According to analysts’ estimates, Exelon (EXC) is expected to report earnings of $0.45 per share in 4Q16. In 4Q15, it posted earnings of $0.38 per share.
Exelon’s earnings in 4Q16 are expected to be driven by its regulated operations, customer additions, and rate cases. Its competitive operations will likely remain under pressure due to lower wholesale power prices.
Exelon is concentrating on regulated business, considering grounded wholesale power prices and persistent weakness in the capacity business. Its capital spending plan for the next five years also seems to foster regulated operations. Regulated operations generally bring relatively stable earnings.
Exelon’s management gave earnings guidance of $2.40–$2.70 per share for fiscal 2016. In 2015, its adjusted earnings were $2.49 per share. Exelon’s regulated utilities are expected to be growth drivers for the company. Its EPS is expected to grow 7%–9% annually.
Moody’s on the US unregulated power segment
According to Moody’s recent report, its outlook on the US unregulated power and utilities industry (EXC) (FE) (PEG) is negative. Low natural gas prices will likely continue to pressure wholesale power prices for the next 12–18 months. It stated that coal and nuclear power plants in the US can’t compete with natural gas plants. Moody’s also expects peak demand load growth to remain weak due to the slowing economy and dominance of energy efficiency programs.