A month has gone by since the last earnings report for Exelon (EXC). Shares have added about 15.2% 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 the most recent earnings report in order to get a better handle on the important drivers.
Exelon Q1 Earnings Surpass Estimates, Revenues Miss
Exelon Corporation’s first-quarter 2020 operating earnings of 87 cents per share surpassed the Zacks Consensus Estimate of 85 cents by 2.4%. The reported earnings were on par with the year-ago figure. In the reported quarter, the impact of unfavorable weather was offset by rate increases in some of its service areas.
On a GAAP basis, quarterly earnings were 60 cents per share compared with 93 cents in the year-ago quarter.
Exelon's total revenues of $8,747 million lagged the Zacks Consensus Estimate of $9,318 million by 6.1%. The top line also declined 7.7% from the year-ago figure of $9,477 million.
Highlights of the Release
Exelon's total operating expenses decreased 8.8% year over year to $7,529 million. The decline in total expenses was due to lower purchased power and fuel costs.
Interest expenses were $410 million, up 1.7% from $403 million in the year-ago quarter.
The company efficiently served 0.8% and 1% more electric and natural gas customers, respectively, than first-quarter 2019 levels. Exelon Generations’ nuclear fleet capacity factor was 93.9% in the quarter compared with 97.1% in the year-ago period. The decline was due to planned refueling outages in first-quarter 2020.
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 Mar 31, 2020 was 89-92% for 2020 and 70-73% for 2021.
Cash and cash equivalents were $1,457 million as of Mar 31, 2020 compared with $587 million on Dec 31, 2019.
Long-term debt was $34,808 million as of Mar 31, 2020 compared with $$31,329 million on Dec 31, 2019.
Cash from operating activities in first-quarter 2020 was $1,080 million compared with $1,044 million in the first quarter of 2019.
Exelon lowered its 2020 earnings guidance to the range of $2.80-$3.10 from the prior expectation of $3.00-$3.30 per share. The midpoint of the above guided range is $2.95, lower than the current Zacks Consensus Estimate for the period of $3.00. Exelon identified $250 million in cost savings across its operating companies to partly offset the expected unfavorable impacts on operating revenues in the latter part of the year.
The company remains committed to invest $26 billion in the 2020-2023 time period to strengthen existing operations.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -7.5% due to these changes.
Currently, Exelon has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% 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.
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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