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Con Edison Earnings Barely Misses, View Kept

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Consolidated Edison Inc. (ED - Free Report) posted first quarter 2013 earnings from ongoing operations of $1.08 per share, missing the Zacks Consensus Estimate by a penny. However, the quarterly result surged 6.9% from the year-ago profit of $1.01.

The year-over-year improvement largely reflects changes in the rate plans of the company’s utility subsidiaries. Again, the effects of normal winter weather as against the milder winter in the year-earlier quarter also contributed to earnings growth.

On a reported basis, the company registered earnings of 66 cents per share compared with 95 cents in the year-ago quarter.

Operational Results

Consolidated Edison reported quarterly operating revenue of $3,184.0 million, an increase of 3.4% from the year-ago quarter. However, the top line failed to match our expectation of $3,197.0 million by 0.4%.

Of the total quarterly revenue, Electric revenues rose 5.2% to $1,958.0 million, Gas revenues climbed 15.0% to $742.0 million and Steam revenues jumped 26.2% to $332.0 million, while Non-utility revenues nosedived almost 51% to $152.0 million during the reported quarter.

Con Edison's utility subsidiaries, Consolidated Edison Company of New York, Inc. (CECONY) and Orange and Rockland Utilities, Inc. (O&R), in the first quarter of 2013, incurred response and restoration costs for Superstorm Sandy of $431.0 million and $90.0 million, respectively (including capital expenditures of $113.0 million and $15.0 million, respectively).


Consolidated Edison reaffirmed its earnings from ongoing operations for 2013 in the range of $3.65 to $3.85 per share.

At the Peers

Utilities have in general performed well in the first quarter. Public Service Enterprise Group Inc.’s (PEG - Free Report) first quarter 2013 earnings came above the Zacks Consensus Estimate by 14.9%. This was mainly attributable to increased investment at PSE&G and solid performance from PSEG Power segments.

Xcel Energy Inc. (XEL - Free Report) recorded operating earnings in the first quarter 2013 of 52 cents per share, up 26.8% from the year-ago quarter. Earnings also beat the Zacks Consensus Estimate by 20.9%. Earnings outperformed on the back of higher electric and gas margins owing to a severe winter, lower interest expense and constructive rate cases in Colorado, South Dakota and Wisconsin.

Again, Mich. based CMS Energy Corporation (CMS - Free Report) posted first-quarter 2013 earnings per share of 53 cents on both adjusted and GAAP basis, beating the Zacks Consensus Estimate of 46 cents. Earnings were 43.2% higher than 37 cents earned in the year-ago quarter. A colder-than-normal weather spiked natural gas deliveries, driving better-than-expected results in the reported quarter.

Zacks Rank

Consolidated Edison currently retains a Zacks Rank #3 (Hold). Public Service, Xcel Energy and CMS Energy carry a Zacks Rank #2 (Buy) and are worth buying now.

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