Pepco’s Organic Growth Boosted Its Revenue in 3Q15



Pepco’s price movement

Pepco Holdings (POM) has a market capitalization of $6.7 billion. Pepco’s YTD (year-to-date) price movement has been stable with some downs in 2015.

After its 3Q15 earnings report, Pepco fell by 0.45% to close at $26.27 per share as of October 26, 2015. Its price movements on a weekly, monthly, and YTD basis are -0.61%, 10.8%, and 0.70%, respectively.

Technically, Pepco has broken support of its 20-day, 50-day, and 200-day moving averages throughout 2015. Currently, it’s trading at 1.6% above its 20-day moving average, 6.4% above its 50-day moving average, and 1.5% above its 200-day moving average.

The Guggenheim S&P Equal Weight Utilities ETF (RYU) invests 2.6% of its holdings in Pepco. The ETF tracks an equal-weighted index of S&P 500 utilities companies. The ETF’s YTD price movement was -2.3% as of October 23, 2015.

Competitors of Pepco Holdings and their market capitalizations are as follows:

  • American Electric Power (AEP) — $28.4 billion
  • FirstEnergy (FE) — $13.2 billion
  • Ameren (AEE) — $10.8 billion
  • Avista (AVA) — $2.1 billion
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Pepco’s Performance in 3Q15

Pepco reported net revenue of $1,362 million in 3Q15, a rise of 3.7% when compared to its net revenue of $1,313 million in 3Q14. The company’s operating expenses as a percentage of operating revenue fell by 1.1% in 3Q15 compared to 3Q14. Its revenues from regulated T&D (transmission and distribution) electric and default electricity supply rose by 3.4% and 8.6%, respectively.

Its revenue from regulated gas fell by 11.8% in 3Q15 compared to 3Q14. Its net income and EPS (earnings per share) rose to $91 million and $0.36 per share in 3Q15, increases of 15.2% and 16.1%, respectively, compared to net income and EPS in 3Q14.

Its cash and cash equivalents rose to $271 million, and its inventories fell to $142 million in 3Q15 compared to cash and cash equivalents and inventories of $34 million and $150 million, respectively, in 2Q15.

The company’s current ratio and debt-to-equity ratio rose to 0.66 and 2.8 in 3Q15, increases of 4.8% and 2.6%, respectively, on a quarterly basis.

On July 24, 2015, the company declared a quarterly dividend of $0.27 per share on its common stock.

About Pepco

Pepco is an energy delivery company. Its subsidiaries include Pepco, Delmarva Power, and Atlantic City Electric. It provides regulated electricity services, natural gas services, energy savings performance contracting services, underground T&D construction services, and maintenance services.


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