Pacific Gas & Electric Co.
PCG · NYSE
Next quarter
Reports Oct 22, 2026.
Consensus is $0.40 EPS for Sep 2026 across 3 estimates, ranging $0.35 to $0.43.
PCG Jun 2026
- 8.11%
- +1.77%
- $0.37
- $0.40
- —
- $5.90B
Reported results
- $5.90B
- $1.26B
- 21.40%
- $761.00M
- $0.33
Highlights
- Core earnings: Non-GAAP core EPS was $0.40, $0.03 above the $0.37 consensus estimate and an 8.11% surprise; core earnings rose 36.5% year over year to $920 million.
- GAAP improvement: GAAP diluted EPS increased to $0.33 from $0.24, while income available to common shareholders rose 41% to $733 million; net income was $761 million versus $549 million.
- Guidance: Full-year 2026 non-GAAP core EPS guidance was reaffirmed at $1.64-$1.66, with the company on track for its 2%-4% non-fuel O&M cost-reduction target.
- Operating leverage: Operating income increased 15% year over year to $1.26 billion on essentially flat revenue of $5.90 billion, helped by higher rate base and lower quarterly O&M.
- O&M savings: Utility O&M expense fell 11% to $2.54 billion, or $317 million, primarily because 2025 included approximately $180 million of deferred costs recognized through interim rate relief.
- Wildfire costs: Wildfire Fund expense rose 16% to $126 million, while the company recorded a further $100 million charge for the Dixie fire, taking the aggregate liability to $2.25 billion before recoveries.
- Capital and funding: The Utility completed a $2.2 billion bond issuance in June, bringing 2026 Utility debt financing to $4.4 billion; total liquidity was approximately $6.5 billion at quarter-end.
- Investment program: Six-month Utility capital expenditures were $6.3 billion, up $623 million year over year, and 2026 capital spending is estimated at $12.4 billion, including wildfire mitigation and customer connections.
- Load growth: The data-center pipeline exceeded 12 GW, with management stating that each GW of appropriately priced new load could reduce customers’ monthly electric bills by 1% or more.
Analysis
PG&E’s second quarter was a core-earnings beat and another step-up in regulated earnings, although revenue was flat and cash generation weakened. Non-GAAP core EPS was $0.40 versus the $0.37 consensus and $0.31 a year ago; GAAP diluted EPS was $0.33 versus $0.24. Income available to common shareholders rose 41% to $733 million, and operating income increased 15% to $1.26 billion on revenue of $5.90 billion, essentially unchanged from last year but below the prior quarter’s $6.88 billion revenue and $0.39 reported diluted EPS.
The defining feature was rate-base growth combined with cost control. Higher customer capital investment and net O&M savings more than offset a lower CPUC return on equity and higher Wildfire Fund expense. Quarterly O&M declined 11% to $2.54 billion, although six-month O&M was up 3% because the 2023 WMCE final decision shifted approximately $400 million of previously deferred costs into 2026. Management reaffirmed full-year core EPS guidance of $1.64-$1.66 and its 2%-4% non-fuel O&M reduction target. The quarter also highlighted the capital intensity and risk profile of the strategy: six-month capital expenditures reached $6.3 billion, liquidity was $6.5 billion, and wildfire liability and regulatory recovery remain material uncertainties.
Core earnings and guidance
PG&E delivered a clear core-earnings beat, with non-GAAP core EPS of $0.40 versus consensus of $0.37 and $0.31 in the year-ago quarter. Core earnings increased to $920 million from $674 million. GAAP earnings were lower because of non-core items totaling $164 million after tax, including $91 million of Wildfire Fund amortization, $35 million of investigation remedies and $35 million of prior-period regulatory impact.
- Six-month progress: Core EPS was $0.83 versus $0.64 in the first half of 2025, while GAAP EPS was $0.72 versus $0.51.
- Outlook: Full-year 2026 core EPS guidance remained $1.64-$1.66, implying the first-half core EPS result represented roughly half of the midpoint.
- Earnings drivers: Management attributed the year-over-year improvement primarily to higher rate base and net O&M savings, partly offset by a lower CPUC ROE and higher Wildfire Fund expense.
Rate base and cost control
The quarter showed the earnings model working despite little top-line growth. Revenue was $5.90 billion, up only $4 million year over year, but operating income rose $167 million to $1.26 billion as operating expenses fell 3% to $4.64 billion. Pass-through electricity costs increased $201 million and did not affect net income, while lower interim rate relief reduced revenue by approximately $180 million.
- Quarterly O&M: Utility O&M declined $317 million, or 11%, to $2.54 billion, primarily because the prior-year period included approximately $180 million of deferred expenses recognized through interim rate relief.
- Year-to-date mix: Six-month O&M increased $149 million, or 3%, to $5.64 billion, reflecting approximately $400 million of costs recognized under the 2023 WMCE final decision, partly offset by $240 million less interim-rate-relief costs.
- Regulatory recovery: The 2023 WMCE final decision authorized recovery of $1.9 billion against a $2.18 billion request, and PG&E has filed for rehearing.
Wildfire exposure and regulation
Wildfire remains the principal earnings and balance-sheet uncertainty. Wildfire Fund expense increased $17 million year over year to $126 million because of accelerated amortization associated with Southern California Edison’s Eaton fire recovery disclosure. The company also increased its Dixie fire liability while continuing to pursue insurance, Wildfire Fund and regulatory recoveries.
- Dixie liability: The aggregate estimated Dixie fire liability reached $2.25 billion before recoveries after a $100 million second-quarter charge; cumulative payments for the Dixie and Mosquito fires totaled $2.34 billion through June 30.
- Recorded recoveries: The Utility had recorded $1.25 billion of probable Wildfire Fund recoveries for the Dixie fire and received $1.01 billion by quarter-end; it also carried $638 million of regulatory recovery receivables for Dixie and $61 million for Mosquito.
- Pending proceedings: A proposed decision is expected by November 2026 on the Kincade and Dixie AB 1054 cost-recovery application, while decisions are expected by October 2026 for the 2023 WGSC proceeding and February 2027 for the 2024 WMCE application.
- Mitigation execution: PG&E constructed 37 miles of underground powerlines and strengthened or covered 100 miles of lines during the quarter; its continuous monitoring system has reportedly avoided 28 potential ignitions and 19.6 million outage minutes since January 2025.
Capital spending and financing
PG&E continues to fund a large infrastructure and wildfire-mitigation program through debt and operating resources. Utility six-month investing cash flow included $6.3 billion of capital expenditures, up from $5.7 billion in the prior-year period, while operating cash flow declined 11% to $3.64 billion because of higher electric procurement costs and lower CAISO-related cash receipts.
- 2026 investment plan: The Utility expects capital expenditures of $12.4 billion for the full year, with higher spending directed toward electric distribution connections, undergrounding and wildfire-risk mitigation.
- Debt markets: The June issuance comprised $800 million of 5.050% bonds due 2031, $800 million of 5.600% bonds due 2036 and $600 million of 6.300% bonds due 2056.
- Liquidity: PG&E reported approximately $6.5 billion of total liquidity at June 30, including $972 million of consolidated cash and $5.5 billion of revolving-credit availability.
- Capital structure: Management said PG&E Corporation does not expect to issue equity through 2030, while the Utility’s long-term capital structure target remains 52% common equity, 47.5% long-term debt and 0.5% preferred equity.
Demand and customer programs
Operational commentary pointed to potential future load growth alongside continued affordability and decarbonization initiatives. Data-center projects in the service area represented a pipeline of more than 12 GW, while the Utility continued connecting customers, electric-vehicle infrastructure and assistance programs.
- Data centers: Management said each GW of new data-center load, if appropriately priced, could reduce the average customer’s monthly electric bill by 1% or more.
- Grid connections: PG&E connected more than 3,930 electric customers and added more than 2,460 EV charging ports during the quarter.
- Customer assistance: The company delivered $15 million through REACH and Match My Payment programs to more than 47,000 low- and moderate-income customers.
- Environmental progress: The Utility reported a 60% reduction in methane emissions from its natural-gas system in 2025 versus the 2015 baseline, exceeding its 2030 target five years early.
