (the Public Utilities Commission of Ohio), which were booked as a charge in Q4 2025 and are now passing through revenue with no 2026 earnings effect. The earnings release puts the segment's Core EPS down $0.06 and calls the maintenance "in line with our plan".
Integrated (+$7M): Higher transmission revenue from a larger rate base, plus annual formula-rate true-ups and higher customer demand, drove the gain. Segment revenue jumped $173 million, but most of that was pass-through purchased power (+$112M) and financial transmission rights credits. Storm restoration expense rose $40 million, and the 10-Q says it was "mostly deferred for future recovery". According to the release, transmission rate base in this segment grew 22%, which planned maintenance offset, leaving Core EPS flat.
Stand-Alone Transmission (+$22M): Revenue rose $88 million to $544 million. The largest gains came from the ATSI (+$40M) and MAIT (+$36M) subsidiaries, driven by rate base growth (+11% per the release) and true-ups. One detail matters for shareholders: Brookfield owns 49.9% of FirstEnergy Transmission (FET), so part of this segment's profit belongs to Brookfield. That share (noncontrolling interest) rose 28% to $64 million this quarter. Transmission growth therefore reaches FirstEnergy shareholders at roughly half weight for the FET assets.
Corporate/Other: Losses narrowed by $9 million. Last year's $24 million debt-redemption charge did not recur, but higher investigation and litigation costs and interest on convertible notes offset much of that benefit.
Sales volumes: Weather-adjusted deliveries rose 1.5%, all of it from industrial customers (+4.4%, which the 10-Q attributes to manufacturing growth). Weather-adjusted residential deliveries were flat and commercial fell 0.7%.
Takeaway: FirstEnergy's GAAP EPS gain (+8.7%) comes from last year's one-time charges dropping out. Core EPS actually fell 3.8%, because weather and deliberately higher maintenance spending in Ohio and Pennsylvania outweighed strong transmission growth. First-half Core EPS of $1.22 is close to half of the $2.62–$2.82 full-year range, so the year is on track. The earnings now come overwhelmingly from transmission and the capital plan, while the traditional distribution business is flat to down until new Ohio and New Jersey rates arrive.
Rate cases: where things stand
Utility earnings are set largely by regulators, so the rate-case calendar matters:
Ohio (last case decided): The PUCO's November 2025 order approved a net base-rate increase of about $34 million at a 9.63% return on equity (the profit rate regulators allow on shareholders' investment). It also forced a $352 million pre-tax write-off of previously capitalized costs in 2025. Rehearing was granted in January 2026. The company "does not expect material changes" to the order. New depreciation rates from the case took effect March 1, 2026.
Ohio (new case): On May 22, 2026, the Ohio companies filed a three-year rate plan seeking base-revenue increases of about $254 million, $59 million and $80 million in successive years beginning July 1, 2027, at a 10.2% ROE. Evidentiary hearings begin March 1, 2027. This is the main lever for the lagging Distribution segment, but it does not help until mid-2027.
Ohio legacy items: The PUCO-ordered ~$275 million of restitution and refunds is nearly complete, with ~$266 million issued by June 30. On July 21, 2026, a settlement with PUCO staff (unopposed by the consumer counsel) stipulated no significantly excessive earnings for 2021–2024. A hearing is set for August 11, 2026.
West Virginia: On May 15, 2026, Mon Power and Potomac Edison asked for a $188.4 million (~10.6%) increase, or alternatively two phased steps of $37.9 million (August 2026) and $37.6 million (June 2027). The 10-Q expected an order by the end of July 2026, after the quarter covered here. Separately, they are seeking approval for the Maidsville Energy Center (a 1,200 MW gas plant plus 70 MW of solar, about $2.7 billion), with a decision expected in the second half of 2026.
New Jersey: JCP&L expects to file a base rate case in August 2026.
Maryland: Potomac Edison plans a base rate filing in Q3 2026, with new rates expected in Q1 2027. Maryland's new Utility RELIEF Act (signed May 12, 2026) limits forecasted-cost ratemaking, removes certain earnings incentives and assigns grid-upgrade costs for large customers like data centers to those customers. FirstEnergy says it is still assessing the impact on timing and authorized returns.
Pennsylvania: FE PA continues to operate under rates effective January 1, 2025. The filing reports no new base case this quarter.
Data centers and demand
According to the earnings release (Exhibit 99.1 to the July 28, 2026 8-K), contracted plus pipeline data center demand rose 30% since the first quarter, with 6.4 GW contracted. West Virginia demand rose 137% to 4.3 GW. The 10-Q itself makes the more modest point that 2026 volumes grew only in the industrial class so far. This is a large pipeline of future load, not demand that shows up in current sales yet. The Maidsville plant and the transmission build-out are how FirstEnergy plans to earn a return on it.
Capital plan and financing
Energize365 is the company's grid investment program, now $36 billion for 2026–2030. That is about 25% above the prior five-year plan by the 10-Q's count (the release says "nearly 30%"). The planned split is 28% Distribution, 35% Integrated and 35% Stand-Alone Transmission. FirstEnergy (through FET) also holds shares of PJM-awarded regional transmission projects: about $1 billion via Valley Link and about $448 million via Grid Growth.
Spending: Cash capital investments were $2.6 billion in H1 2026 vs. $2.2 billion, per the cash-flow statement. The release cites $2.9 billion deployed against a $6 billion 2026 plan.
Cash flow squeeze: Operating cash flow fell to $1.14 billion from $1.72 billion in H1. The 10-Q cites the Ohio refunds, higher storm costs, Winter Storm Fern-related power costs and the timing of transmission collections. That gap, plus spending, was funded with debt. Short-term borrowings rose to $1.38 billion from $325 million at year-end, and FE took a new $750 million term loan in April. FE PA issued $850 million of senior notes in March. The remaining $294 million of 2026 convertible notes was settled on May 1 for about $325 million in cash. Liquidity was $4.9 billion as of July 27, and the interest-coverage covenant stood at about 4.2x against a 2.5x minimum.
Equity and credit: FirstEnergy may issue common stock averaging about 1% of its market value per year through 2030. Moody's moved FE's outlook to positive in March 2026. Quarterly interest expense rose to $337 million from $299 million.
Legal overhang: HB6
The Ohio House Bill 6 bribery scandal is still producing costs. Investigation and related costs were a $0.04-per-share special item this quarter, up from $0.03, and $0.08 year-to-date. The 2021 Deferred Prosecution Agreement's three-year term was completed in July 2024, but FirstEnergy must keep cooperating until the related prosecutions, including the January 2025 indictment of two former senior officers, conclude. The biggest open risk is the securities class action. The court recertified the class on April 30, 2026, and FE has petitioned the Sixth Circuit to appeal. FirstEnergy states it is "probable that it will incur a loss" in this case and in related opt-out suits, but "cannot yet reasonably estimate a loss or range of loss". No reserve has been disclosed, so a settlement or judgment remains an unquantified liability.
Outlook
Management reaffirmed 2026 Core EPS guidance of $2.62–$2.82 and long-term Core EPS growth "near the top end of 6% to 8%" from 2026 to 2030. With $1.22 earned in H1 (about 45% of the midpoint), hitting the range depends on normal weather and a seasonally strong third quarter, which is plausible given the first half's pace.
Our read: The earnings story is increasingly a transmission-and-capex story. Transmission segment earnings rose 29% in the quarter, while distribution is paying for maintenance and interest ahead of rate relief that does not arrive in Ohio until mid-2027. The 6–8% growth target depends on regulators granting timely recovery on a $36 billion plan. It also depends on debt markets, since operating cash flow is falling while debt rises, and on the class action being resolved at a manageable cost. Watch the West Virginia rate order and Maidsville decision, the JCP&L filing in August, the Sixth Circuit's handling of the class-certification appeal, and whether Maryland's new law dents Potomac Edison's allowed returns.
Source: FirstEnergy Corp. Form 10-Q for the quarter ended June 30, 2026 (filed July 28, 2026). Core EPS, segment Core EPS changes, rate base growth percentages, data center demand figures and the $2.9 billion capital deployment figure are from the company's Q2 2026 earnings release (Exhibit 99.1 to Form 8-K, July 28, 2026). Core EPS is a non-GAAP measure.