By Sarfaraz A. Khan and Gohar Yousuf
About two weeks ago, one of the leading American nuclear
power producer and one of the largest suppliers of wholesale electric power, Exelon
Corp (EXC),
released its quarterly
results in which its profit significantly increased due to lower expenses and a
positive impact from hedging activities. Excluding the one-off items, the
company still managed to beat market’s consensus estimates. However, despite
the better than expected performance, the business environment looks very
challenging while its shares will likely remain under pressure due to pessimist
sentiments expressed in the analysts’ ratings (discussed later). Therefore, I
believe that investors are better off staying on the sidelines for the moment.
Quarterly Results
The company’s adjusted earnings rose 1.4% to $667 million, or $0.78 per share, from $658 million, or $0.77 per share, from the same quarter last year. The earnings were considerably above the market’s expectations of $0.66 per share. Similarly, while revenues dropped by 1.2% to $6.50 billion, but Exelon still delivered better results than market’s consensus estimate of $6.20 billion.
The fall in revenue growth can be attributed to lower sales from PECO Energy Company and Commonwealth Edison Company (ComEd), although to some extent, better performance from Baltimore Gas and Electric (BGE) and Generation did offset some of the revenue drop.
Quarterly Results
The company’s adjusted earnings rose 1.4% to $667 million, or $0.78 per share, from $658 million, or $0.77 per share, from the same quarter last year. The earnings were considerably above the market’s expectations of $0.66 per share. Similarly, while revenues dropped by 1.2% to $6.50 billion, but Exelon still delivered better results than market’s consensus estimate of $6.20 billion.
The fall in revenue growth can be attributed to lower sales from PECO Energy Company and Commonwealth Edison Company (ComEd), although to some extent, better performance from Baltimore Gas and Electric (BGE) and Generation did offset some of the revenue drop.
SEGMENTS
|
Qtrly Revs. 2012
|
Qtrly Revs. 2013
|
Change
|
Generation
|
$4,031M
|
$4,255M
|
+5.6%
|
ComEd
|
$1,484M
|
$1,156M
|
-22.1%
|
PECO
|
$806M
|
$728M
|
-9.7%
|
BGE
|
$720M
|
$737M
|
+2.4%
|
On the bright side, Exelon’s purchase power and fuel expenses fell by 9.4%, while 20% decline was witnessed in operating and maintenance costs. Consequently, this drop ….read full article at GuruFocus
