PPL's Q2 2026 net income rose 26% to $230M ($0.30/share) as Kentucky rate increases and smaller one-off charges outweighed a $33M jump in interest costs; adjusted EPS edged up to $0.33 and 2026 guidance of $1.90–$1.98 was reaffirmed.
Revenue
$2.1B
+4.2% YoY
Net income
$230M
+25.7% YoY
Diluted EPS
$0.30
+20.0% YoY
Operating margin
22.5%
Overview
PPL Corporation owns four regulated utilities: PPL Electric Utilities in Pennsylvania (poles-and-wires delivery only), Louisville Gas and Electric (LG&E) and Kentucky Utilities (KU) in Kentucky (which also own power plants), and Rhode Island Energy (electricity and gas). As a regulated utility, PPL earns money mainly by investing in its networks and then being allowed by state regulators to charge customers enough to recover that investment plus an approved return on it. That makes its quarter a story about three things: new rates coming through, the cost of the debt funding its building program, and one-off items.
In the second quarter of 2026 (April–June), reported net income rose 26% to $230 million, or $0.30 per diluted share, from $183 million ($0.25) a year earlier. Most of that jump came from smaller one-off charges than last year rather than a big step up in the underlying business: on PPL's own adjusted basis ("earnings from ongoing operations," which strips out items management considers non-recurring), earnings per share rose only $0.01, to $0.33 from $0.32. New Kentucky base rates effective January 1, 2026 lifted revenue, but higher interest and depreciation costs from the heavy capital spending absorbed most of the gain.
Key figures
Metric
Q2 2026
Q2 2025
YoY Change
Operating revenues
$2,111M
$2,025M
+4.2%
Operating income
$475M
$406M
+17.0%
Operating margin
22.5%
20.0%
Read 0 community reports on PPL Corporation, or write your own.Write a report
Operating margin is the share of revenue left after the costs of running the business (fuel, power purchases, maintenance, depreciation, non-income taxes), before interest and income tax. Retail GWh excludes Rhode Island, whose revenue is "decoupled" from volumes, meaning it doesn't rise or fall with how much power customers use.
For the first six months, net income was $682 million ($0.90 per share) versus $597 million ($0.80), and ongoing EPS was $0.96 versus $0.92.
Why reported earnings grew much faster than underlying earnings
The gap between the 26% GAAP jump and the 3% ongoing EPS gain is almost entirely about one-off charges shrinking:
Q2 2025 carried $57 million of after-tax special charges ($0.07 per share), mainly costs of rebuilding PPL's IT systems ($24M), $24 million of "post-TSA adjustments" (account clean-ups after PPL stopped relying on the seller's back-office services for Rhode Island Energy, which it bought in 2022), and $13 million of Rhode Island integration costs.
Q2 2026 carried only $17 million ($0.03 per share), mostly IT transformation ($9M) and $6 million of bill-collection costs tied to integrating Rhode Island's customer system.
The same pattern shows in the cost lines: other operation and maintenance expense fell $42 million, and the 10-Q attributes $17 million of that to lower Rhode Island transition costs and $14 million to lower IT restructuring costs, plus $12 million lower Rhode Island storm costs. Those are largely costs that stopped, not efficiencies that will keep compounding.
Segment performance
Segment (ongoing earnings, $M)
Q2 2026
Q2 2025
Change
Kentucky Regulated
133
132
+1
Pennsylvania Regulated
135
140
−5
Rhode Island Regulated
19
8
+11
Corporate and Other
(40)
(40)
0
Total
247
240
+7
Kentucky: new rates, but costs rose in step. Retail-rate increases approved by the Kentucky Public Service Commission (KPSC), effective January 1, 2026, added $21 million of revenue at LG&E and $28 million at KU in the quarter. The February 2026 orders granted $233 million of annual revenue increases in total, at a 9.775% allowed return on equity (the profit rate regulators let the utility earn on shareholders' money invested in the system). But ongoing segment earnings were essentially flat ($133M vs. $132M): the company says the higher rates were offset by higher operating costs, depreciation and interest expense. New depreciation rates effective March 1 alone added $10 million of quarterly depreciation across LG&E and KU. Retail electricity delivered in Kentucky fell 1.2%, and wholesale sales dropped 43.7% (151 vs. 268 GWh).
Pennsylvania: squeezed while waiting for new rates. Ongoing earnings slipped to $135 million from $140 million. Transmission revenue rose $15 million on returns from additional grid investment, but higher depreciation and interest costs outran it. This was the last quarter before relief: the Pennsylvania commission approved a settlement adding about $275 million of annual distribution revenue, with new rates effective July 1, 2026, so none of it is in these Q2 numbers. The $47 million increase in Pennsylvania "PLR" revenue (power PPL buys and passes through at cost to customers who don't pick another supplier) was matched by higher energy purchases and doesn't add profit.
Rhode Island: the improvement came from lower costs. Ongoing earnings more than doubled to $19 million from $8 million, which the release attributes to lower operating costs and higher rider revenue (surcharges that recover specific costs), partly offset by higher depreciation. Distribution revenue actually fell $25 million from reconcilable cost-recovery mechanisms, so the gain is about costs, not pricing, in this quarter.
The cost of building: interest and funding
Interest expense rose $33 million (16.6%) to $232 million, which the 10-Q attributes to higher long-term borrowings. PPL spent $2.34 billion on plant and equipment in the first half, 36% more than a year earlier, while operating cash flow was $1.14 billion; the gap was funded mainly with debt. Long-term debt rose to $19.8 billion at June 30 from $18.0 billion at year-end, including a February issue of $1.15 billion of "equity units" (bonds bundled with a contract obliging holders to buy PPL shares by February 2029), plus $400 million of 30-year Rhode Island Energy notes at 6.00% and $500 million of 30-year PPL Electric bonds at 5.75% in May. PPL also had forward contracts outstanding to sell about 27.4 million new shares at roughly $35.90 each under its at-the-market program. Both the equity units and the forwards mean more shares over time, which is part of why diluted share count rose to 757 million from 743 million and why GAAP net income grew faster (26%) than GAAP EPS (20%).
Takeaway: PPL's 26% profit jump mostly reflects last year's one-off charges falling away. Underlying earnings grew about 3% because interest and depreciation from a 36% increase in capital spending ate most of the Kentucky rate increases. The better growth management is promising for the second half depends on rate relief that only started after the quarter ended: Pennsylvania from July 1 and Rhode Island from September 1.
After the quarter: two rate decisions landed
Two 8-K filings after the 10-Q settled rate questions the quarterly report had left open:
Kentucky rehearing (August 14, 2026): the KPSC granted parts of LG&E and KU's rehearing request, which the companies estimate adds about $7 million of annual revenue ($4M LG&E, $3M KU) on top of the February orders. It denied reinstating other parts of the October 2025 settlement.
Rhode Island rate case (August 21, 2026): regulators approved annual increases of $44.1 million for electric and $93.7 million for gas, effective September 1, 2026, at a 9.275% return on equity and a 52% equity share of the capital structure. That is well below the roughly $181 million first-year increase and 10.75% ROE requested, and the proposed second rate year was not approved. Separately, Rhode Island Energy agreed to give customers about $170 million of bill credits from October 2026 through September 2027, settling a promise made when PPL bought the utility to hold customers harmless from certain tax effects of the deal. PPL reaffirmed its 2026 guidance after both decisions.
Outlook
Management reaffirmed its 2026 ongoing EPS forecast of $1.90–$1.98 (midpoint $1.94) and its target of 6%–8% annual EPS growth through at least 2029, near the top of that range. With $0.96 earned in the first half, the midpoint requires about $0.98 in the second half, slightly more than the whole first half, and management attributes it to "improved rate recovery and capital tracking mechanisms" — mainly the Pennsylvania rates in place from July and the Rhode Island rates from September.
The longer-term story is data centers. PPL Electric's pipeline of data-center projects in advanced planning grew to 31.8 gigawatts, with more than 11 GW under signed service agreements; Kentucky's economic-development pipeline reached 13.7 GW. PPL estimates $10–12 billion of potential generation investment through 2032 across Kentucky (a new generation request likely by the end of 2026, estimated at $3.5–4.0 billion) and its 51% Pennsylvania generation venture with Blackstone, Invitium Energy. That venture has no signed customer power contracts yet as of the 10-Q, and none of it is in PPL's current plan or guidance.
Our read: The second half should look better than the first because new rates are now in place in all three states. But this quarter shows how quickly interest and depreciation absorb rate increases when capital spending is up by a third. Rhode Island's award came in well under the request. The numbers to watch in the Q3 report are whether Pennsylvania segment earnings rise on the new rates, whether interest-cost growth slows, and whether Invitium signs its first contract, which management expects by the end of 2026.
Source: PPL Corporation Form 10-Q for the quarter ended June 30, 2026 (filed August 7, 2026), the Q2 2026 earnings release (8-K Exhibit 99.1), and 8-Ks filed August 17 and August 27, 2026. "Earnings from ongoing operations" is a non-GAAP measure; the reconciliation to net income is in the earnings release.