Snapshot
PPL Corp reported $2.27B of revenue in Q4 2025, up 2.8% year over year, with diluted EPS of $0.36 and an operating margin of 20.9%.
- Revenue
- $2.27B
- YoY growth
- +2.8%
- Diluted EPS
- $0.36
- Operating margin
- 20.9%
What management said
- •We will also refer to non-GAAP measures, including earnings from ongoing operations.
- •This is causing utilities across the country to increase their capital investment plans significantly to combat Mother Nature, and the same applies here at PPL.
- •From a financial perspective, we achieved ongoing earnings of $1.81 per share, 7.1% growth from our prior-year results and in line with the midpoint of our forecast.
- •Building off our strong year in 2025, today, we announced an updated business plan that extends our growth outlook while keeping customer affordability and our strong credit profile front and center.
- •For 2026, we're issuing ongoing earnings guidance of $1.90-$1.98 per share, with a midpoint of $1.94 per share, representing 7.2% growth from 2025.
- •We're extending our 6%-8% annual EPS growth target through at least 2029, expecting the EPS CAGR through 2029 to be near the top end of that range based off of our 2025 ongoing earnings.
- •Importantly, beyond this strong base plan, we see several identifiable upside opportunities to further enhance or extend our earnings growth over time.
- •These include earnings from competitive transmission projects, additional transmission and distribution investments to support the significant economic development that we're seeing in both Pennsylvania and Kentucky, and additional generation needs in Kentucky.
- •It also includes earnings from our joint venture with Blackstone, which I'll cover in more detail in a few slides.
- •We project capital investment needs of $23 billion from 2026 through 2029, up from $20 billion in our prior plan period.
- •The result of these investments is an estimated rate base CAGR of about 10.3%, providing a strong foundation for predictable and durable earnings growth.
- •In support of our expected capital expenditures, the plan reflects total equity needs of about $3 billion from 2026 to 2029.
What went well
- •PPL achieved full-year 2025 ongoing earnings of $1.81 per share, representing 7.1% growth from the prior year and in line with the midpoint of its forecast, while delivering GAAP earnings of $1.59 per share versus $1.20 in 2024.
- •The company issued 2026 ongoing earnings guidance of $1.90-$1.98 per share with a $1.94 midpoint, representing 7.2% growth, and extended its 6%-8% annual EPS growth target through at least 2029 with a CAGR expected near the top end of the range.
- •PPL increased its capital investment plan to $23 billion for 2026-2029, up from $20 billion, supporting an estimated rate base CAGR of about 10.3%.
- •The company outperformed its O&M savings target by about $20 million, reaching approximately $170 million in run-rate savings versus the 2021 baseline, about a year ahead of its $175 million target for end of 2026.
- •The KPSC issued final Kentucky rate case orders approving an aggregate increase of approximately $233 million (within $2 million of the stipulation), higher allowed ROEs of 9.775%, the pilot generation recovery mechanism, the extremely high load factor tariff, and Mill Creek 2 cost recovery.
- •PPL raised its quarterly dividend nearly 5% to $0.285 per share and highlighted a top-tier total return proposition of 10%-12%, supported by economic development including a $3.5 billion Eli Lilly investment in Allentown.
What went wrong
- •The KPSC did not approve the proposed earnings sharing mechanism that had been tied to PPL's agreement to stay out of Kentucky rate cases through mid-2028, causing the company to reassess the timing of its next Kentucky rate case and file a motion for reconsideration.
- •The Rhode Island segment decreased by $0.02 per share versus 2024 and was $0.06 below the 2025 forecast due to several true-ups and higher operating costs related to system costs, non-recoverable storm costs, and miscellaneous items.
- •PPL modified its annual dividend growth rate target down to 4%-6% while it issues equity to fund the expanded capital plan.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Ongoing earnings per share | FY2026 | n/a (initial 2026 guidance) | $1.90-$1.98, midpoint $1.94 (7.2% growth) | new |
| Annual EPS growth target | through at least 2029 | 6%-8% through at least 2028 | 6%-8% through at least 2029, CAGR near top end | extended one year |
| Capital investment plan | 2026-2029 | $20 billion (prior plan period) | $23 billion | increased $3 billion |
| Rate base CAGR | 2025-2029 | 9.8% | 10.3% | increased |
| Equity needs | 2026-2029 | n/a | about $3 billion total (~$1 billion already executed, ~$2 billion remaining) | new |
| Annual dividend growth target | plan period | prior dividend growth target | 4%-6% | modified down while issuing equity |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Full-year GAAP EPS | $1.59 vs $1.20 in 2024 | Driven by incremental returns on capital investments, higher transmission revenues, rider recovery, and lower O&M, partially offset by higher interest expense. |
| Full-year ongoing EPS | $1.81 vs $1.69 in 2024 (up $0.12) | Incremental returns on regulated capital investments and cost discipline, partially offset by higher interest expense from additional financing. |
| Kentucky segment (full year) | up $0.09 per share | Higher sales volumes largely due to weather, higher earnings from CapEx, and lower O&M, partially offset by interest expense. |
| Pennsylvania segment (full year) | up $0.04 per share | Higher transmission revenue, distribution rider recovery, higher sales volumes, and lower operating costs, partially offset by higher depreciation and interest expense. |
| Rhode Island segment (full year) | down $0.02 per share | Higher operating costs and other factors, partially offset by higher distribution revenue; also $0.06 below forecast due to true-ups and one-time costs. |
| Q4 Kentucky segment | up $0.02 per share | Higher sales volumes from favorable weather and higher earnings from capital investments, partially offset by higher interest expense. |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Data center pipeline (PA) | 20.5 GW prior quarter | up another 23% this quarter | growing |
| Capital plan size | $20 billion (2025-2028) | $23 billion (2026-2029) | expanding |
| Blackstone JV | advancing, no contracts signed | no earnings assumed in plan, but potential back-end upside; turbines and multi-GW land parcels progressing | advancing |
| Kentucky load forecast | 2.8 GW prior quarter (different mix) | 2.8 GW probability-weighted with ~2.5 GW more gross projects in queue | growing underneath |
| Equity funding | forwards executed in 2025 | ~$1 billion executed, ~$2 billion remaining of ~$3 billion need | de-risked |
Q&A summary
Can you give more color on the Pennsylvania rate case and whether the one-day hearings or black-box settlements signal anything?
Sorgi said the case is going as expected with briefings in March and a final order in June, and that a constructive outcome does not hinge on a settlement. He said the hearing focused mainly on data center load impact on customer affordability (a transmission, not distribution, issue) and on proposed net metering rule changes, and that any settlement announcements in Pennsylvania typically come around main briefs, not initial hearings.
Could the Blackstone JV generation announcement come off-cycle rather than waiting for an earnings call?
Sorgi said PPL would not necessarily wait for an earnings call and would announce a significant event off cycle, and that for near-term ramping needs PPL is looking at technologies that could come online in the 2028-2029 timeframe versus 2031-2032 for the larger CCGTs.
What were the data center customers planning to source generation from, and is there risk they leave the region?
Sorgi said hyperscalers had prioritized speed of grid connection and assumed they would procure energy from the PJM market, but resource adequacy pressure has brought them to the table with much higher urgency. He said PPL is not seeing customers pull out over the generation issue, with the pipeline up another 23%, and that Pennsylvania is looking more attractive to hyperscalers after the transmission network performed flawlessly during a recent cold spell.
Can you size the upside opportunities and how much would be financed with equity?
Bergstein declined to quantify the upside from competitive transmission, additional T&D, Kentucky generation, and the JV, saying the intent was to show confidence in the plan and where upside comes from. He offered that adding $3 billion of capital came with a $1 billion equity increase as a rough rule of thumb, with other factors influencing the amount, and Sorgi noted the upsides generally do not pressure customer bills.
On the Kentucky 2.8 GW load, is that fully in the plan versus the 1.8 GW?
Sorgi said this quarter's 2.8 GW is probability-weighted and contains nearly 2.5 GW more gross projects than the prior 2.8 GW. The plan supports only the 1.8 GW of generation under way (solar, deferred 400 MW battery pushed to 2030, combined cycles, and Ghent remediation), and if the 2.8 GW materializes PPL could file a CPCN as early as 2026, likely favoring smaller, faster generation to match data center ramp rates.
Was the Rhode Island $0.06 drag a one-time issue or will it be remediated by the rate case?
Bergstein said it is a bit of both, with some items remediated through the rate case and others (such as the transmission revenue true-up) truly one-time, and that PPL generally expects positive earnings performance from Rhode Island going forward after these true-ups and one-time items.