Snapshot
PPL Corp reported $2.24B of revenue in Q3 2025, up 8.4% year over year, with diluted EPS of $0.43 and an operating margin of 25.4%.
- Revenue
- $2.24B
- YoY growth
- +8.4%
- Diluted EPS
- $0.43
- Operating margin
- 25.4%
What management said
- •We will also refer to non-GAAP measures, including earnings from ongoing operations or ongoing earnings on this call.
- •Adjusting for special items, third-quarter earnings from ongoing operations were $0.48 per share.
- •Building on this strong performance, we've narrowed our 2025 ongoing earnings forecast range to $1.78-$1.84 per share, maintaining our midpoint of $1.81 per share.
- •Looking ahead, we continue to project $20 billion in infrastructure investments from 2025 through 2028, driving average annual rate-based growth of 9.8%.
- •We also remain well-positioned to deliver 6%-8% annual EPS and dividend growth through at least 2028, with EPS growth expected to be in the top half of that range.
- •As is customary, we'll provide an updated business plan on our year-end call, including our formal 2026 earnings forecast and roll forward of our longer-term outlook.
- •The agreement, filed with the Commission on October 20th, includes a revised aggregate increase of approximately $235 million in annual revenues and an authorized ROE of 9.9%.
- •The tariff helps to attract these customers and continues to drive economic growth in our service territories while ensuring adequate safeguards are in place for all customers.
- •These investments will ensure we continue to meet Kentucky's growing energy needs driven by record-breaking economic development and data center expansion, all while maintaining reliability and affordability for our customers.
- •The requested increase supports our need to build and maintain a stronger, smarter, and more resilient electric grid to better withstand increasingly severe weather, prevent outages, and improve service to our customers.
- •We are requesting a net revenue increase of just over $300 million, or 8.6%.
- •As more than $50 million of the base rate request includes revenue that is already reflected in customer bills through riders like the DSIC.
What went well
- •PPL reported third quarter GAAP earnings of $0.43 per share and ongoing earnings from operations of $0.48 per share, a $0.06 per share increase versus Q3 2024 driven by higher revenues from formula rates and rider mechanisms and lower operating costs.
- •On the strength of the quarter, PPL narrowed its 2025 ongoing earnings forecast range to $1.78-$1.84 per share while maintaining the $1.81 midpoint, and remained confident in achieving at least that midpoint.
- •LG&E and KU reached a proposed settlement with the majority of intervenors in their Kentucky base rate cases for an aggregate increase of approximately $235 million in annual revenues at a 9.9% ROE, including a stay-out provision through August 2028 and new generation and sharing mechanisms.
- •The KPSC approved much of the July 2025 CPCN stipulation, allowing LG&E and KU to construct the Brown 12 and Mill Creek 6 combined cycle units, install an SCR at Ghent Unit 2, and receive AFUDC and environmental cost recovery treatment.
- •PPL's Pennsylvania data center pipeline in advanced stages jumped more than 40% to 20.5 GW from 14.4 GW, with over 11 GW publicly announced and about 5 GW already under construction, plus an additional 70 GW in the queue.
- •The company de-risked equity financing by entering forward contracts to sell approximately $1 billion of equity under the ATM, bringing total forward agreements to approximately $1.4 billion of the $2.5 billion forecasted equity needs through 2028.
What went wrong
- •The KPSC declined to approve two proposed cost recovery mechanisms in the CPCN proceeding, one for Mill Creek 6 and one for keeping Mill Creek 2 open beyond 2027, requiring PPL to seek recovery in separate rate proceedings instead.
- •Keeping Mill Creek 2 open beyond 2027 will require about $30 million of incremental O&M and about $40 million of incremental CapEx through 2030 that PPL needs to secure recovery for before agreeing to continue operating the plant.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| 2025 ongoing earnings per share | FY2025 | midpoint of $1.81 (at least midpoint) | $1.78-$1.84 with $1.81 midpoint, at least midpoint | range narrowed, midpoint maintained |
| Annual EPS and dividend growth | through at least 2028 | 6% to 8%, top half | 6% to 8%, top half of range | maintained |
| 2025 infrastructure investment | FY2025 | over $4 billion | approximately $4.3 billion | refined |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| GAAP EPS | $0.43 vs $0.29 in Q3 2024 | Special items of $0.05 per share, primarily IT transformation costs and Rhode Island Energy integration costs. |
| Ongoing EPS | $0.48 vs $0.42 in Q3 2024 (up $0.06) | Higher revenues from formula rates and rider recovery mechanisms and lower operating costs, partially offset by higher interest expense. |
| Kentucky segment | up $0.02 per share | Higher sales volumes from favorable Q3 2025 weather, lower operating costs, and higher earnings from capital investments, partially offset by higher interest expense. |
| Pennsylvania regulated segment | up $0.02 per share | Higher transmission revenue from capital investments and higher distribution rider recovery, partially offset by higher interest expense. |
| Rhode Island segment | up $0.01 per share | Lower operating costs. |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Data center load pipeline (PA) | 14.4 GW in advanced stages | 20.5 GW in advanced stages, over 11 GW publicly announced, 70 GW more in queue | growing rapidly |
| Kentucky generation recovery | CPCN stipulation filed July 2025 | CPCN largely approved, but Mill Creek 2 and Mill Creek 6 mechanisms denied and moved to rate proceedings | partial setback, addressable |
| Equity financing de-risking | about $1.4 billion target framing | approximately $1.4 billion of $2.5 billion forecasted needs locked via forwards | progressing |
| Blackstone JV | announced prior quarter | no announcement yet but lots of activity; hyperscalers shifting focus toward securing generation | advancing |
Q&A summary
On the Kentucky CPCN, what information was missing for the commission to reject the Mill Creek 2 and Mill Creek 6 mechanisms, and is there a near-term EPS impact?
Sorgi said he is not concerned from an earnings perspective. For Mill Creek 6, the commission approved AFUDC treatment so there is no earnings impact, and the mechanism would not take effect until in-service in 2031. The mechanisms were denied without prejudice and the commission encouraged refiling, likely because it viewed a CPCN proceeding as not the proper arena for rate mechanisms. Mill Creek 2 is being addressed now in the open rate case.
On Pennsylvania resource adequacy, can the wires companies strike a middle ground with the IPPs on a long-term resource adequacy structure?
Sorgi said meaningful movement on the legislation requires resolution of the state budget impasse and the RGGI issue, both of which could be resolved by year-end. He expects committee debate early next year over whether to permit regulated generation, and said PPL would be open to a solution where utilities and IPPs agree, with the goal of getting new generation built and stabilizing capacity prices.
Can you peel back the 20.5 GW Pennsylvania pipeline and the cadence for formalizing it?
Sorgi pointed to appendix slide 25 for ramp rates and emphasized the growth from 3 GW in Q1 2024 to 20.5 GW. He credited the strength of PPL's transmission backbone for fast, cost-competitive connections, noted every project requires some upgrades, and said the 20.5 GW reflects projects with signed ESAs or LOAs carrying significant counterparty financial commitments including 100% credit support and an 80% minimum load.
Was the Mill Creek 2 O&M number annualized?
Sorgi clarified the figures are total increases between now and 2030: about $30 million of incremental O&M and about $40 million of incremental CapEx over that period.
How much Kentucky load should we expect in the next capital plan roll-forward, and should we think about the full gigawatt above the 1.8 GW CPCN?
Bergstein said the 2.8 GW versus 1.8 GW is a probability-weighted forecast that PPL continues to assess based on developer conversations, driving primarily additional generation investment plus some smaller T&D. Sorgi added that if more generation is needed, the deferred battery project would likely come back first since it can be built quickly to provide peaking support.
Could the growing data center concentration create an unhealthy revenue concentration or regulatory imbalance?
Sorgi said he is not overly concerned given the protections being built into tariff structures and ESAs, which guard existing customers if large loads underuse power. He added that he does not see hyperscalers needing less power; as chips advance, compute and electricity demand will likely grow, so PPL expects to support more, not less, data center power needs.