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Exelon (EXC) Q4 Earnings: Can the Stock Pull a Surprise?

Zacks Equity Research

Exelon Corporation EXC will release fourth-quarter 2016 financial results before the market opens on Feb 8. Last quarter, this utility reported a positive earnings surprise of 22.97%. Let’s see how things are shaping up at the company prior to this announcement.

Factors to Consider

During the third-quarter earnings call, Exelon raised its 2016 earnings expectation to the range of $2.55 to $2.75 per share from $2.40–$2.70 guided earlier, primarily buoyed by strong results from its subsidiaries including Commonwealth Edison Company (ComEd) and PECO Energy Company (PECO).These units are expected to continue with the strong performance in the fourth quarter as well.

The company’s cost savings initiative is yielding results, and has in fact helped it reduce Operation and Maintenance expenses and boost its margins.

Earnings Whispers

Our proven model does not conclusively show that Exelon is likely to beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. But that is not the case here, as you will see below.

Exelon Corporation Price and EPS Surprise


Exelon Corporation Price and EPS Surprise | Exelon Corporation Quote

Zacks ESP:  The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00% as both the estimates are pegged at 45 cents.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Though Exelon’s Zacks Rank #2 increases the predictive power of ESP, its 0.00% ESP makes surprise prediction difficult this quarter.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are a few stocks in the utility space worth considering as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Portland General Electric Company POR is slated to report earnings on Feb 17. It is has an Earnings ESP of +1.56% and a Zacks Rank #2..You can see the complete list of today’s Zacks #1 Rank stocks here.

Pinnacle West Capital Corporation PNW has an Earnings ESP of +4.08% and a Zacks Rank #2. It is slated to report earnings on Feb 24.

Entergy Corporation ETR has an Earnings ESP of +15.39% and a Zacks Rank #3. It is expected to release its quarterly numbers on Feb 15.

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Pinnacle West Capital Corporation (PNW): Free Stock Analysis Report
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