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Why Is Con Ed (ED) Up 0.1% Since Last Earnings Report?

Zacks Equity Research

It has been about a month since the last earnings report for Consolidated Edison (ED). Shares have added about 0.1% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Con Ed 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 recent earnings report in order to get a better handle on the important drivers.

Consolidated Edison Q1 Earnings Beat, Revenues Up Y/Y

Consolidated Edison Inc. reported first-quarter 2019 adjusted earnings of $1.38 per share, which surpassed the Zacks Consensus Estimate of $1.35 by 2.2%.

Barring one-time adjustments, the company posted GAAP earnings of $1.31 per share, reflecting a 4.4% decline year over year. This downside was primarily on account of higher operating expenses.

Total Revenues

In the reported quarter, the company’s total revenues of $3,514 million outshined the Zacks Consensus Estimate of $3,393 million by 3.6%. Moreover, the top line increased 4.5% from $3,364 million in the year-ago quarter.

Electric revenues totaled $1,941 million in the firstquarter, up 3.4% from the prior-year figure of $1,877 million. Gas revenues rose 10.1% to $1,034 million. Also, steam revenues increased 2.2% to $321 million. Meanwhile, non-utility revenues amounted to $218 million, down 6.8% from $234 million registered in the year-earlier quarter.

Operating Statistics

Total operating expenses in the firstquarter rose 4.6% year over year to $2,728 million.

Purchase power, gas purchased for resale, depreciation, and amortization as well as taxes and other than income taxes increased 4.2%, 16.9%, 18.7% and 6.1%, respectively, from the prior-year quarter numbers. However, fuel expenses as well as other operations and maintenance declined 14.5% and 5% year over year, respectively.

Financials

Cash and temporary cash investments as of Mar 31, 2019, summed $406 million compared with $895 million as of Dec 31, 2018.

Long-term debt was $16,933 million as of Mar 31, 2019, compared with $17,495 million at 2018 end.

At the end of the first quarter, cash from operating activities amounted to $395 million compared with $56 million a year ago.

2019 Guidance

For 2019, the company continues to expect adjusted earnings per share to be in the $4.25-$4.45 range. The Zacks Consensus Estimate for full-year earnings, pegged at $4.36, lies just abovethe midpoint of the company’s guided range.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

Currently, Con Ed has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

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

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Con Ed has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.



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