PPL Corporation reports first-quarter 2024 earnings

Rhea-AI Summary

PPL reported first-quarter 2024 earnings with a GAAP EPS of $0.42 and ongoing EPS of $0.54, showing a 12.5% increase from 2023. The company reaffirmed its 2024 earnings forecast range of $1.63 to $1.75 per share. PPL plans $3 billion in infrastructure improvements in 2024, aiming for $14.3 billion by 2027. The company expects 6-8% annual earnings and dividend growth through 2027.

Positive

• PPL achieved a 12.5% increase in ongoing EPS for the first quarter of 2024 compared to 2023, reaching $0.54 per share.

• The company reaffirmed its 2024 earnings forecast range of $1.63 to $1.75 per share, with a midpoint of $1.69 per share, demonstrating confidence in future financial performance.

• PPL plans over $3 billion in infrastructure improvements in 2024, part of a larger $14.3 billion infrastructure plan through 2027 to modernize the grid and enhance energy resilience.

Negative

• PPL reported a decrease in reported earnings from $0.39 to $0.42 per share for the first quarter of 2024, despite an increase in ongoing EPS, which may raise concerns among investors.

• The company's Corporate and Other segment saw a decrease in reported earnings by $0.03 per share compared to the previous year, potentially indicating challenges in that area of operations.

Insights

Financial Analyst

PPL Corporation's recent announcement of a 12.5% increase in ongoing earnings per share (EPS) from $0.48 in 2023 to $0.54 in 2024 reflects a positive trend in operational performance. The company's assertion of no need for equity issuances alongside its aim for 6% to 8% annual earnings and dividend growth indicates a strong capital position and a commitment to shareholder returns. This projected growth, particularly without diluting equity, is an encouraging sign for investors concerned with both near-term gains and long-term investment stability. However, as a retail investor, it's prudent to consider the potential volatility of the energy sector and regulatory changes, which could impact future performance.

Energy Sector Analyst

Investments exceeding $3 billion in grid modernization and resilience highlight PPL Corporation's proactive stance on infrastructure development and sustainability. These enhancements are not only pivotal for the company's growth but also demonstrate alignment with broader industry trends towards more resilient energy systems. While such capital commitments suggest future preparedness, retail investors should recognize the risk of regulatory hurdles that may affect the return on these investments. Moreover, the focus on efficiency through the utility of the future strategy, targeting operational and maintenance savings, signals potential for operational excellence, though such savings must be consistently realized to support the projected growth rates.

Risk Analyst

The reaffirmation of PPL's strong balance sheet, one of the best in the U.S. utility sector, is a significant marker of financial health and risk management. For investors, a sturdy balance sheet is often indicative of a company's ability to weather economic downturns and fund operations without compromising financial stability. While PPL's financial outlook appears robust, the reliance on ongoing operations to improve the company's EPS could be a double-edged sword if unexpected costs or economic factors interfere. Investors should consider the risks associated with the integration expenses related to Rhode Island Energy and whether these will continue to incur as 'special items' impacting net earnings.

• Announces 2024 first-quarter reported earnings (GAAP) per share of $0.42.
• Achieves 2024 first-quarter ongoing earnings per share of $0.54 vs. $0.48 in 2023, an increase of 12.5%.
• Reaffirms 2024 ongoing earnings forecast range of $1.63 to $1.75 per share with a midpoint of $1.69 per share.
• Reaffirms projected annual earnings per share and dividend growth of 6% to 8% through at least 2027.

ALLENTOWN, Pa., May 1, 2024 /PRNewswire/ -- PPL Corporation (NYSE: PPL) today announced first-quarter 2024 reported earnings (GAAP) of $307 million, or $0.42 per share, compared with first-quarter 2023 reported earnings of $285 million, or $0.39 per share.

Adjusting for special items, first-quarter 2024 earnings from ongoing operations (non-GAAP) were $402 million, or $0.54 per share, compared with $352 million, or $0.48 per share, a year ago.

Special items in the first quarters of 2024 and 2023 primarily included integration and related expenses associated with the acquisition of Rhode Island Energy.

"Backed by our solid first-quarter financial performance and continued confidence in our business plan, today we are reaffirming our ongoing earnings forecast range of $1.63 to $1.75 per share, with a midpoint of $1.69 per share," said Vincent Sorgi, PPL president and chief executive officer.

"We are on track to complete more than $3 billion in infrastructure improvements this year — part of more than $14.3 billion planned through 2027 — to modernize the grid, strengthen grid resilience against more powerful and frequent severe weather, and advance a safe, reliable, affordable and sustainable energy future for our customers and communities," said Sorgi.

"At the same time, we continue to drive greater efficiencies through our utility of the future strategy to keep energy affordable for our customers, and we remain on pace to achieve our targeted annual operation and maintenance savings."

Today the company reaffirmed its targeted annual operation and maintenance savings of at least $175 million by 2026 from the company's 2021 baseline, with $120-$130 million of annual savings planned by the end of 2024.

In addition, PPL reaffirmed its projection of 6% to 8% annual earnings and dividend growth through at least 2027 based off the midpoint of its 2024 ongoing earnings forecast range.

The company expects to achieve this growth without the need for equity issuances and while maintaining a balance sheet that is among the best in the U.S. utility sector.

First-Quarter 2024 Earnings Details

As discussed in this news release, reported earnings are calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP). "Earnings from ongoing operations" is a non-GAAP financial measure that is adjusted for special items. See the tables at the end of this news release for a reconciliation of reported earnings (net income) to earnings from ongoing operations, including an itemization of special items.

(Dollars in millions, except for per share amounts)	1st Quarter
	2024		2023		Change
Reported earnings	$       307		$       285		8 %
Reported earnings per share	$      0.42		$      0.39		8 %
	1st Quarter
	2024		2023		Change
Earnings from ongoing operations	$       402		$       352		14 %
Earnings from ongoing operations per share	$      0.54		$      0.48		13 %

First-Quarter 2024 Earnings by Segment

	1st Quarter
Per share	2024		2023
Reported earnings
Kentucky Regulated	$              0.25		$              0.22
Pennsylvania Regulated	0.21		0.19
Rhode Island Regulated	0.09		0.08
Corporate and Other	(0.13)		(0.10)
Total	$              0.42		$              0.39
	1st Quarter
	2024		2023
Special items (expense) benefit
Kentucky Regulated	$                 —		$                 —
Pennsylvania Regulated	(0.01)		—
Rhode Island Regulated	(0.02)		(0.02)
Corporate and Other	(0.09)		(0.07)
Total	$            (0.12)		$            (0.09)
	1st Quarter
	2024		2023
Earnings from ongoing operations
Kentucky Regulated	$              0.25		$              0.22
Pennsylvania Regulated	0.22		0.19
Rhode Island Regulated	0.11		0.10
Corporate and Other	(0.04)		(0.03)
Total	$              0.54		$              0.48

Key Factors Impacting Earnings

In addition to the segment drivers outlined below, PPL's reported earnings in the first quarter of 2024 included net special-item after-tax charges of $95 million, or $0.12 per share, compared to net special-item after-tax charges of $67 million, or $0.09 per share, in the first quarter of 2023. In both cases, special items were primarily attributable to integration and related expenses associated with the acquisition of Rhode Island Energy.

Kentucky Regulated Segment

PPL's Kentucky Regulated segment primarily consists of the regulated electricity and natural gas operations of Louisville Gas and Electric Company and the regulated electricity operations of Kentucky Utilities Company.

Reported earnings and earnings from ongoing operations in the first quarter of 2024 increased by $0.03 per share compared with a year ago. Factors driving earnings results included higher sales volumes primarily due to mild weather experienced in the first quarter of 2023. 

Pennsylvania Regulated Segment

PPL's Pennsylvania Regulated segment consists of the regulated electricity delivery operations of PPL Electric Utilities.

Reported earnings in the first quarter of 2024 increased by $0.02 per share compared with a year ago. Earnings from ongoing operations in the first quarter of 2024 increased by $0.03 per share compared with a year ago. Factors driving earnings results primarily included higher transmission revenue and lower operating costs.

Rhode Island Regulated Segment

PPL's Rhode Island Regulated segment consists of the regulated electricity and natural gas operations of Rhode Island Energy.

Reported earnings and earnings from ongoing operations in the first quarter of 2024 increased by $0.01 per share compared with a year ago. Factors driving earnings results primarily included higher distribution revenue from capital investments, higher transmission revenue and lower operating costs, partially offset by higher interest expense.

Corporate and Other

PPL's Corporate and Other category primarily includes financing costs incurred at the corporate level, certain non-recoverable costs resulting from commitments made to the Rhode Island Division of Public Utilities and Carriers and the Rhode Island Attorney General's Office in conjunction with the acquisition of Rhode Island Energy, and certain other unallocated costs.  

Reported earnings in the first quarter of 2024 decreased by $0.03 per share compared with a year ago. Earnings from ongoing operations in the first quarter of 2024 decreased by $0.01 per share compared with a year ago. Factors driving earnings results were not individually significant.

2024 Earnings Forecast

PPL's 2024 earnings from ongoing operations forecast range is $1.63 to $1.75 per share, with a midpoint of $1.69 per share.

Earnings from ongoing operations is a non-GAAP measure that could differ from reported earnings due to special items that are, in management's view, non-recurring or otherwise not reflective of the company's ongoing operations. PPL management is not able to forecast whether any of these factors will occur or whether any amounts will be reported for future periods. Therefore, PPL is not able to provide an equivalent GAAP measure for earnings guidance.

See the table at the end of this news release for a complete reconciliation of the earnings forecast.

About PPL

PPL Corporation (NYSE: PPL), headquartered in Allentown, Pennsylvania, is a leading U.S. energy company focused on providing electricity and natural gas safely, reliably and affordably to more than 3.5 million customers in the U.S. PPL's high-performing, award-winning utilities are addressing energy challenges head-on by building smarter, more resilient and more dynamic power grids and advancing sustainable energy solutions. For more information, visit www.pplweb.com.

(Note: All references to earnings per share in the text and tables of this news release are stated in terms of diluted earnings per share unless otherwise noted.)

Conference Call and Webcast

PPL invites interested parties to listen to a live internet webcast of management's teleconference with financial analysts about first-quarter 2024 financial results at 11 a.m. Eastern time on Wednesday, May 1. The call will be webcast live, in audio format, together with slides of the presentation. For those who are unable to listen to the live webcast, a replay with slides will be accessible at www.pplweb.com/investors for 90 days after the call.

Interested individuals can access the live conference call via telephone at 1-844-512-2926. International participants should call 1-412-317-6300. Participants will need to enter the following "Elite Entry" number to join the conference: 5627675. Callers can access the webcast link at www.pplweb.com/investors under "Events."

Management utilizes "Earnings from Ongoing Operations" or "Ongoing Earnings" as a non-GAAP financial measure that should not be considered as an alternative to reported earnings, or net income, an indicator of operating performance determined in accordance with GAAP. PPL believes that Earnings from Ongoing Operations is useful and meaningful to investors because it provides management's view of PPL's earnings performance as another criterion in making investment decisions. In addition, PPL's management uses Earnings from Ongoing Operations in measuring achievement of certain corporate performance goals, including targets for certain executive incentive compensation. Other companies may use different measures to present financial performance.

Earnings from Ongoing Operations is adjusted for the impact of special items. Special items are presented in the financial tables on an after-tax basis with the related income taxes on special items separately disclosed. Income taxes on special items, when applicable, are calculated based on the statutory tax rate of the entity where the activity is recorded. Special items may include items such as:

• Gains and losses on sales of assets not in the ordinary course of business.
• Impairment charges.
• Significant workforce reduction and other restructuring effects.
• Acquisition and divestiture-related adjustments.
• Significant losses on early extinguishment of debt.
• Other charges or credits that are, in management's view, non-recurring or otherwise not reflective of the company's ongoing operations.

Statements contained in this news release, including statements with respect to future earnings, cash flows, dividends, financing, regulation and corporate strategy, are "forward-looking statements" within the meaning of the federal securities laws. Although PPL Corporation believes that the expectations and assumptions reflected in these forward-looking statements are reasonable, these statements are subject to a number of risks and uncertainties, and actual results may differ materially from the results discussed in the statements. The following are among the important factors that could cause actual results to differ materially from the forward-looking statements: asset or business acquisitions and dispositions; pandemic health events or other catastrophic events and their effect on financial markets, economic conditions and our businesses; market demand for energy in our service territories; weather conditions affecting customer energy usage and operating costs; volatility in or the impact of other changes on financial markets, commodity prices and economic conditions, including inflation; the effect of any business or industry restructuring; the profitability and liquidity of PPL Corporation and its subsidiaries; new accounting requirements or new interpretations or applications of existing requirements; operating performance of our facilities; the length of scheduled and unscheduled outages at our generating plants; environmental conditions and requirements and the related costs of compliance; system conditions and operating costs; development of new projects, markets and technologies; performance of new ventures; any impact of severe weather on our business; receipt of necessary government permits, approvals, rate relief and regulatory cost recovery; capital market conditions and decisions regarding capital structure; the impact of state, federal or foreign investigations applicable to PPL Corporation and its subsidiaries; the outcome of litigation against PPL Corporation and its subsidiaries; PPL Corporation's stock price performance; the market prices of equity securities and the impact on pension income and resultant cash funding requirements for defined benefit pension plans; the securities and credit ratings of PPL Corporation and its subsidiaries; political, regulatory or economic conditions in jurisdictions where PPL Corporation or its subsidiaries conduct business, including any potential effects of threatened or actual cyberattack, terrorism, or war or other hostilities; new state, federal or foreign legislation, including new tax legislation; and the commitments and liabilities of PPL Corporation and its subsidiaries. Any such forward-looking statements should be considered in light of such important factors and in conjunction with factors and other matters discussed in PPL Corporation's Form 10-K and other reports on file with the Securities and Exchange Commission.

Note to Editors: Visit our media website at www.pplnewsroom.com for additional news and background about PPL Corporation.

PPL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED FINANCIAL INFORMATION(1)
Condensed Consolidated Balance Sheets (Unaudited)
(Millions of Dollars)
	March 31,		December 31,
	2024		2023
Assets
Cash and cash equivalents	$                  276		$                  331
Accounts receivable	1,270		1,221
Unbilled revenues	371		428
Fuel, materials and supplies	477		505
Regulatory assets	330		293
Other current assets	313		154
Property, Plant and Equipment
Regulated utility plant	39,031		38,608
Less: Accumulated depreciation - regulated utility plant	9,327		9,156
Regulated utility plant, net	29,704		29,452
Non-regulated property, plant and equipment	71		72
Less: Accumulated depreciation - non-regulated property, plant and equipment	24		23
Non-regulated property, plant and equipment, net	47		49
Construction work in progress	1,996		1,917
Property, Plant and Equipment, net	31,747		31,418
Noncurrent regulatory assets	1,859		1,874
Goodwill and other intangibles	2,551		2,553
Other noncurrent assets	437		459
Total Assets	$             39,631		$             39,236
Liabilities and Equity
Short-term debt	$                  291		$                  992
Long-term debt due within one year	1		1
Accounts payable	903		1,104
Other current liabilities	1,180		1,243
Long-term debt	15,753		14,611
Deferred income taxes and investment tax credits	3,308		3,219
Accrued pension obligations	255		275
Asset retirement obligations	127		133
Noncurrent regulatory liabilities	3,351		3,340
Other deferred credits and noncurrent liabilities	404		385
Common stock and additional paid-in capital	12,322		12,334
Treasury stock	(931)		(948)
Earnings reinvested	2,828		2,710
Accumulated other comprehensive loss	(161)		(163)
Total Liabilities and Equity	$             39,631		$             39,236
(1)   The Financial Statements in this news release have been condensed and summarized for purposes of this presentation. Please refer to         PPL Corporation's periodic filings with the Securities and Exchange Commission for full financial statements, including note disclosure.

 

PPL CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Unaudited)
(Millions of Dollars, except share data)
		Three Months Ended March 31,
		2024		2023
Operating Revenues		$             2,304		$             2,415
Operating Expenses
Operation
Fuel		209		201
Energy purchases		520		734
Other operation and maintenance		626		559
Depreciation		316		313
Taxes, other than income		88		110
Total Operating Expenses		1,759		1,917
Operating Income		545		498
Other Income (Expense) - net		22		30
Interest Expense		179		164
Income Before Income Taxes		388		364
Income Taxes		81		79
Net Income		$                307		$                285
Earnings Per Share of Common Stock:
Basic and Diluted
Net Income Available to PPL Common Shareowners		$               0.42		$               0.39
Weighted-Average Shares of Common Stock Outstanding (in thousands)
Basic		737,512		736,829
Diluted		738,820		737,698

 

PPL CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
(Millions of Dollars)
	Three Months Ended March 31,
	2024		2023
Cash Flows from Operating Activities
Net income	$                307		$                285
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation	316		313
Amortization	24		17
Defined benefit plans - (income) expense	(15)		(18)
Deferred income taxes and investment tax credits	72		77
Other	3		8
Change in current assets and current liabilities
Accounts receivable	(75)		(94)
Accounts payable	(221)		(63)
Unbilled revenues	57		109
Fuel, materials and supplies	33		10
Prepayments	(108)		(83)
Taxes payable	(47)		(42)
Regulatory assets and liabilities, net	(61)		(46)
Accrued interest	90		67
Other	(103)		(14)
Other operating activities
Defined benefit plans - funding	(5)		(3)
Other	15		(93)
Net cash provided by operating activities	282		430
Cash Flows from Investing Activities
Expenditures for property, plant and equipment	(596)		(499)
Other investing activities	5		(4)
Net cash used in investing activities	(591)		(503)
Cash Flows from Financing Activities
Issuance of long-term debt	1,148		3,127
Retirement of long-term debt	—		(1,750)
Payment of common stock dividends	(177)		(171)
Net increase (decrease) in short-term debt	(701)		(985)
Other financing activities	(22)		(44)
Net cash provided by financing activities	248		177
Net Decrease in Cash, Cash Equivalents and Restricted Cash	(61)		104
Cash, Cash Equivalents and Restricted Cash at Beginning of Period	382		357
Cash, Cash Equivalents and Restricted Cash at End of Period	$                321		$                461
Supplemental Disclosures of Cash Flow Information
Significant non-cash transactions:
Accrued expenditures for property, plant and equipment at March 31,	$                253		$                257

 

Operating - Electricity Sales (Unaudited)(1)
	Three Months Ended March 31,
					Percent
(GWh)	2024		2023		Change
PA Regulated Segment
Retail Delivered	9,627		9,442		2.0 %
KY Regulated Segment
Retail Delivered	7,454		6,976		6.9 %
Wholesale(2)	167		109		53.2 %
Total	7,621		7,085		7.6 %
Total	17,248		16,527		4.4 %
(1) Excludes the Rhode Island Regulated segment electricity sales as revenues are decoupled from volumes delivered.
(2) Represents FERC-regulated municipal and unregulated off-system sales.

 

Reconciliation of Segment Reported Earnings to Earnings from Ongoing Operations
(After-Tax)
(Unaudited)
Year-to-Date March 31, 2024	(millions of dollars)
	KY		PA		RI		Corp.
	Reg.		Reg.		Reg.		& Other		Total
Reported Earnings(1)	$          190		$          149		$            64		$           (96)		$          307
Less: Special Items (expense) benefit:
Strategic corporate initiatives, net of tax of $0, $0, $1(2)	(1)		(1)		—		(2)		(4)
Acquisition integration, net of tax of $4, $17(3)	—		—		(14)		(66)		(80)
PPL Electric billing issue, net of tax of $4(4)	—		(11)		—		—		(11)
Total Special Items	(1)		(12)		(14)		(68)		(95)
Earnings from Ongoing Operations	$          191		$          161		$            78		$           (28)		$          402
	(per share - diluted)
	KY		PA		RI		Corp.
	Reg.		Reg.		Reg.		& Other		Total
Reported Earnings(1)	$         0.25		$         0.21		$         0.09		$        (0.13)		$         0.42
Less: Special Items (expense) benefit:
Acquisition integration(3)	—		—		(0.02)		(0.09)		(0.11)
PPL Electric billing issue(4)	—		(0.01)		—		—		(0.01)
Total Special Items	—		(0.01)		(0.02)		(0.09)		(0.12)
Earnings from Ongoing Operations	$         0.25		$         0.22		$         0.11		$        (0.04)		$         0.54
(1) Reported Earnings represents Net Income.
(2) Represents costs primarily related to PPL's centralization efforts and other strategic efforts.
(3) Primarily integration and related costs associated with the acquisition of Rhode Island Energy.
(4) Certain expenses related to billing issues.

 

Reconciliation of Segment Reported Earnings to Earnings from Ongoing Operations
(After-Tax)
(Unaudited)
Year-to-Date March 31, 2023	(millions of dollars)
	KY		PA		RI		Corp.
	Reg.		Reg.		Reg.		& Other		Total
Reported Earnings(1)	$          166		$          138		$           54		$           (73)		$          285
Less: Special Items (expense) benefit:
Talen litigation costs, net of tax of $0(2)	—		—		—		(1)		(1)
Strategic corporate initiatives, net of tax of $0, $0(3)	(1)		—		—		(1)		(2)
Acquisition integration, net of tax of $5, $12(4)	—		—		(17)		(44)		(61)
PA tax rate change(5)	—		1		—		—		1
Sale of Safari Holdings, net of tax of $0(6)	—		—		—		(4)		(4)
Total Special Items	(1)		1		(17)		(50)		(67)
Earnings from Ongoing Operations	$          167		$          137		$           71		$           (23)		$          352
	(per share - diluted)
	KY		PA		RI		Corp.
	Reg.		Reg.		Reg.		& Other		Total
Reported Earnings(1)	$         0.22		$         0.19		$        0.08		$        (0.10)		$         0.39
Less: Special Items (expense) benefit:
Acquisition integration(4)	—		—		(0.02)		(0.06)		(0.08)
Sale of Safari Holdings(6)	—		—		—		(0.01)		(0.01)
Total Special Items	—		—		(0.02)		(0.07)		(0.09)
Earnings from Ongoing Operations	$         0.22		$         0.19		$        0.10		$        (0.03)		$         0.48
(1) Reported Earnings represents Net Income.
(2) Represents costs related to litigation with Talen Montana, LLC and affiliated entities.
(3) Represents costs primarily related to PPL's centralization efforts and other strategic efforts.
(4) Primarily integration and related costs associated with the acquisition of Rhode Island Energy.
(5) Impact of Pennsylvania state tax reform.
(6) Final closing adjustments related to the sale of Safari Holdings, LLC.

 

Reconciliation of PPL's Earnings Forecast
After-Tax (Unaudited)
(per share - diluted)
	2024 Forecast Range
	Midpoint		High		Low
Estimate of Reported Earnings	$      1.57		$      1.63		$      1.51
Less: Special Items (expense) benefit:(1)
Acquisition integration(2)	(0.11)		(0.11)		(0.11)
PPL Electric billing issue(3)	(0.01)		(0.01)		(0.01)
Total Special Items	(0.12)		(0.12)		(0.12)
Forecast of Earnings from Ongoing Operations	$      1.69		$      1.75		$      1.63
(1) Reflects only special items recorded through March 31, 2024. PPL is not able to forecast special items for future periods.
(2) Primarily integration and related costs associated with the acquisition of Rhode Island Energy.
(3) Certain expenses related to billing issues.

 

Contacts:	For news media: Ryan Hill, 610-774-4033
	For financial analysts: Andy Ludwig, 610-774-3389

 

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SOURCE PPL Corporation

FAQ

What were PPL 's reported earnings per share for the first quarter of 2024?

PPL reported earnings per share of $0.42 for the first quarter of 2024.

What was the increase in ongoing earnings per share for PPL compared to 2023?

PPL achieved a 12.5% increase in ongoing earnings per share, reaching $0.54 in the first quarter of 2024 from $0.48 in 2023.

What is PPL 's 2024 earnings forecast range?

PPL reaffirmed its 2024 earnings forecast range of $1.63 to $1.75 per share, with a midpoint of $1.69 per share.

What is PPL 's projected annual earnings and dividend growth through 2027?

PPL expects 6-8% annual earnings and dividend growth through at least 2027 based on the midpoint of its 2024 ongoing earnings forecast range.

What is PPL 's plan for infrastructure improvements?

PPL plans to complete over $3 billion in infrastructure improvements in 2024, part of a larger $14.3 billion plan through 2027 to modernize the grid and enhance energy resilience.