PSEG Navigates Record Winter Storms to Post Q1 2026 Earnings Beat

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PEG Q1 2026 Earnings Call Transcript – Image for illustrative purposes only (Image credits: Unsplash)

Newark, N.J. – Public Service Enterprise Group Inc. kicked off 2026 with stronger-than-expected financial results, even as its teams managed the most severe winter storm to hit the region in 30 years.[1][2] The company reported net income of $741 million, or $1.48 per share, during the first quarter, a notable increase from the prior year. Non-GAAP operating earnings reached $1.55 per share, surpassing Wall Street forecasts and underscoring operational resilience amid extreme weather and high energy demand.[1]

Key Financial Highlights

Consolidated results reflected broad-based gains across segments. Net income rose 26% from $589 million in the first quarter of 2025, while non-GAAP operating earnings climbed to $778 million from $718 million.[2] This performance beat consensus estimates, with adjusted earnings topping projections by several cents per share.

Operating cash flow strengthened to $1.271 billion, up from $1.049 billion a year earlier, supporting ongoing investments. Average diluted shares outstanding held steady at around 500 million.

• GAAP EPS: $1.48 (vs. $1.18 in Q1 2025)
• Non-GAAP EPS: $1.55 (vs. $1.43 in Q1 2025)[1]
• PSE&G net income/non-GAAP earnings: $577 million (vs. $546 million)
• PSEG Power & Other non-GAAP earnings: $201 million (vs. $172 million)[2]

Storm Response and Operational Strength

PSEG’s utility subsidiary, PSE&G, demonstrated best-in-class reliability during multiple extreme weather events. Crews restored service within 24 hours after the historic storm and handled single-digit temperatures that drove the highest gas send-out since 2019.[1] These efforts minimized disruptions for customers despite weather 5% colder than normal and 8% colder than the previous year.

PSEG Nuclear contributed significantly, achieving a 95.5% capacity factor at Salem Unit 2 and delivering 8 terawatt-hours of carbon-free baseload energy to New Jersey and the broader grid.[2] Lower operation and maintenance costs across the company added about $0.06 per share to results.

Ralph A. LaRossa, PSEG’s chair, president and CEO, emphasized the role of infrastructure investments and workforce dedication. “PSEG’s investments in critical energy infrastructure and our dedicated workforce that worked tirelessly to restore service in frigid conditions proved to be the key factors in our ability to deliver best-in-class storm response and reliability,” he stated.[2]

Segment Performance Drives Gains

PSE&G led the quarter’s success with higher earnings fueled by investments in energy efficiency programs, gas system modernization, and transmission infrastructure. Incremental gas margins from the GSMP II extension roll-in also contributed positively. Customer growth remained steady at about 1% year over year for both electric and gas residential accounts.

These advances offset higher depreciation, interest expenses, and operation and maintenance costs tied to the capital program. PSE&G deployed roughly $800 million in capital during the quarter and stayed on pace for $4.2 billion in full-year spending.[1]

PSEG Power and Other saw net income jump to $164 million from $43 million, with non-GAAP earnings up due to higher realized prices, increased gas volumes, and capacity revenues. Declines in O&M expenses provided an additional boost, though partially countered by lower generation volumes and the lack of zero-emission certificates.

Weather-normalized demand and decoupling mechanisms in PSE&G limited the quarter’s margin impacts from colder conditions. Financing activities remained disciplined, including $1 billion in medium-term notes issued and limited exposure to variable-rate debt at 4%.

Regulatory Wins and Customer Relief

Customers stood to benefit from several developments. Electric rates will remain flat in 2026, in line with New Jersey Governor Sherrill’s executive orders on utility costs. Basic Generation Service auction results promise a 1.8% residential bill reduction starting June 1. Residential natural gas rates stayed flat from February 1 through the 2025-2026 heating season, yielding the region’s lowest bills.[1]

A Federal Energy Regulatory Commission transmission reallocation could deliver over $100 million in refunds to PSE&G customers once implemented by PJM, though litigation continues. The company also launched a demand response program with more than 32,000 participants and rolled out residential time-of-use rates using advanced metering infrastructure.

Steady Guidance and Long-Term Growth Path

Executives reaffirmed the full-year non-GAAP operating earnings outlook at $4.28 to $4.40 per share. Liquidity totaled $3.9 billion at quarter-end, including $400 million in cash, with all revolving credit facilities extended through March 2031.

Looking further ahead, PSEG targets a 6% to 8% compound annual growth rate in non-GAAP operating earnings through 2030, supported by regulated capital plans of $22.5 billion to $25.5 billion for PSE&G and $24 billion to $28 billion enterprise-wide. No new equity issuance or asset sales are required, setting the company apart from peers. An indicative dividend rate of $2.68 per share marks the 15th consecutive annual increase, at a 6% annualized pace.[1]

LaRossa noted the strategy’s execution. “We continue to execute on our long-term strategy to grow PSEG’s non-GAAP Operating Earnings by a compound annual rate of 6% to 8% through 2030 – without the need to issue new equity or sell assets – which remains a core differentiator from our peers.”[2] This positions PSEG well for sustained value creation amid evolving energy demands and regulatory landscapes.

As PSEG balances reliability, affordability, and growth, its Q1 performance offers a foundation for navigating the year’s remaining challenges, from summer peaks to infrastructure expansions.