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Infrastructure

FirstEnergy Reports Falling Demand (FE, AEP)

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By Douglas A. McIntyre Updated Published
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FirstEnergy Corporation (NYSE:FE) reported 2008  EPS of $4.38, higher than anticipated EPS of $4.33. Revenue for the year also beat expectations, coming in at $14.6 billion compared with average estimates of $14.51 billion.  What may be more interesting than the earnings is the trends in usage.

The company saw an overall decrease in electricity sales of 2.5% from 2007 to 2008. In the fourth quarter, retail sales dropped 4.8% and wholesale sales dropped 3.4%. Distribution deliveries fell 1.9% for the year and 4% for the fourth quarter on lower demand from industrial customers.

FirstEnergy’s performance is nearly identical with that of American Electric Power Corporation (NYSE:AEP). AEP reported 2008 EPS of $3.43, and guided 2009 EPS to $3.00-$3.40. FirstEnergy did not provide guidance, but falling demand for electricity, especially from industrial customers does not inspire confidence.

Analysts had early 2009 EPS estimates for FirstEnergy at $4.73. Barring a significant turnaround in demand, that does not seem likely. Shares in FirstEnergy are up about 1.25% in early trading.

Paul Ausick
February 24, 2009

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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