) released its fourth quarter results with earnings per share of
64 cents, falling short of the Zacks Consensus Estimate by a
penny. Earnings were also lower than the year-ago figure of 82
cents by 21.9%
The decline in quarterly earnings was mainly due to lower energy
margins at the Generation segment, higher operating and
maintenance expense, increase in average diluted common shares as
a result of the merger and higher depreciation & amortization
GAAP earnings during the fourth quarter were 44 cents per share
versus 91 cents reported in the year-ago quarter. The difference
between GAAP and operating earnings was due to charges of 5 cents
related to divestiture, 5 cents for merger integration, 24 cents
for amortization of commodity contract intangibles and 1 cent for
Midwest bankruptcy charges. The one-time gains included 14 cents
from hedging activities and 1 cent from asset retirement.
2012 operating earnings were $2.85 per share, substantially
lower than the year-ago figure of $4.16 per share and also short
of the Zacks Consensus Estimate by 2 cents. GAAP earnings for
2012 were $1.42 per share versus $3.75 reported in the year-ago
Exelon's total operating revenue for fourth-quarter 2012 was
$6.44 billion, reflecting year-over-year growth of 48.4%.
Reported quarter revenue missed the Zacks Consensus Estimate of
2012 revenue of the company was $24.7 billion, up 29.9% from
$18.99 billion reported in 2011. However, the results lagged the
Zacks Consensus Estimate by 4.8%.
Highlights of the Release
During the quarter the company generated 34,882 gigawatt-hours
(GWh) of electricity more or less in line with 34,893 GWh
generated in fourth quarter 2011.
The company has put more emphasis on renewable sources for the
generation of electricity and is gradually idling its fossil fuel
based units. In Dec 2012 the company decided to construct four
wind based units having a combined generation capacity of 273
megawatts (MW). In the same month Exelon decided to sell its
three Maryland fossil fuel power plants, having a generation
capacity of 2,648 MW, to Raven Power Holdings LLC.
Total operating expenses in the fourth quarter increased
sharply by 66.1% to $5.5 billion from $3.3 billion a year ago.
The increase was largely due to an 87.8% increase in purchase
power and fuel, and 47.1% increase in operating and maintenance
The rise in operating expenses during the reported quarter
impacted the operating income of the company. Operating income in
the reported quarter declined 5.3% year over year to $974
Fourth Quarter Segment Update
: Operating revenue increased 55.4% year over year to $3.92
billion from $2.52 billion a year ago. Net income dropped 26.8%
year over year to $283 million.
Exelon Generation achieved a nuclear capacity factor of 93.0%
in the fourth quarter of 2012, in line with the year-ago quarter.
Generation's average realized margin on all electric sales,
including sales to affiliates and excluding trading activity, was
$26.52 per megawatt/hour (MWh) in the quarter, compared with
$39.31 per MWh in the prior-year quarter.
Commonwealth Edison Company (ComEd)
: Operating revenue decreased 5.4% year over year to $1.29
billion. Net income increased 33.9% to $161 million.
In the quarter, heating degree-days in the ComEd service
territory were up 10.8% versus the same period in 2011, but it
was 11.5% below normal. Total retail electric deliveries
increased 0.4% sequentially.
PECO Energy Company (PECO)
: Operating revenue increased 1.5% year over year to $790
million. Net income increased 9.5% to $81 million.
During the reported quarter, heating degree-days in the PECO
service territory were up 13.8% from the same period in 2011 and
were 9.0% below normal. On the retail gas side, deliveries in the
fourth quarter of 2012 were up 12.4% from the year-ago
BaltimoreGas and Electric (BGE)
: Operating revenue totaled $703 million in the fourth quarter
and a net income clocked $18 million.
: Net income from the "Other" category was $3 million. Others
includes eliminating and consolidating adjustments, Exelon's
corporate operations, shared service entities and other financing
and investment activities.
Cash and cash equivalents as of Dec 31, 2012 were $1,486
million versus $1,016 million at the end of 2011.
Long-term debt as of Dec 31, 2012 totaled $18.34 billion
versus $12.2 billion at year-end 2011.
Cash from operating activities in 2012 was $6,132 million
versus $4,853 million in the comparable period last year.
Capital expenditure in 2012 increased to $5,789 million from
$4,042 million in the comparable year-ago period.
Exelon expects its first quarter 2013 earnings in the range of
60 cents to 70 cents. Exelon Corporation expects its 2013
earnings in the range of $2.35 to $2.65 per share. The guidance
assumes normal weather conditions in 2013.
Exelon expects to generate 218,000 GWh of power assuming that
its nuclear plants will achieve an average capacity factor of
93.5% in 2013.
The company expects cash from operations in 2013 to be nearly
$6 billion and also forecasts the issue of new debts of $0.85
billion during 2013. It hopes to retire $1.4 billion of debt
during the year.
Exelon's hedging program involves the 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 Dec 31, 2012, is 94% - 97% for 2013, 62% - 65% for 2014,
and 27% - 30% for 2015.
Pike Electric Corporation
) reported earnings of 67 cents per share in the second quarter
of fiscal 2013, surpassing the Zacks Consensus Estimate of 25
The company missed our projection primarily due to higher
operating expenses. The sluggish pace of economic recovery in the
U.S. continues to impact the long-term plans of Exelon. We
nevertheless appreciate the initiatives undertaken by Exelon to
enhance its renewable generation fleet.
Exelon Corporation currently retains a Zacks Rank #3 (Hold).
We prefer electric utilities
). Both these companies carry a Zacks Rank #1 and are yet to
announce their fourth quarter results.
Based in Chicago, Illinois, Exelon Corporation, a utility
services holding company, engages in the generation,
transmission, distribution and sale of electricity to
residential, commercial, industrial and wholesale customers. With
a market capitalization of $26.47 billion, the company has 19,267
full time employees.
AMEREN CORP (AEE): Free Stock Analysis Report
EXELON CORP (EXC): Free Stock Analysis Report
PIKE ELECTRIC (PIKE): Free Stock Analysis
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