Power provider Exelon Corporation (EXC) reported better-than-expected first-quarter 2010 results on improving electricity demand. Earnings per share came in at $1.00, above the Zacks Consensus Estimate of 89 cents.
Year-Over-Year Comparisons Down
On a year-over-year basis, Exelon’s earnings per share declined 16.7% (from $1.20 to $1.00), while revenue was down 9.7% to $181.6 million. The fall was primarily due to lower energy gross margins, increased planned nuclear outage costs, a tax ruling benefit realized last year and higher depreciation and amortization expense. On the sales front, adjusted operating revenue fell to $4.5 billion in the first quarter from $4.8 billion in the year-ago period.
Generation
Generation’s average realized margin on all electric sales, including sales to affiliates and excluding trading activity, was $37.26 per megawatt hour (MWh) in the first quarter of 2010, compared with $39.25 per MWh in the corresponding quarter of last year. Its nuclear plants achieved a 92.3% capacity factor for the reported quarter compared with 96.2% in the year-ago quarter.
Output from the nuclear fleet fell to 34,109 gigawatt hour (GWh) from 35,382 GWh in the year-ago quarter. Output fell due to a higher number of refueling outage days, which rose to 101 days from 34 in the year-ago quarter.
Non-refueling outage days fell by eight days to 5 days from 13 in the year-ago period. In the reported quarter, the equivalent availability factor for the hydroelectric facilities was 95.4% compared with 94.4% in the corresponding period last year, primarily reflecting the impact of an earlier-than-planned outage at the Muddy Run facility in March 2009.
Commonwealth Edison Company (ComEd)
Heating degree days in the ComEd service territory during the first quarter were down 6.3% relative to the same period in 2009, and were 3.1% below normal. ComEd’s total retail kilowatt-hour (kWh) deliveries decreased 1.9% quarter-over-quarter, with declines in deliveries to all major customer classes, affected by the current economic and unfavorable weather conditions. Weather-normalized retail kWh deliveries decreased 0.8% from the year-ago quarter.
PECO Energy Company (PECO)
Heating degree-days in the PECO service territory were down 4.9% from 2009, and were 3.9% below normal. Total retail kWh deliveries decreased 0.5% from last year, reflecting a decline in deliveries across all customer classes, pulled down by the impact of current unfavorable weather conditions.
On the retail gas side, deliveries in the first quarter were 3.6% lower from the previous-year period. Weather-normalized retail kWh deliveries increased 0.5% from last year, primarily reflecting improved residential deliveries.
Hedging Status
Exelon’s hedging program involves the hedging of commodity risk for Exelon’s expected generation, typically on a ratable basis over a three-year period. The proportion of expected generation hedged as of Mar 31, 2010 is 95% – 98% for 2010, 79% – 82% for 2011 and 48% – 51% for 2012.
Guidance
Exelon raised the bottom end of its guidance range for 2010 operating earnings to $3.70 from $3.60, while keeping the upper end at $4.00.
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