Snapshot
PPL Corp reported $2.77B of revenue in Q1 2026, up 10.8% year over year, with diluted EPS of $0.60 and an operating margin of 26.9%.
- Revenue
- $2.77B
- YoY growth
- +10.8%
- Diluted EPS
- $0.60
- Operating margin
- 26.9%
What management said
- •Based on these results and our outlook for the remainder of the year, we are reaffirming our 2026 ongoing earnings guidance of $1.90-$1.98 per share, with a midpoint of $1.94 per share.
- •Longer term, we continue to project approximately $23 billion of capital investment through 2029, resulting in average annual rate base growth of 10.3%.
- •This capital projection excludes any investments that may stem from our joint venture with Blackstone, which I'll provide an update on shortly.
- •We're also reaffirming our long-term financial targets, including 6%-8% annual EPS growth through at least 2029, with compound annual growth expected near the top end of that range.
- •We also continue to target annual dividend growth of 4%-6%, along with strong credit metrics throughout our plan period, which support a very compelling risk-adjusted total return for our share owners.
- •The settlement achieves a balance between our strong commitment to affordability and maintaining safe and reliable service for our customers while supporting the significant demand growth in our service territory with large load customers.
- •The settlement also enhances support for vulnerable customers by increasing hardship fund bill credits, improving access to assistance programs, eliminating reconnection fees, streamlining return of security deposits, and boosting the annual low-income weatherization budget.
- •The reconsideration focuses on a limited number of substantive issues, including such modifications the KPSC made to the settlement and certain cost recovery and return determinations.
- •Parties have until May 26 to request a hearing or to ask for a decision based on the record in the case.
- •In Kentucky, we're excited to announce a couple of new partnerships to explore innovative generation technologies in support of the increasing electricity demand in our service territory.
- •This project is not in our current capital plan or earnings projections.
- •Any decision to move forward would be gated by economics, regulatory certainty, and our long-standing commitment to capital discipline.
What went well
- •PPL reported first quarter 2026 GAAP earnings of $0.60 per share and ongoing earnings from operations of $0.63 per share, an improvement of $0.03 per share versus Q1 2025, and reaffirmed full-year 2026 ongoing earnings guidance of $1.90-$1.98 per share with a $1.94 midpoint.
- •PPL Electric Utilities reached a constructive settlement with the majority of interveners in its Pennsylvania distribution base rate case that would result in bill increases of less than 4% across all customer classes despite a 10-year stay-out, and the administrative law judges recommended approval without modification.
- •PPL announced new Kentucky generation partnerships, including a collaboration with Rye Development to evaluate a 266 MW pumped storage hydro project (estimated $1.3 billion, targeted 2031 COD) and a collaboration with X-energy to explore deploying its Xe-100 small modular reactor for large load customers.
- •Rhode Island Energy received approval for over $330 million of infrastructure investments through its annual electric and gas ISR plans, the vast majority of what it requested, with recovery beginning April 1.
- •The company executed a $1.15 billion equity units offering in February, de-risking about two-thirds of the total equity needed for its capital expenditure plan, and remains on track for approximately $5.1 billion of planned 2026 investments.
- •Rhode Island Energy delivered top-quartile reliability and strong storm response, restoring power to 99% of customers within 48 hours during a late-February blizzard, and the company filed a new hold harmless commitment proposal to offset proposed rate increases with bill credits starting in Q1 2027.
What went wrong
- •Kentucky segment results were partially offset by lower sales volumes due to less favorable weather than Q1 2025, along with higher operating costs, higher depreciation, and higher interest expense.
- •PPL recorded special items of $0.03 per share in the quarter, primarily due to an ISO New England transmission ROE reduction and customer/meter system integration impacts.
- •LG&E and KU were granted rehearing on a limited number of substantive issues from the Kentucky base rate case, as the company continues to believe the KPSC should not have modified the negotiated settlement, with a decision hoped for in the third quarter.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| 2026 ongoing earnings per share | FY2026 | $1.90-$1.98, midpoint $1.94 | $1.90-$1.98, midpoint $1.94 | reaffirmed |
| 2026 planned investments | FY2026 | n/a | approximately $5.1 billion | on track |
| Capital investment plan | through 2029 | approximately $23 billion | approximately $23 billion (excludes Blackstone JV) | reaffirmed |
| Rate base growth | through 2029 | 10.3% average annual | 10.3% average annual | reaffirmed |
| Annual EPS growth target | through at least 2029 | 6%-8%, CAGR near top end | 6%-8%, CAGR near top end | reaffirmed |
| Annual dividend growth target | plan period | 4%-6% | 4%-6% | reaffirmed |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| GAAP EPS | $0.60 vs $0.56 in Q1 2025 | Special items of $0.03 per share from ISO New England transmission ROE reduction and system integration impacts, partially offset by regulatory asset treatment of Kentucky IT transformation costs. |
| Ongoing EPS | $0.63 vs $0.60 in Q1 2025 (up $0.03) | Higher base rate recovery in Kentucky and higher transmission revenues from capital investments, partially offset by higher depreciation and higher financing costs. |
| Kentucky segment | up $0.03 per share | Higher base rate recovery from new retail rates effective January 1, partially offset by lower sales volumes from less favorable weather, higher operating costs, depreciation, and interest expense. |
| Pennsylvania regulated segment | flat | Higher transmission revenue from capital investments offset by higher operating costs, depreciation, and interest expense. |
| Rhode Island segment | flat | Higher rider revenue returns including ISR mechanism and FERC formula rates offset by higher depreciation expense. |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Data center pipeline / transmission CapEx (PA) | $1.3 billion incremental transmission CapEx in plan | 28 GW pipeline; at least another half billion of upside beyond plan | growing |
| Kentucky generation needs | 1.8 GW supported in CPCN; 3.5 GW probability-weighted demand | increasingly likely to file another CPCN later this year | intensifying |
| Blackstone JV | advancing, no contracts signed | positive momentum; likely to announce something meaningful this year | advancing |
| New generation technologies (KY) | primarily gas CCGTs | adding pumped storage hydro (Rye) and small modular nuclear (X-energy) collaborations | diversifying |
| Equity funding | two-thirds de-risked path | $1.15 billion equity units offering executed; about two-thirds of total equity de-risked | de-risked |
Q&A summary
What is the timeline for the GenCo JV and when could contracts come together?
Sorgi said PPL has made a lot of progress over the past year and is encouraged by recent momentum as hyperscalers shift focus to securing generation. He said it is likely PPL would have something meaningful to announce this year, but cautioned these are complex agreements that must move through many parts of the hyperscaler organizations, adding he would be surprised if PPL were not announcing something meaningful this year.
How much of the slide-seven data center growth is incremental to the current earnings and capital plan?
Sorgi said the February plan included about $1.3 billion of incremental transmission CapEx, and that serving the 28 GW likely adds at least another half billion of upside, some of which would be spent beyond the 2029 plan period.
What are your thoughts on the PJM Reliability Backstop Auction (RBA) proposal and its impact on PPL?
Sorgi said PPL supports PJM's focus on bilateral contracting but stressed significant work is needed to ensure backstop auction costs are borne by the large loads they are intended for and not shifted to other customers. He said if approved as proposed, PPL Electric would need state-level protections, and JV participation depends on the final rules, with the active bilateral process remaining the priority.
After the Pennsylvania settlement and two-year stay-out, when would you need to go back in?
Sorgi confirmed the settlement embeds a two-year stay-out from the July 1 effective date, giving good visibility on a minimum of two years. He noted PPL stayed out for 10 years prior through financial and cost discipline, with AI and system consolidation offering new savings opportunities, and that the company will aim to stay out as long as it can.
As Kentucky load projections increase, what generation might you need and on what timing?
Bergstein said the resource depends on the customer and load ramp, and that with about $4 billion of generation projects approved and under construction PPL wants to see the existing pipeline advance first. He added that with probability-weighted demand at about 3.5 GW versus 1.8 GW in the prior CPCN, it is becoming more likely PPL files another CPCN later this year, especially if hyperscalers commit; Sorgi said one to three projects, likely including the battery, could appear.
What types of alternative generation technologies could come online sooner for the Blackstone JV?
Sorgi said it depends on what the hyperscaler offtaker wants, but batteries and possibly fuel cells are the technologies PPL can bring online sooner, while alternate forms are getting pushed closer to the CCGT timelines. He said it is hyperscaler-specific, with some wanting generation in line with their ramp and others comfortable relying on the existing PJM fleet until full ramp.