EBITDA margin on the rise
Exelon Corporation’s (EXC) EBITDA (earnings before income taxes, depreciation, and amortization) margin for 3Q 2014 was 33.7%. This is the highest EBITDA margin that Exelon has achieved in 11 quarters. Exelon’s EBITDA for the third quarter was $2.3 billion based on revenues of $6.9 billion.
EBITDA margins reflect the business’ profitability. A higher EBITDA margin implies higher profit margins, while a lower EBITDA margin indicates lower profit margins.
Acquiring utilities healthy for EBITDA margin
In the last two years, Exelon has looked to strengthen its utility division via acquisitions. For example, in 2012, Exelon merged with Constellation, adding 1.2 million utility customers. As the synergies of the merger are realized, EBITDA margins are getting healthier.
This year, Exelon announced two more large-sized deals adding more utility business to its portfolio. It plans to acquire Pepco Holdings, Inc. (POM) and the retail utility arm of Integrys Energy Group, Inc. (TEG). These acquisitions will strengthen Exelon’s utility division.