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Exelon Beats Earnings Estimates, Raises Guidance

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Exelon beats estimates

Exelon Corporation (EXC) reported its third quarter earnings on October 26, 2016. It reported earnings of $0.91 per share for the quarter—compared to earnings of $0.83 per share in the same quarter last year.

Driven by strong growth in the reported quarter, Exelon raised its fiscal 2016 earnings guidance from $2.40–$2.70 per share to $2.55–$2.75 per share.

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Earnings highlights

Exelon’s operating revenues in 3Q16 were $8.8 billion—nearly 20% higher from 3Q15. Its sales were impacted positively by the favorable weather during the quarter. Another factor helped Exelon’s earnings—higher utility earnings driven by regulatory rate increases. In 3Q16, Exelon’s territories witnessed an 8.6% rise in the cooling degree days compared to 3Q15. It triggered a rise in total retail electric deliveries by 5.1% compared to 3Q15. Natural gas deliveries for both the retail and transportation segments fell 2.6% compared to the same period in 2015. Exelon served nearly 4 million electric customers in 3Q16—1.5% higher than 3Q15.

Adjusted earnings of Exelon Generation, Exelon’s power generation segment, fell nearly 25% to $376 million in 3Q16 compared to 3Q15 due to decreasing capacity prices, increased income taxes, and increased nuclear decommissioning amortization expenses. Pepco Holdings reported adjusted earnings of $130 million in 3Q16.

Hybrid utilities have fairly large exposure to competitive operations compared to regulated utilities. Their performance has been under severe pressure in the last few quarters due to weak wholesale power prices triggered by low gas prices.

Exelon’s peers such as FirstEnergy (FE) and Public Service Enterprise (PEG) will report their third quarter earnings on November 3 and October 31, 2016, respectively.

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