FirstEnergy Takes Another Multibillion-Dollar Hit From PlantsBy
Power plant exit costs come in at $2.4 billion pretax for 4Q
Company has pledged to exit generation business this year
FirstEnergy Corp., which has promised to get rid of its money-losing competitive power generation business this year, took another hit from it in the fourth quarter.
The U.S. utility owner, which received a $2.5 billion equity injection from activist investor Elliott Management Corp. and others in January, reported a fourth-quarter, pretax charge of $2.4 billion from plant writedowns and other exit costs, according to a statement. The Akron, Ohio-based company recorded $9.22 billion in charges in the year-earlier quarter related to the planned exit from the business.
The U.S. corporate tax cut to 21 percent from 35 percent also reduced earnings by $1.2 billion pretax. Utilities must decrease accruals for taxes that won’t need to be paid at the lower rate. FirstEnergy’s charge appears similar to those taken by other utility owners, said Kit Konolige, a New York-based analyst for Bloomberg Intelligence.