So, you want to power the AI revolution? That’s the big bet PPL Corporation (PPL) is making. The utility’s stock moved higher Friday after it reported a quarter that was a bit of a mixed bag on the numbers, but came with a very clear message about the future: get ready to spend.
Let’s start with the report card. Operating revenue came in at $2.27 billion, which was below what analysts were hoping for. But the company sold 4% more electricity than a year ago, with its Kentucky business up 5.7% and Pennsylvania up 2.6%. More importantly, operating income jumped to $476 million from $377 million. Adjusted earnings per share landed right on target at 41 cents. So, not a blowout, but solid enough, especially when you see where all the money is going next.
And shareholders are getting a direct piece of that story. PPL is lifting its quarterly dividend by 4.6% to 28.50 cents per share. That payment goes out in April 2026 to shareholders on the books in March. More broadly, the company now says it plans to grow that dividend by 4% to 6% a year going forward. For income investors, that’s the kind of predictable raise you like to see from a utility.
But the real headline is what PPL plans to do with its cash. The company is going on a spending spree. It revised its capital spending guidance up to a whopping $23 billion for the years 2026 through 2029. That’s a $3 billion increase from its old plan and is meant to support what it estimates will be a 10.3% average annual growth rate for its rate base. For 2026 alone, it plans to invest about $5.1 billion.
Why the massive outlay? Two words: data centers. A huge chunk of this money is earmarked for building new generation in Kentucky and, crucially, expanding transmission capacity in Pennsylvania to support the explosive growth in power demand from data centers. PPL has a joint venture with Blackstone Infrastructure specifically for this purpose in Pennsylvania. It’s a direct play on the AI and cloud computing boom—everyone needs more electricity, and PPL is building the wires and plants to deliver it.
The company’s outlook reflects this confidence. It projects 2026 EPS in a range of $1.90 to $1.98, bracketing the consensus estimate of $1.95. Perhaps more significantly, it extended its targets for 6% to 8% annual growth in both earnings per share and dividends all the way through 2029.
On a call with analysts, President and CEO Vincent Sorgi tied this aggressive investment plan back to some impressive cost control. "By steadily building on our cost-saving efforts each year since 2021, we have achieved annual run-rate O&M savings of $170 million in 2025, putting us almost a year ahead of schedule and very close to our 2026 goal of $175 million," Sorgi said.
He argued this efficiency has directly benefited customers by delaying the need for rate hikes. "This O&M efficiency strategy enabled our utilities to go many years without requesting a base rate increase for our customers – ten years at PPL Electric Utilities, nearly five years at Louisville Gas and Electric and Kentucky Utilities, and eight years at Rhode Island Energy," Sorgi noted.
His closing remarks framed the strategy: "Moving forward, we will continue to mitigate bill increases as much as possible while we make critical investments in electric and gas network modernization, build new generation to meet demand growth in Kentucky, and advance our joint venture with Blackstone Infrastructure to meet growing data center demand in Pennsylvania."
In short, PPL is telling a story of disciplined spending in the past funding massive growth spending in the future. The market seemed to buy it, with shares closing up over 1% on the day.
