PSEG finds operating momentum beneath a weaker GAAP quarter

The headline number went backwards, but the measure PSEG uses to steer investors moved forward. Public Service Enterprise Group Incorporated (NYSE:PEG) reported third-quarter GAAP net income of US$376 million, down from US$622 million a year earlier, while non-GAAP operating earnings rose to US$574 million from US$565 million. The company maintained its 2026 non-GAAP operating earnings guidance of US$4.28 to US$4.40 per share.

Market-related items widen the GAAP and operating earnings gap

On a per-share basis, quarterly net income dropped to US$0.76 from US$1.24. Non-GAAP operating earnings, which exclude gains and losses tied mainly to the Nuclear Decommissioning Trust and mark-to-market accounting, increased to US$1.15 from US$1.13.

The reconciliation was unusually large: PSEG excluded US$198 million of quarterly items from net income, including a US$251 million pre-tax mark-to-market loss, partly offset by a US$21 million gain related to the nuclear decommissioning trust and associated tax effects. That makes the operating figure a cleaner guide to the company’s recurring performance by management’s definition, but it does not erase the weaker GAAP result.

Regulated utility remains the earnings anchor

PSE&G, the regulated utility, produced US$506 million of both net income and non-GAAP operating earnings in the quarter, slightly below US$515 million a year earlier. The company attributed the result to continued investment in energy efficiency and transmission, and gradual customer growth, with higher depreciation and interest costs and tax timing working in the opposite direction.

For the first nine months, PSE&G’s earnings increased to US$1.425 billion from US$1.393 billion. PSEG Power & Other delivered US$68 million of non-GAAP operating earnings, up from US$50 million, despite reporting a US$130 million GAAP loss. Across the group, nine-month operating earnings reached US$1.777 billion, or US$3.56 per share, compared with US$1.667 billion, or US$3.33 per share, in 2025.

Nuclear output supports cash generation and future optionality

PSEG Nuclear generated 8.2 TWh during the quarter at a 95.5% capacity factor, compared with 7.9 TWh and 92.4% a year earlier. Salem Unit 1 entered its scheduled refuelling outage after a 491-day operating run, while management said it intends to seek 20-year licence extensions for Salem Units 1 and 2 and Hope Creek.

The presentation also points to potential upside from higher nuclear capacity prices, long-term contracts and large-load customers, although these are opportunities rather than committed outcomes. PSEG said more than 95% of expected 2026 nuclear output was hedged and forecast total nuclear generation of 30 to 32 TWh for the year.

Capital plan tests balance-sheet discipline

Regulated investment reached roughly US$1.1 billion in the quarter, with full-year regulated capital spending of about US$4.2 billion on track. PSEG’s broader 2026 to 2030 capital programme totals US$24 billion to US$28 billion, more than 90% of it regulated investment, and management said it can fund the plan without issuing new equity or selling assets.

That claim will matter as the programme expands the asset base and financing burden. At September 30, total debt stood at US$25.634 billion, up from US$24.074 billion at the end of 2025, while consolidated debt represented 60% of capital. PSEG reported US$3.92 billion of available liquidity, providing a buffer but not removing the need for regulatory approvals and timely cost recovery.