Public Service Enterprise Group Incorporated
CEO : Mr. Ralph A. LaRossa
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2022 Q4 | 2.7% YoY | 6.9% | 79.5% | 2023-02-21 |
Dan Cregg says,
PSE&G’s Performance and Forecast
- PSE&G’s full year 2022 net income rose over 8% to $1.565 billion, and Q4 2022 net income rose to $352 million, reflecting higher earnings from continued investment in TND programs and the favorable impact of full year decoupling in 2022.
- PSE&G invested over $3 billion in planned capital spending to upgrade transmission and distribution facilities, enhance reliability and increased resiliency, and launched the IAP, a $511 million infrastructure advancement program in 2022.
- PSE&G’s rate base stood at approximately $26.4 billion, a 7.7% increase over year-end 2021, and the Board of Public Utilities approved an order authorizing PSE&G to modify its method of pension accounting for ratemaking purposes, which will mitigate variability in the calculation of PSE&G’s pension expense for calendar year 2023 and beyond.
- PSE&G’s narrowed forecast of net income for 2023 is $1.5 billion to $1.525 billion, which reflects pension and OPEB updates compared to 2022 offset by the benefit of contemporaneously recovered investments, predictability of utility margin from the safety coupling, as well as the implementation of the pension accounting filing effective for calendar year ’23.
CFIO’s Performance and Forecast
- CFIO’s full year 2022 net loss was $534 million or $1.06 per share reflecting higher losses on both mark to market transactions and nuclear decommissioning trust fund related activity.
- CFIO’s net income for Q4 2022 improved to $436 million or $0.88 per share from $174 million in the year ago quarter, reflecting higher gains on both mark to market transactions and NDT fund related activities.
- CFIO’s non-GAAP operating earnings guidance for 2023 is $200 million to $225 million, and PSEG exited certain legacy BGS or basic generation service contracts in December 2022 to rebalance their hedge portfolio and reduce volatility in 2023.
Financing Activity and Collateral Postings
- Total available credit capacity was $3.7 billion as of December 31, 2022, including a billion at PSE&G, and PSEG power had net cash collateral postings of $1.5 billion at December 31 primarily related to as a money hedge positions resulting from higher energy prices, which declined to $700 million through last Friday.
- PSEG had outstanding a total of $1.25 billion of 365-day term loans expiring this spring to support power’s collateral needs and power had an outstanding a $1.25 billion term loan expiring in March of 2025, which comprise $2.5 billion a variable rate debt.
- PSEG entered into interest rate swaps during September and October of last year, which converted $1.05 billion of their outstanding term loans from floating to fixed rate reducing their variable rate debt exposure.
Non-GAAP Operating Earnings Guidance for 2023
- PSEG has narrowed their 2023 non-GAAP operating earnings guidance to $3.40 to $3.50 per share around the same $3.45 per share midpoint, with regulated operations continuing to contribute approximately 90% of that total.
Ralph LaRossa says,
Strong Financial and Operating Results
- Successfully navigated inflation, supply chain disruptions, energy price spikes, and steep rise in interest rates
- GAAP earnings of $2.06 per share and non-GAAP operating earnings of $3.47 per share for 2022
- PSE&G’s net income increased by 8.2% due to continued investments
Strategic Actions for Predictability and Visibility of Financial Results
- Sold PSE&G fossil and exit investment in offshore wind generation to increase regulated contribution to non-GAAP earnings
- Increased cash return to shareholders and completed $500 million share repurchase program
- Passage of the inflation reduction act of 2022 provides stability for U.S. nuclear fleet and created valuable incentives for PSE&G’s customers to accelerate their transition to electric vehicles
2023 Financial Outlook and Dividend Increase
- Narrowed 2023 non-GAAP operating earnings guidance to $3.40 to $3.50 per share
- Expects long-term compound annual earnings growth rate of 5% to 7% through 2027
- Extended 2022 dividend increase of $0.12 per share, setting 2023 indicative annual rate at $2.28 per share
Customer Satisfaction and ESG Recognition
- PSE&G rated number one in J.D. Power customer satisfaction studies for both residential electric and natural gas service in the East among large utilities
- PSEG’s ESG credentials recognized by MSCI upgrades to triple A, named for the Dow Jones Sustainability North America index for the 15th year in a row, and listed in America’s most just companies for 2023
Employee Tragedy
- Moment of silence for employee killed by former employee
- Company providing resources to protect the health, safety, and well-being of all PSEG employees, including grief counseling
Q & A sessions,
Financial Results and Guidance
- GAAP earnings of $2.06 per share, and non-GAAP operating earnings of $3.47 per share for 2022
- 18th year in a row that PSEG has delivered non-GAAP results at or above management’s original operating earnings guidance
- Narrowed 2023 non-GAAP operating earnings to a range of $3.40 to $3.50 per share
- 2023 indicative annual dividend rate set at $2.28 per share
Key Strategic Highlights
- PSE&G invested over $3 billion of capital during 2022 in transmission upgrades, gas system modernization, energy efficiency, and electric vehicle infrastructure to address last-mile reliability
- Strategic decision to exit investment in offshore wind generation by selling 25% equity stake in Ocean Wind 1 backdoor joint venture partner Ørsted
- Pursuing regulated transmission projects offshore and investing in related transmission and distribution projects onshore and enabling the New Jersey wind port in Salem County
- Expecting to be the largest single-year spend in utilities’ 120-year history with over $3.4 billion for 2023 directed primarily towards infrastructure replacement, energy efficiency and last mile reliability
State Policies and Targets
- Executive orders that establish or accelerate the state’s existing 2050 targets for clean source energy, building electrification and electric vehicle adoption goals with new target dates in 2030 and 2035
- Board of Public Utilities and other state agencies were directed to collaborate with stakeholders to develop plans to reach these goals
- New proceeding to develop a future of natural gas utility plant to consider new revenue streams such as conversion of existing facilities to district geothermal and new technologies to meet the 2019 energy master plan goal of 50% reduced emissions below 2006 levels by 2030
Impact of Methane Reduction and Energy Efficiency Programs
- All gas investments are focused on replacement activities that are going to help reduce methane emissions
- Energy efficiency programs create more headroom on the bill, allowing electrification to move faster in those areas
Employee and ESG Recognition
- Employees remain PSEG’s most important resource, recognized for leadership and innovation
- MSCI upgrades PSEG to triple A, its highest ESG rating, named for the Dow Jones Sustainability North America index for the 15th year in a row, and recognized on the just 100 list of America’s most just companies for 2023
No bad stock 