We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Exelon (EXC) Trumps Earnings and Revenue Estimates in Q3
Read MoreHide Full Article
Exelon Corporation (EXC - Free Report) reported third-quarter 2016 adjusted operating earnings of 91 cents per share, beating the Zacks Consensus Estimate of 74 cents by 23%. Quarterly earnings were also 9.6% higher than year-ago tally of 83 cents. Reported earnings were also above management’s guidance range of 65 to 75 cents per share.
The bottom-line improvement was driven by regulatory rate hikes and favorable weather, which boosted demand for utility services.
On a GAAP basis, quarterly earnings were 53 cents per share, compared with 69 cents a year ago. The difference between GAAP and adjusted operating earnings was due to the combined impact of hedging activities, impairment of assets, plant retirements, other one-time charges and a gain on fund investments combining to a net charge of 38 cents.
Exelon's total operating revenues of $8,836 million surpassed the Zacks Consensus Estimate of $8,698 million by 1.6%. Quarterly revenues also increased 19.2% year over year.
Quarterly Highlights
Exelon's total operating expenses increased 19.6% year over year to $7,248 million. The increase in operating expenses was primarily due to higher purchased power and fuel expenses, and operating and maintenance expenses.
The company reported operating income of $1,589 million in the quarter, up 17.2% from $1,356 million a year ago.
Interest expenses of $363 million were 36.9% higher than the year-ago quarter.
Exelon was serving nearly 3.96 million electric customers in the third quarter, up 1.5% year over year.
As of Sep 30, 2016, Exelon's cash and cash equivalents were $1,897 million compared with $6,502 million at the end of 2015.
Long-term debt as of Sep 30, 2016 was $32,330 million, up from $23,645 million as of Dec 31, 2015.
In the first nine of 2016, net cash flow from operating activities was $7,359 million compared with $5,674 million in the year-ago period. During the same period, Exelon's capital expenditure was $6,368 million, compared with $5,443 million in 2015.
Hedges
Exelon's hedging program involves hedging of commodity risks for expected generation, typically on a ratable basis, over a three-year period. The proportion of expected generation hedged as of Sep 30, 2016, was 98–101% for 2016, 85–88% for 2017, and 54–57% for 2018.
Looking Ahead
Exelon raised its 2016 earnings guidance to the range to $2.55 to $2.75 per share from $2.40–$2.70 expected earlier.
Upcoming Peer Releases
Dominion Resources Inc. (D - Free Report) is expected to release third-quarter 2016 operating earnings on Oct 31. The Zacks Consensus Estimate is pegged at $1.08.
Duke Energy Corporation (DUK - Free Report) is expected to release third-quarter 2016 operating earnings on Nov 4. The Zacks Consensus Estimate is pegged at $1.55.
NextEra Energy, Inc. (NEE - Free Report) is expected to release third-quarter 2016 operating earnings on Oct 31. The Zacks Consensus Estimate is pegged at $1.65.
Our View
Exelon was able to surpass bottom-line expectations in the reported quarter thanks to solid performance of its operating segments. The company also benefitted from new electric rates and warmer-than-expected temperature in its service territories.
Exelon is also gaining on the back of the Pepco Holdings acquisition, which contributed $130 million to its earnings in the reported quarter. The company revised its earnings guidance for 2016 upward, in expectations of even higher from the Pepco and Generation segments.
In the first nine months of 2016, the company served nearly 3.96 million electric customers, up 1.5% year over year. Moreover, the company recorded a 2.3% increase in electric delivery volumes to 68,189 Gwh.
Courtesy of these positive developments, we believe that Exelon is poised to meet the raised earnings guidance for 2016.
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Exelon (EXC) Trumps Earnings and Revenue Estimates in Q3
Exelon Corporation (EXC - Free Report) reported third-quarter 2016 adjusted operating earnings of 91 cents per share, beating the Zacks Consensus Estimate of 74 cents by 23%. Quarterly earnings were also 9.6% higher than year-ago tally of 83 cents. Reported earnings were also above management’s guidance range of 65 to 75 cents per share.
The bottom-line improvement was driven by regulatory rate hikes and favorable weather, which boosted demand for utility services.
On a GAAP basis, quarterly earnings were 53 cents per share, compared with 69 cents a year ago. The difference between GAAP and adjusted operating earnings was due to the combined impact of hedging activities, impairment of assets, plant retirements, other one-time charges and a gain on fund investments combining to a net charge of 38 cents.
Total Revenue
Exelon's total operating revenues of $8,836 million surpassed the Zacks Consensus Estimate of $8,698 million by 1.6%. Quarterly revenues also increased 19.2% year over year.
Quarterly Highlights
Exelon's total operating expenses increased 19.6% year over year to $7,248 million. The increase in operating expenses was primarily due to higher purchased power and fuel expenses, and operating and maintenance expenses.
The company reported operating income of $1,589 million in the quarter, up 17.2% from $1,356 million a year ago.
Interest expenses of $363 million were 36.9% higher than the year-ago quarter.
Exelon was serving nearly 3.96 million electric customers in the third quarter, up 1.5% year over year.
EXELON CORP Price, Consensus and EPS Surprise
EXELON CORP Price, Consensus and EPS Surprise | EXELON CORP Quote
Financial Position
As of Sep 30, 2016, Exelon's cash and cash equivalents were $1,897 million compared with $6,502 million at the end of 2015.
Long-term debt as of Sep 30, 2016 was $32,330 million, up from $23,645 million as of Dec 31, 2015.
In the first nine of 2016, net cash flow from operating activities was $7,359 million compared with $5,674 million in the year-ago period. During the same period, Exelon's capital expenditure was $6,368 million, compared with $5,443 million in 2015.
Hedges
Exelon's hedging program involves hedging of commodity risks for expected generation, typically on a ratable basis, over a three-year period. The proportion of expected generation hedged as of Sep 30, 2016, was 98–101% for 2016, 85–88% for 2017, and 54–57% for 2018.
Looking Ahead
Exelon raised its 2016 earnings guidance to the range to $2.55 to $2.75 per share from $2.40–$2.70 expected earlier.
Upcoming Peer Releases
Dominion Resources Inc. (D - Free Report) is expected to release third-quarter 2016 operating earnings on Oct 31. The Zacks Consensus Estimate is pegged at $1.08.
Duke Energy Corporation (DUK - Free Report) is expected to release third-quarter 2016 operating earnings on Nov 4. The Zacks Consensus Estimate is pegged at $1.55.
NextEra Energy, Inc. (NEE - Free Report) is expected to release third-quarter 2016 operating earnings on Oct 31. The Zacks Consensus Estimate is pegged at $1.65.
Our View
Exelon was able to surpass bottom-line expectations in the reported quarter thanks to solid performance of its operating segments. The company also benefitted from new electric rates and warmer-than-expected temperature in its service territories.
Exelon is also gaining on the back of the Pepco Holdings acquisition, which contributed $130 million to its earnings in the reported quarter. The company revised its earnings guidance for 2016 upward, in expectations of even higher from the Pepco and Generation segments.
In the first nine months of 2016, the company served nearly 3.96 million electric customers, up 1.5% year over year. Moreover, the company recorded a 2.3% increase in electric delivery volumes to 68,189 Gwh.
Courtesy of these positive developments, we believe that Exelon is poised to meet the raised earnings guidance for 2016.
Exelon Corporation has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>