PG&E lifted Q2 2026 GAAP EPS to $0.33 from $0.24 and core EPS to $0.40 on flat $5.9B revenue, helped by rate-base growth, no new wildfire charges and a tax benefit; 2026 core EPS guidance of $1.64-$1.66 reaffirmed.
Revenue
$5.9B
+0.1% YoY
Net income
$733M
+40.7% YoY
Diluted EPS
$0.33
+37.5% YoY
Operating margin
21.4%
Overview
PG&E Corporation, the holding company for Pacific Gas and Electric (the utility serving about 16 million people in Northern and Central California), grew second-quarter 2026 GAAP earnings to $0.33 per diluted share from $0.24 a year earlier, even though revenue was flat at $5.90 billion. The gain came from the cost side and the tax line, not from selling more energy: operating income rose 15% to $1.26 billion, and a tax benefit of $87 million replaced a $20 million tax charge.
Management's preferred measure, non-GAAP "core" earnings (GAAP profit with items it considers one-offs stripped out, chiefly wildfire-related costs), rose to $0.40 per share from $0.31. The company reaffirmed full-year 2026 core EPS guidance of $1.64 to $1.66. Figures below are from the 10-Q for the quarter ended June 30, 2026, filed July 23, 2026.
Key figures
Metric
Q2 2026
Q2 2025
YoY Change
Total operating revenues
$5,902M
$5,898M
+0.1%
– Electric
$4,388M
$4,414M
-0.6%
– Natural gas
$1,514M
$1,484M
+2.0%
Operating income
$1,263M
$1,096M
Read 0 community reports on PG&E Corporation, or write your own.Write a report
Six-month figures: revenue $12,783M (+7.6%), GAAP diluted EPS $0.72 vs. $0.51, core EPS $0.83 vs. $0.64.
Why revenue was flat but profit jumped
For a regulated utility like PG&E, revenue is set largely by the California Public Utilities Commission (CPUC), and a big part of it simply passes costs through to customers. That is why the flat top line tells you little on its own:
Pass-through power costs rose. Cost of electricity climbed 34% to $800 million, which the 10-Q attributes to "lower CAISO market sales revenues, lower energy contract sales and higher CAISO transmission costs" (CAISO is the state grid operator's wholesale market). The utility collected $201 million more in revenue to cover these costs, which the filing says "do not impact net income."
A timing item ran the other way. Revenue included about $180 million less in interim rate relief from the 2023 wildfire mitigation and catastrophic events (WMCE) cost-recovery case than a year earlier. The same ~$180 million showed up as lower operating and maintenance (O&M) expense, so it roughly nets to zero in profit. This is the main reason O&M fell 11% ($2,536M vs. $2,860M) — much of that drop is accounting timing, not cost-cutting.
No new wildfire claim charges. Q2 2025 included a $50 million pre-tax charge for the 2019 Kincade fire; Q2 2026 had none.
Management's explanation of the underlying earnings gain: "customer capital investment due to the earnings impact of higher rate base and net O&M savings, partially offset by a lower CPUC return on equity in effect during 2026 as compared to 2025 and increased Wildfire Fund expense." Rate base is the value of the grid assets the regulator lets PG&E earn a return on; the more it invests (and gets approved), the more it earns. The company says it is on track for its target of a 2–4% cut in non-fuel O&M costs.
What flattered the quarter
Two lines below operating income deserve a flag:
Taxes. The utility's effective tax rate was -7.8% versus 7.9% a year earlier, which the 10-Q attributes to "increased deductions for certain costs attributable to electric generation." The swing from a $20 million charge to an $87 million benefit accounts for roughly $107 million of the $212 million increase in income available to common shareholders. Pre-tax income rose a more modest 18.5% ($674M vs. $569M).
Share count. Diluted shares rose to 2,285 million from 2,203 million, reflecting the mandatory convertible preferred stock (its $24 million of quarterly dividends are added back to the diluted earnings figure). That dilution is why EPS grew more slowly (+37.5%) than earnings (+40.7%).
Pushing the other way: interest income fell to $110 million from $181 million on lower interest-bearing balances, and Wildfire Fund expense rose 16% to $126 million because of accelerated amortization tied to Southern California Edison's disclosure of a Wildfire Fund receivable for the January 2025 Eaton fire. The Wildfire Fund is the state pool that California utilities pay into to cover large wildfire claims; when another utility draws on it, PG&E writes down the value of its own share faster.
Takeaway: PG&E's earnings growth is real at the core level (+29% core EPS), but roughly half of this quarter's GAAP profit increase came from a tax benefit, and the flat revenue masks offsetting pass-through and regulatory timing items. The investment case now hinges less on quarterly execution and more on whether California fixes its wildfire liability framework — which management said in late August the new legislation does not.
Spending, cash and funding
PG&E is in a heavy-investment phase. Capital expenditures reached $6.32 billion in the first half (up 10.9%), "mainly driven by increased investments related to electric distribution customer connections, undergrounding, and distribution maintenance for wildfire risk mitigation." The utility plans $12.4 billion of capital spending in 2026. In Q2 alone it put 37 miles of power lines underground and installed 100 miles of strengthened poles and covered lines in high fire-risk areas.
Operating cash flow fell 14.6% in the first half, which the 10-Q attributes to higher electric procurement costs from lower cash receipts on grid-market sales and sales of renewable compliance credits. With spending well above internally generated cash, PG&E relies on borrowing: the utility has raised $4.4 billion of debt financing so far in 2026, including a $2.2 billion bond in June. Total liquidity was about $6.5 billion at June 30 ($972 million of cash plus $5.5 billion of undrawn credit lines). The company says it does not expect to issue new equity through 2030, and it targets a dividend payout of about 20% of core earnings by 2028.
One constraint the filing is explicit about: the utility's unsecured credit rating "remains below investment grade with one of the major credit rating agencies," so energy suppliers generally won't extend it unsecured credit.
Regulatory calendar that will move earnings
2027 General Rate Case (the multi-year case that resets base revenue): PG&E requests a $16.64 billion 2027 revenue requirement; a proposed decision is expected by March 2027 and a final decision by May 2027. In May 2026 it asked for interim recovery of 55%–85% of the request from January 1, 2027, which some intervenors oppose.
2023 WMCE: the CPUC authorized $1.9 billion of the $2.18 billion requested in February 2026 (booked this year, adding ~$620 million to first-half revenue and ~$400 million to expenses); PG&E has asked for a rehearing.
Wildfire and gas safety costs (WGSC): $2.5 billion requested; proposed decision expected by October 2026.
Kincade and Dixie fire costs: about $1.9 billion of recovery requested; proposed decision expected by November 2026. The utility carries a $638 million receivable for expected regulatory recovery on the Dixie fire.
Diablo Canyon: federal regulators approved a 20-year license extension for the nuclear plant in April 2026; running it past 2029–2030 still needs California legislative action.
Outlook
Guidance is unchanged at $1.64–$1.66 of core EPS for 2026. First-half core EPS of $0.83 is almost exactly half the midpoint, so the company is tracking in line rather than ahead.
The bigger swing factor came after the quarter. The 10-Q warned that without sufficient wildfire legislation in the session ending August 31, 2026, PG&E could face "challenges obtaining financing on acceptable terms or increased financing needs" and "may consider changes to their financial plan, including capital allocation priorities." In an August 31 filing, PG&E said it "does not believe Senate Bill 492 adequately addresses the financing risks created by California's current wildfire liability framework." Our read: operationally the business is doing what it said it would — growing rate base, trimming costs, reducing ignitions — but a plan built on $12+ billion of annual capital spending and no new equity depends on affordable debt, and the legislative outcome makes that less certain. Watch the Q3 results on October 22, 2026 for any change to capital spending plans or guidance.