FirstEnergy (FE 0.13%) announced first-quarter results before the market opened this morning. The company reported non-GAAP earnings of $0.39 per share, which was $0.02 below what analysts were expecting. This miss, along with what the company called "extremely challenging market conditions" caused it to lower its full-year outlook.

FirstEnergy actually enjoyed strong performance in both its distribution and transmission businesses, both of which met the company's expectations. Total distribution deliveries rose 6% due to the colder than normal winter. Sales to residential customers increased by 11%, while commercial deliveries rose 6% and industrial sales moved up by 1% over the first quarter of last year.

Meanwhile, results from the company's transmission business were in-line with the previous year as higher revenue was offset by increased expenses. The company noted that it continues to make progress on its transmission investment plan, which should produce higher earnings as the economy improves.

However, these segments only partially offset the impact of the tough business climate in the company's competitive business. The company's commodity margin decreased significantly as higher purchased power costs, increased customer demand, and higher service costs affected results. The company sees this segment remaining challenged throughout the year.

Because of this FirstEnergy now sees its full-year operating earnings coming in a range of $2.40 to $2.60 per share, which is below the previous estimate of $2.45 to $2.85 per share. While the company is taking steps to mitigate the market volatility of its competitive business, it still sees the business being a drag on earnings throughout the year.