Investors have long used the services of voice analysts to pick up clues that indicate CEO lying. In response, companies have done a better job preparing their CEOs to mask verbal tells. And then there was today's FirstEnergy call... no fancy voice analyst needed! It was obvious to anyone tuning in that Tony was very put upon to be there and have to answer questions. Very pointed questions.
The call began with much heavy sighing and attitude, and if that wasn't enough, once the questions from analysts began, the sound of someone scribbling furiously on a piece of paper to feed answers to company officials kept getting louder... and louder... and louder. Right.... that's the sound of a healthy company poised for enormous growth....
So, what's Tony's next great plan? Betting on guaranteed earnings from FirstEnergy's regulated business. If you've been listening in on the earnings calls of Ohio's utility Tweedledum and Tweedledee over the past few years, you may note that Tony the Trickster was so focused on "beating" rival AEP in the Ohio retail market, that he didn't see what was sneaking up behind him. AEP was forced to retreat from its competitive business a lot sooner, because FirstEnergy was so willing to take quantity over quality in order to sign up the most customers in Ohio. Fortunately for AEP, concentrating on its regulated business a lot sooner than FirstEnergy saved it from a lot of sighing and scribbling.
Oh, that competition thing... it can make smart men do really stupid things. Tony the Trickster got all offended when asked if the company would need to continue to inject cash in its loser competitive business segment, or if that part of the business would begin supporting itself. Truth hurts, doesn't it?
FirstEnergy finds itself squarely behind the curve now, so the next great plan is to start pumping money (i.e. "investing") into its regulated transmission business. What can go wrong with this plan? Lots.
FirstEnergy also plans to file base rate cases in West Virginia and Pennsylvania this year, despite the fact that its JCP&L rate case in New Jersey hasn't actually "derisked" the company. Tony forgot to tell analysts that it must file a West Virginia rate case as a result of its dumping of the Harrison power station into West Virginia's regulated system, not that it wants to file a rate case to increase earnings.
Tony says that "reality" caused the company to most effectively "reposition" itself because now is the time to make a move to eliminate uncertainty, speculation and rumors by refocusing the company.
You believe him, don't you?