Consolidated Edison Inc.
) reported second-quarter 2012 results after the market close with
earnings from continuing operations of 61 cents per share,
surpassing the Zacks Consensus Estimate of 59 cents. However, the
quarter's results were above the year-ago figure of 57 cents per
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On a reported basis, the company reported GAAP earnings of 73 cents
per share compared with 57 cents per share in the year-ago quarter.
The variance of 12 cents between earnings from continuing
operations and GAAP earnings per share was primarily due to higher
mark-to-market gains in the Competitive Energy businesses.
The results reflect changes in the rate plans of utility
subsidiaries and the effects of the milder winter weather on steam
Consolidated Edison reported operating revenue of $2.8 billion,
down from approximately $3 billion year over year and $348 million
lower than the Zacks Consensus Estimate. Of the total revenue,
Electric revenues contributed $2.1 billion, down from $2.15 billion
in the year-ago quarter. However, Gas revenues fell $33 million to
$300 million; Steam revenues declined $24 million to $83 million;
and Non-utility revenues plunged $102 million to $298 million.
Total operating expenses in the quarter were $2.3 billion, down
11.5% year over year. Purchased power and fuel expenses in the
quarter were $775 million, down 28.8% year over year. However,
operations and maintenance expenses were $790 million, up 7.9% year
over year due to pension costs and the support and maintenance of
the company's underground facilities to accommodate municipal
Consolidated Edison's earnings from ongoing operations were $178
million compared with $166 million in the year-ago quarter. The
company's net income was $214 million compared with $165 million in
the year-ago quarter.
Cash and temporary cash investments at the end of June 30, 2012
were $1.4 billion, up from $492 million as of June 30, 2011.
Long-term debt as of June 30, 2012 was $9,840 million compared with
$10.7 billion at the end of June 30, 2011.
At the peer
) reported adjusted earnings of 32 cents per share for the second
quarter of 2012, missing both the Zacks Consensus Estimate of 33
cents and the year-ago quarterly earnings of 56 cents per share.
The steep decline in earnings was primarily due to losses at the
Midwest Generation unit and a delay in the 2012 rate case decision
regarding regulatory support for investment made by the utility's
subsidiary Southern California Edison.
Consolidated Edison expects its earnings per share from ongoing
operations for full-year 2012 in the range of $3.65 - $3.85.
Consolidated Edison's earnings surpassed our expectation this
quarter. Going forward, the company continues to make
infrastructure investments that will add to profitability along
with providing safe and reliable energy service to its customers.
In the long run, we believe that the company's robust portfolio of
regulated utility assets will provide a steady earnings base and
significant growth prospects in the long run.
However, we are concerned about the expected lower demand for
electricity, earnings dilutive issuances and regulatory risks. The
company presently retains a short-term Zacks #3 Rank (Hold) that
corresponds with our long-term Neutral recommendation on the stock.
New York City-based Consolidated Edison Inc. is a diversified
utility holding company with subsidiaries engaged in both regulated
and unregulated businesses. ConEd's regulated businesses operate
through two subsidiaries - Consolidated Edison Company of New York
(CECONY) and Orange and Rockland Utilities (O&R).