PSEG net income falls 39.5% but operating earnings edge up, guidance held (NYSE: PEG)

What happened

Public Service Enterprise Group (NYSE: PEG) kept its $4.28 to $4.40 per share 2026 operating earnings guidance even though third-quarter GAAP income fell.

Non-GAAP operating earnings rose to $574 million from $565 million a year earlier. They strip out nuclear decommissioning trust and mark-to-market swings. GAAP net income fell 39.5% to $376 million from $622 million.

Per diluted share, net income was $0.76 against $1.24, and operating earnings were $1.15 against $1.13. Through nine months, operating earnings were $3.56 per share against $3.33. Net income was $2.91 against $3.59.

Key numbers

Metric	Latest	Change	Source
Q3 non-GAAP operating earnings	$574 million	from $565 million, +1.6%	SEC 8-K earnings release (Exhibit 99), change calculated by OptimistFi
Q3 GAAP net income	$376 million	from $622 million, -39.5%	Calculated from SEC 8-K
Q3 non-GAAP operating earnings per share	$1.15	from $1.13, +$0.02	SEC 8-K earnings release (Exhibit 99), change calculated by OptimistFi
Q3 PSE&G net income	$506 million	from $515 million, -1.7%	Calculated from SEC 8-K
Q3 regulated investment	about $1.1 billion		SEC 8-K presentation (Exhibit 99.1)
2026 non-GAAP operating earnings guidance per share	$4.28 to $4.40		SEC 8-K presentation (Exhibit 99.1)

Read more: Public Service Enterprise Group (PEG) company research

Where the GAAP gap comes from

The reconciliation explains the split. Operating earnings ran $198 million above net income this quarter. A year earlier they ran $57 million below it. Mark-to-market positions produced a pre-tax loss of $251 million, against a $20 million gain in the third quarter of 2025.

The nuclear decommissioning trust swung to a $21 million pre-tax loss from a $70 million gain. Income taxes offset $74 million of those items.

The effect shows up in PSEG Power Other, which includes the nuclear fleet. It posted a GAAP net loss of $130 million against income of $107 million. Its operating earnings rose to $68 million from $50 million.

The release credits lower operating and maintenance costs, because last year's third quarter included a Hope Creek refueling outage. It also cites higher realized prices and more nuclear generation, partly offset by higher taxes. The nuclear fleet ran at a 95.5% capacity factor. Salem Unit 1 began a scheduled refueling outage in October after a 491-day run.

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PSE&G earnings slip as costs run ahead of rates

PSE&G, the regulated utility, earned $506 million, down $9 million from $515 million a year earlier. The release says investments in energy efficiency and transmission and a gradual rise in electric and gas customers helped. Higher depreciation and interest costs on investments not yet in current rates, plus the timing of taxes, more than offset them.

PSE&G's interest expense rose to $183 million from $162 million. Depreciation rose to $291 million from $277 million. Together that is $35 million more. For the nine months, PSE&G earned $32 million more than a year earlier.

Why it matters

OptimistFi has argued that PSEG's value depends on regulators and power markets letting heavy utility investment turn into per-share earnings. This quarter gives a mixed read. Operating earnings per share edged up. PSE&G's profit slipped because its costs arrive before the rates that recover them.

The spending itself is on track. Regulated investment was about $1.1 billion in the quarter against a full-year 2026 plan of about $4.2 billion. The five-year program is more than 90% regulated. PSEG says it can fund it without issuing new equity or selling assets. PSEG paid a dividend of $0.67 per share in the quarter, up from $0.63.

Share count is not diluting. Diluted shares were 499 million against 501 million a year earlier. Total debt was $25.63 billion at Sept. 30, up from $24.07 billion at Dec. 31, 2025. Consolidated interest expense for the quarter rose to $280 million from $253 million.

The risks the filing lists bear on that bargain. It warns that PSE&G's proposed investment programs may not be fully approved and that capital investment may come in below plan. It also warns that concerns about power supply and affordability could lead policymakers to act in ways that hurt growth. PSEG says it is prioritizing customer affordability.

What's next

PSEG's conference call at 11:00 a.m. ET on Nov. 2 reviews the quarter, guidance and other matters.

The next test is the fourth-quarter report. Against nine-month operating earnings per share, the guidance range implies $0.72 to $0.84 for the fourth quarter, by OptimistFi's arithmetic. Reaching that range with PSE&G earnings holding up would support the case. Another year-over-year decline at PSE&G would weaken it.

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