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Why Is Exelon (EXC) Up 1.4% Since Last Earnings Report?

A month has gone by since the las t earnings report for Exelon (EXC). Shares have added about 1.4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Exelon due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recen t earnings report in order to get a better handle on the important catalysts.

Exelon Posts In-Line Q4 Earnings, Beats on Revenues

Exelon Corporation's fourth-quarter 2018 operating earnings of 58 cents per share were on par with the Zacks Consensus Estimate. The reported earnings were 3.6% higher than the year-ago figure of 56 cents.

The company's year-over-year improvement in the bottom line was due higher utility earnings from ComEd and regulatory rate increases at PHI.

On a GAAP basis, its quarterly earnings were 16 cents per share compared with $1.94 in the year-ago quarter.

Total Revenues

Exelon's total revenues of $8,814 million surpassed the Zacks Consensus Estimate of $7,222 million by 22.1%. Revenues also improved 5.4% from year-ago quarter. The improvement in revenues was due strong performance from Utility and Generation businesses.

Highlights of the Release

Exelon's total operating expenses increased 10.9% year over year to $8,107 million. The increase in expenses was due to higher power and fuel costs in the reported quarter.

Interest expenses were $416 million, up 13.9% from $365 million in the year-ago quarter.

Total electric customers served by the company at the end of 2018 increased 0.93% from the corresponding period of 2017. Exelon Utilities have a planned capital expenditure of $23 billion over the next four years, which will help it to strengthen its infrastructure and serve the expanding customer base more efficiently.

Hedges

Exelon's hedging program involves safeguarding 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, 2018 was 89-92% for 2019 and 56-59% for 2020.

Financial Highlights

Cash and cash equivalents were $1,349 million as of Dec 31, 2018, up 50.2% from the Dec 31, 2017 level.

Long-term debt was $34,075 million as of Dec 31, 2018, higher than $32,176 million in the corresponding period of 2017.

In 2018, the company made capital investments of $7,594 million, marginally up from $7,584 million invested in the year-ago period.

Guidance

Exelon initiated its 2019 earnings per share guidance. Earnings are expected in the range of $3-$3.30 per share, whose mid-point of $3.15 is in line with the current Zacks Consensus Estimate for 2019 of $3.15.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -10.23% due to these changes.

VGM Scores

Currently, Exelon has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Exelon has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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