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Exelon (EXC) Down 2.1% Since Earnings Report: Can It Rebound?

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About a month has gone by since the last earnings report for Exelon Corporation (EXC - Free Report) . Shares have lost about 2.1% in that time frame, underperforming the market.

Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? 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 Earnings and Revenues Surpass Estimates in Q2

Exelon Corporation’s second-quarter 2017 adjusted operating earnings of 54 cents per share beat the Zacks Consensus Estimate of 52 cents by 3.8%. However, the quarterly earnings were 16.9% lower than the year-ago figure of 65 cents.

The year-over-year decline in earnings was due to increased nuclear outage days and lower realized energy prices.

On a GAAP basis, quarterly earnings were 9 cents per share, compared with 29 cents in the year-ago quarter.

The difference between GAAP and adjusted operating earnings was due to the combined impact of plant divestment, hedging activities, assets impairments and a few one-time items, resulting in a net loss of 45 cents.

Total Revenue

Exelon's operating revenues of $7,623 million surpassed the Zacks Consensus Estimate of $7,514 million by 1.4%.

Quarterly revenues also increased 10.3% year over year from $6,910 million reported in the year-ago quarter.

Quarterly Highlights

Exelon’s two new combined-cycle gas turbines totaling nearly 2,200 MWs in Texas went into service on time and on budget during the second quarter.

Exelon's total operating expenses increased 17.5% year over year to $7,392 million. The increase was primarily due to higher purchasing power and fuel expenses, and operating and maintenance expenses.

Interest expenses of $436 million were 15.9% higher than the year-ago quarter.

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 Jun 30, 2017, was 96–99% for 2017, 71–74% for 2018, and 39–42% for 2019.

Guidance

Exelon reiterated its 2017 earnings guidance per share of $2.50-$2.80.

How Have Estimates Been Moving Since Then?

Following the release, investors have witnessed a downward trend for fresh estimates. There hasbeen one revision lower for the current quarter.

Exelon Corporation Price and Consensus

 

Exelon Corporation Price and Consensus | Exelon Corporation Quote

VGM Scores

At this time, Exelon's stock has a subpar Growth Score of D, however its Momentum is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. 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 momentum 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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