A month has gone by since the last earnings report for Exelon Corporation EXC. Shares have added about 7.9% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let’s take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Exelon Earnings, Revenues Beat Estimates in Q1
Exelon’s first-quarter 2017 adjusted operating earnings of $0.65 per share beat the Zacks Consensus Estimate of $0.61 by 6.5%. However, the quarterly earnings were 4.4% lower than the year-ago figure of $0.68.
The year-over-year improvement in earnings was due to regulatory rate increase and solid performance of the company.
On a GAAP basis, quarterly earnings were $1.09 per share, compared with $0.19 a year ago.
The difference between GAAP and adjusted operating earnings was due to the combined impact of hedging activities, bargain purchase gain, merger commitments, gain from Decommissioning Trust (NDT) Fund Investments and a few one-time charges, resulting in a net gain of $0.42.
Total Revenue
Exelon’s total operating revenue of $8,715 million surpassed the Zacks Consensus Estimate of $8,478 million by 2.8%.
Quarterly revenues also increased 16.5% year over year from $7,482 million reported in the year-ago quarter.
Quarterly Highlights
Exelon’s total operating expenses increased 18.4% year over year to $7,548 million. The increase was primarily due to higher purchasing power and fuel expenses, and operating and maintenance expenses.
The company reported operating income of $1,171 million in the quarter, up 5.1% from $1,114 million a year ago.
Interest expenses of $377 million were 31.3% higher than the year-ago quarter.
During the quarter, the company issued two series of senior notes worth $750 million in aggregate. The proceeds from the sale of the senior notes were used to repay outstanding commercial paper obligations and for general corporate purposes.
Hedges
Exelon’s hedging program involves hedging of commodity risks for expected generation, typically on a ratable basis, over a three-year period. The proportion of expected generation hedged as of Mar 31, 2017, was 97–100% for 2017, 60–63% for 2018, and 30–33% for 2019.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions. In the past month, the consensus estimate has shifted lower by 17.4%.
Exelon Corporation Price and Consensus
VGM Scores
At this time, Exelon’s stock has a subpar Growth Score of ‘D’. However, its Momentum is doing a bit better with a ‘C’. The stock was allocated a grade of ‘A’ on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of ‘B’. If you aren’t focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than momentum investors.
Outlook
Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.
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Zacks Investment Research
June 06, 2017 at 04:15PM
from Zacks Equity Research
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