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Consolidated Edison (ED) Up 2.7% Since Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Consolidated Edison Inc. (ED - Free Report) . Shares have added about 2.7% in that time frame, outperforming the market.

Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Consolidated Edison Tops Q4 Earnings, Gives 2017 View

Consolidated Edison posted fourth-quarter 2016 adjusted earnings of $0.69 per share, beating the Zacks Consensus Estimate of $0.67 by 3%. Reported earnings were also up 13.1% from the year-ago figure of $0.61.

Full-year earnings came in at $3.99 per share, beating the Zacks Consensus Estimate of $3.96 by 0.8%. However, 2016 earnings were lower than the year-ago adjusted number of $4.08 by 2.2%.

Total Revenue

Consolidated Edison reported total revenue of $2,707 million in the fourth quarter, which fell short of the Zacks Consensus Estimate of $3,163 million by 14.4%. Revenues were however in line with the year-ago level.

Electric revenues came in at $2,024 million in the reported quarter, up 6.8% from the prior-year figure of $1,895 million. Gas revenues increased 7.2% to $446 million. Steam revenues improved 45% to $145 million, while non-utility revenues amounted to $92 million, down 68.9% from $296 million a year ago.

Full-year revenues came in at $12.07 billion, lagging the Zacks Consensus Estimate of $12.21 billion by 1.1%. Reported revenues also fell 3.8% from the year-ago figure of $12.55 billion.

Operating Statistics

Total operating expenses in the quarter decreased 3.4% to $2,229 million due to lower purchase power and other operations and maintenance expenses.

While gas purchased for resale, depreciation and amortization, fuel and taxes other than income taxes increased a respective 100%, 7.2%, 21.9% and 6.3%, purchase power and other operations and maintenance expenses decreased 31.2% and 4.4%, respectively.

Financials

Cash and cash equivalents as of Dec 31, 2016 were $776 million, compared with $944 million as of Dec 31, 2015.

Long-term debt was $14,735 million as of Dec 31, 2016, up from $12,006 million at 2015 end.

In 2016, cash from operating activities was $3,459 million, compared with $3,277 million in the year-ago period.

Guidance

For 2017, the company expects its earnings to be in the range of $3.95 to $4.15.

How Have Estimates Been Moving Since Then?

Following the release, investors have witnessed a downward trend in fresh estimates. There has been one downward revision for the current quarter.

VGM Scores

At this time, Consolidated Edison's stock has an average Growth Score of 'C', though it is lagging a bit on the momentum front with a 'D'. However, the stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate that the stock is more suitable for value investors than growth investors.

Outlook

Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.


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