Why Is Exelon (EXC) Up 1.9% Since Its Last Earnings Report?

A month has gone by since the last earnings report for Exelon Corporation EXC. Shares have added about 1.9% in that time frame.

Will the recent positive trend continue leading up to its next earnings release, or is EXC 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 catalysts.

Exelon Lags Q4 Earnings Estimates, Gives 2018 Guidance

Exelon Corporation’s fourth-quarter 2017 operating earnings of 55 cents per share lagged the Zacks Consensus Estimate of 62 cents by 11.3%.  However, quarterly earnings were 25% higher than the year-ago figure of 44 cents.

On a GAAP basis, quarterly earnings were $1.94 per share compared with 22 cents in the year-ago quarter. The difference between GAAP and Operating earnings in the reported quarter was due to some one-time gains and losses.

Total Revenues

Exelon's operating revenues of $8,381 million surpassed the Zacks Consensus Estimate of $7,596 million by 10.3%.

Quarterly revenues also improved 6.4% from $7,895 million reported in the year-ago quarter.

Quarterly Highlights

Exelon's total operating expenses increased 3.7% year over year to $7,336 million. The rise was primarily due to higher purchasing power and fuel expenses, and operating and maintenance expenses.

Interest expenses were $365 million compared with $356 million in the year-ago quarter.

Hedges

Exelon's hedging program involves 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, 2017, was 85-88% for 2018, 55-58% for 2019, and 26-29% for 2020.

Guidance

Exelon provided 2018 earnings guidance per share in the range of $2.90-$3.20. The guidance takes into consideration the benefits of U.S. tax reform and strong utility growth among others.

The company plans to invest a total of $21 billion to strengthen its existing infrastructure in the next few years.  The capital expenditure and tax reforms are expected to drive annual rate base growth of 7.4% through 2021, exceeding growth expectations of 6.5% for 2017-2020 projected a year ago.
 

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month. There have been two revisions higher for the current quarter In the past month, the consensus estimate has shifted by 16.8% due to these changes.

Exelon Corporation Price and Consensus

 

Exelon Corporation Price and Consensus | Exelon Corporation Quote

VGM Scores

At this time, EXC has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 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.

The company's stock is suitable solely for value based on our styles scores.

Outlook

Estimates have been trending upward for the stock and the magnitude of these revisions looks promising. It comes with little surprise EXC has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

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