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Why Is Exelon (EXC) Down 3.4% Since Last Earnings Report?

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A month has gone by since the last earnings report for Exelon (EXC - Free Report) . Shares have lost about 3.4% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Exelon 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 catalysts.

Exelon's Q1 Earnings In Line, Revenues Beat Estimates

Exelon Corporation’s first-quarter 2019 operating earnings of 87 cents per share were on par with the Zacks Consensus Estimate. However, the reported earnings were 9.4% lower than the year-ago figure of 96 cents.
 
The year-over-year decline in earnings was primarily due to lower realized energy prices.

On a GAAP basis, its quarterly earnings were 93 cents per share compared with 60 cents in the year-ago quarter.

Total Revenues

Exelon's total revenues of $9,477 million surpassed the Zacks Consensus Estimate of $9,395 million by 0.9%. However, the top line declined 2.3% from the year-ago quarter. The year-over-year decline in revenues was due lower contribution from Generation and ComEd businesses.

Highlights of the Release

Exelon's total operating expenses decreased 4.5% year over year to $8,262 million. The decline in total expenses was due to lower power and fuel costs, as well as operating and maintenance expenses.

Interest expenses were $403 million, up 8.6% from $371 million in the year-ago quarter.

In the reported quarter, the company efficiently serviced more electric and natural gas customers than the year-ago period.

Hedges

Exelon's hedging program involves safeguarding of commodity risks for expected generation, typically on a ratable basis, over a three-year period. The proportion of expected generation hedged as of Mar 31, 2019 was 90-93% for 2019, 64-67% for 2020 and 38-41% for 2021.

Financial Highlights

Cash and cash equivalents were $880 million as of Mar 31, 2019 compared with $1,349 million on Dec 31, 2018.

Long-term debt was $32,960 million as of Mar 31, 2019 compared with $34,075 million on Dec 31, 2018.

Cash from operating activities in the first quarter was $1,044 million compared with $1,052 million in the year-ago period.
 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -6.91% due to these changes.

VGM Scores

Currently, Exelon has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, 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.

Outlook

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.


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