It has been about a month since the last earnings report for Exelon (
EXC Quick Quote EXC - Free Report) . Shares have added about 5.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Exelon due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Exelon's Q2 Earnings and Revenues Surpass Estimates Exelon Corporation’s second-quarter 2021 earnings of 89 cents per share beat the Zacks Consensus Estimate of 70 cents by 27.1%. In the year-ago quarter, the company reported earnings of 55 cents per share. The year-over-year improvement in earnings was primarily due to higher earnings, and contribution from its ComEd and Generation units. On a GAAP basis, quarterly earnings were 41 cents per share compared with 53 cents in the year-ago quarter. Total Revenues
Exelon's total revenues of $7,915 million surpassed the Zacks Consensus Estimate of $7,757 million by 2.1%. The top line also improved 8.1% from the year-ago figure of $7,322 million.
Highlights of the Release
Exelon utilities announced a "path to clean" goal to collectively reduce operations-driven emissions by 50% within 2030 from a 2015 baseline and reach net-zero operations-driven emissions by 2050.
Exelon's total operating expenses increased nearly 11.7% year over year to $7,561 million. Interest expenses were $396 million, down 7.3% from the year-ago quarter. Exelon-operated nuclear plants at ownership achieved a 93.7% capacity factor for the quarter compared with 95.4% in second-quarter 2020. Planned Separation
On Feb 25, 2021, Exelon announced that its board of directors approved a plan to separate the utilities business, comprising the company’s six regulated electric and gas utilities, and Exelon Generation, its competitive power generation and customer-facing energy businesses. This will create two publicly-traded companies with the necessary resources to best serve customers, and help it sustain long-term investment as well as operating excellence.
The company has already filed for necessary approvals and is expecting the completion of this separation, subject to necessary approvals, in first-quarter 2022. Hedges
Exelon's hedging program involves safeguarding of commodity risks for expected generation. As of Jun 30, 2021, the proportion of expected generation hedged is 98-101% for 2021.
Cash and cash equivalents were $1,578 million as of Jun 30, 2021 compared with $663 million on Dec 31, 2020.
Long-term debt was $35,077 million as of Jun 30, 2021 compared with $35,093 million on Dec 31, 2020. Cash provided from operating activities for first-half 2021 was $1,138 million compared with $2,680 million in the first half of 2020. Guidance
Exelon reaffirmed its 2021 earnings guidance in the range of $2.60-$3.00 per share. The midpoint of the above guided range is $2.80, higher than the Zacks Consensus Estimate of $2.78 per share for the period.
The company plans to invest $6.6 billion in 2021 to strengthen operations. How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -9.75% due to these changes.
Currently, Exelon has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile 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.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Exelon has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.