PSEG Q2 2026 earnings: Adjusted profit rises as GAAP income falls

PSEG (NYSE: PEG) reported Q2 2026 operating revenue of $2.554 billion, down about 9% from $2.805 billion a year earlier, while diluted GAAP EPS fell to $0.67 from $1.17. Non-GAAP operating EPS moved in the opposite direction, rising to $0.86 from $0.77. PSE&G earnings increased modestly, while PSEG Power & Other generated higher non-GAAP earnings but recorded a GAAP loss.

Core financial results

Consolidated operating expenses increased to $2.093 billion from $1.988 billion as energy, operation and maintenance, and depreciation expenses all rose. Combined with lower revenue, this reduced operating income and compressed the operating margin.

The company-defined non-GAAP measure presented a different picture. Non-GAAP operating earnings increased by approximately 11%, supported by higher earnings at both PSE&G and PSEG Power & Other.

PSEG excludes Nuclear Decommissioning Trust activity, mark-to-market accounting and certain infrequent items when calculating non-GAAP operating earnings. That measure is not directly comparable with GAAP net income or similarly named measures from other companies.

Business and segment performance

PSE&G remained the principal earnings contributor. Its results reflected investments in energy efficiency, gas system modernization and transmission, partly offset by higher operation and maintenance costs, depreciation, interest expense and a prior-year transmission true-up. Quarterly electric sales rose 2%, while total gas sales declined 23%, including a 45% reduction in non-firm commercial and industrial gas volumes.

PSEG Power & Other reported lower revenue and a GAAP loss, but its non-GAAP operating earnings increased. The company attributed its operating results to higher realized prices and increased nuclear generation, partly offset by the absence of zero-emission certificates following their expiration in May 2025, as well as higher interest expense and taxes.

Segment revenue figures are before $117 million of intercompany eliminations in Q2 2026 and $146 million in Q2 2025. Nuclear operations produced approximately 7.8 TWh during the quarter at a 92.0% capacity factor.

Market-to-market accounting drove the GAAP and non-GAAP split

The decline in GAAP profit did not reflect the direction of PSEG’s non-GAAP operating measure. In Q2 2026, the reconciliation from $334 million of net income to $425 million of non-GAAP operating earnings included a $258 million pretax mark-to-market loss, a $153 million pretax gain from Nuclear Decommissioning Trust activity and a $14 million related tax adjustment. Together, the reconciling items added $91 million to GAAP net income.

The comparison worked differently in Q2 2025. GAAP net income of $585 million exceeded non-GAAP operating earnings of $384 million, with total reconciling items reducing the non-GAAP figure by $201 million. Consequently, market-linked accounting items explain a substantial portion of the year-over-year GAAP decline, while the company-defined operating measure increased.

Profitability, cash flow and balance sheet

Cash flow information was provided for the first six months rather than Q2 alone. First-half operating cash flow increased to $1.821 billion from $1.527 billion, an improvement of approximately 19%. Investing outflows increased to $1.451 billion from $1.388 billion, while financing outflows rose to $310 million from $78 million. Cash, cash equivalents and restricted cash ended the period at $216 million, compared with $215 million a year earlier.

Total debt was $24.541 billion on June 30, 2026, up from $24.074 billion at the end of 2025. Long-term debt increased by $1.046 billion, while commercial paper and loans declined by $579 million. Stockholders’ equity rose to $17.329 billion from $16.982 billion over the same six-month period.

Earnings guidance

PSEG maintained its existing 2026 non-GAAP operating EPS range and reaffirmed its longer-term growth outlook. There was no quantitative change to either target following the second-quarter results.

PSEG does not provide a GAAP reconciliation for the EPS guidance because it says future mark-to-market and Nuclear Decommissioning Trust gains or losses cannot be forecast reliably.

Management perspective

Chair, President and CEO Ralph LaRossa emphasized the performance of PSE&G’s reliability investments during severe storms in early July, after the quarter ended. The utility restored service to approximately 380,000 customers, with nearly all affected customers reconnected within 24 hours. PSE&G also recorded a summer peak load of 10,446 MW on July 2, its highest in 14 years.

Management said PSEG continues to evaluate opportunities beyond its existing long-term forecast, including potential multiyear contracts for nuclear output. It also stated that the balance sheet can support a five-year capital investment program of $24 billion to $28 billion without issuing new equity or selling assets.

Recent insider transactions

The supplied six-month insider summary reports 336,974 shares purchased across 10 transactions and 18,158 shares sold across eight transactions, resulting in net purchases of 318,816 shares. It also reports total insider holdings of approximately 642,830 shares. The recent records include stock awards as well as sales, so the transaction classifications should be considered separately rather than treated as equivalent forms of discretionary trading.

These records do not by themselves establish insiders’ views about PSEG’s future performance.

Risks investors need to watch

• GAAP earnings volatility: Mark-to-market accounting and Nuclear Decommissioning Trust activity created a large difference between GAAP and non-GAAP results. Future movements could continue to affect reported net income materially.
• Rising utility costs: Higher operation and maintenance costs, depreciation and interest expense partially offset PSE&G’s investment-driven earnings growth during the quarter.
• Reduced support for nuclear operations: Zero-emission certificates ended in May 2025. Higher realized prices and nuclear output helped this quarter, but the lost certificate contribution remains an offset to PSEG Power & Other results.
• Capital plan and regulatory execution: PSEG’s $24 billion to $28 billion investment program depends on project execution, regulatory approvals and PSE&G’s ability to recover costs and earn authorized returns.

Summary

PSEG’s second-quarter results were defined by lower consolidated revenue and GAAP profit but higher non-GAAP operating earnings. PSE&G delivered modest earnings growth, and PSEG Power & Other benefited on an adjusted basis from realized pricing and nuclear generation, even as accounting items drove the segment to a GAAP loss. The principal items to monitor are the cost of utility investment, market-linked GAAP volatility, nuclear economics and execution of the capital plan under the unchanged 2026 guidance.