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Exelon Corporation Likely to Miss

by Zacks Equity Research

February 04, 2013 | Comments : 0 Recommended this article: (0)

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Exelon Corporation ( EXC - Analyst Report ) will release its fourth quarter 2012 financial results before the market opens on Feb 7, 2013. In the prior quarter, this electric utility reported an earnings surprise of 6.94%. Exelon Corporation currently has a Zacks Rank #3 (Hold). Let’s see how things are shaping up at Exelon prior to this announcement.

Factors to Consider This Quarter

As in the preceding quarter, the accretive benefits from the merger with Constellation are expected to boost results.

However, the sluggish pace of economic recovery in the U.S. has forced Exelon to reschedule its long-term capex plans. The slackness in demand has led Exelon to delay the completion of three projects.

Like other utilities based in the East Coast, the aftermath of Hurricane Sandy will impact the results of the company in the fourth quarter of 2012.

Earnings Whispers

Our proven model does not conclusively show that Exelon Corporation is likely to beat earnings this quarter. This is because a stock needs to have both a positive earnings Expected Surprise Prediction (ESP) (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank of #1, 2 or 3 for this to happen. This is not the case here.

Negative Zacks ESP: This is because the Most Accurate estimate stands at 63 cents while the Zacks Consensus Estimate is higher at 65 cents. That is a difference of -3.08%.

Zacks Rank #3 (Hold): Exelon’s Zacks Rank #3 enhances the possibility of an earnings surprise. However the negative ESP complicates the forecasting power making surprise prediction difficult.

We caution investors against the stock going into the earnings announcement, as a Zacks earnings ESP of -3.08% lowers the possibility of an earnings surprise.

Other Stocks to Consider

Other companies you may want to consider on the basis of our model which shows that they have the right combination of elements to post an earnings beat this quarter are as follows:

TECO Energy Inc. ( TE - Analyst Report ) has earnings ESP of +14.29% and Zacks Rank #3 (Hold).

Otter Tail Corporation ( OTTR - Snapshot Report ) has earnings ESP of +6.67% and Zacks Rank #3 (Hold).

PPL Corporation ( PPL - Analyst Report ) has earnings ESP of +6.52% and Zacks Rank #3 (Hold).

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