Public Service Enterprise Group - $PEG - Earnings Analysis: Strong regulated utility business provides a stable base for earnings.

Business Model

PSEG operates primarily through its regulated utility, PSE&G, which generates revenue by providing electric and gas services to approximately 2.4 million electric and 1.9 million natural gas customers in New Jersey. PSEG Power generates revenue through the sale of power from its nuclear generation fleet. PSEG Long Island is also a revenue source.

Revenue Sources

• Electric and gas service sales to residential, commercial, and industrial customers by PSE&G.
• Power sales from PSEG Power's nuclear generation fleet.
• Revenues from PSEG Long Island, although specifics are not detailed in this release.

Income Statement Analysis

• Operating revenues decreased by 5.37% from Q4 2023 to Q4 2024.
• Operating expenses increased by 5.57% from Q4 2023 to Q4 2024.
• Operating income decreased by 35.69% from Q4 2023 to Q4 2024.
• Net income decreased by 47.62% from Q4 2023 to Q4 2024.
• Basic earnings per share decreased by 48.18% from Q4 2023 to Q4 2024.

Balance Sheet Analysis

• Total assets increased by 8.71% from Dec 31, 2023 to Dec 31, 2024.
• Total stockholders' equity increased by 4.12% from Dec 31, 2023 to Dec 31, 2024.
• Total liabilities increased by 12.21% from Dec 31, 2023 to Dec 31, 2024.

Cash Flow Analysis

• Net cash provided by operating activities decreased by 43.96% from 2023 to 2024.
• Net cash used in investing activities increased by 11.76% from 2023 to 2024.
• Net cash provided by financing activities shifted from a use of cash in 2023 to a provision of cash in 2024.
• Cash, cash equivalents and restricted cash at the end of the period increased by 55.56% from 2023 to 2024.

Capital Allocation

PSEG plans to invest $3.8 billion in regulated investments focused on infrastructure modernization, energy efficiency, electrification initiatives, and load growth in 2025. The capital spending plan for 2025-2029 is $22.5 billion - $26 billion, up from the prior plan, driven by investments at PSE&G. The company increased the annual common dividend by 5% to $2.52 per share for 2025.

Management Commentary

PSEG posted strong operating and financial results for the fourth quarter, completing the full year of 2024 having achieved several strategic and regulatory objectives.

Our improved business mix and more predictable and visible earnings growth has enhanced our ability to drive future performance as our focus remains on operational excellence.

We are initiating PSEG's non-GAAP Operating Earnings guidance at $3.94 to $4.06 per share, which is up by 9% at the midpoint over our 2024 reported results.

Overall Sentiment: Positive, reflecting confidence in the company's strategic execution and financial outlook.

Disclaimer: This report is for informational purposes only and not investment advice. The analysis is based on limited information and subject to change. Investing in securities involves risks, including potential loss of principal. Past performance doesn't guarantee future results. Always conduct your own research, understand the risks, and consult a financial professional before making investment decisions.