Pepco Holdings Q1 Earnings Miss Estimates as Costs Rise

Zacks

Pepco Holdings Inc. POM reported first quarter 2015 earnings from continuing operations of 24 cents per share, missing the Zacks Consensus Estimate by 11.1%. Earnings declined 20% year over year.

Higher operation and maintenance, and depreciation expenses offset increased electric distribution revenue, leading to the earnings decline.

GAAP earnings per share were 21 cents, down 30% year over year. The difference between GAAP and operating earnings during the reported quarter was due to 3 cents of merger related costs.

Behind the Headlines

Total revenues in the first quarter were $1.31 billion, up 3.1% year over year driven by a 3.2% rise in revenues at Power Delivery.

Total regulated transmission & distribution electric sales, at Power Delivery, increased 2.7% to 12,597 gigawatt hours (GWh).

Total operating expenses in the reported quarter increased 6.2% from the year-ago period. Higher fuel and purchased energy as well as higher operation and maintenance costs led to the rise.

Financial Update

Cash and cash equivalents, including restricted cash, were $158 million as of Mar 31, 2015, up from $39 million as of Dec 31, 2014.

Long-term debts as of Mar 31, 2015, were $4.649 million, up 4.7% from $4.48 billion as of Dec 31, 2014.

Exelon Merger

Pepco Holdings expects the merger with Exelon Corp. EXC to materialize in the second or third quarter of 2015. The company has reached a merger settlement agreement with Montgomery and Prince George’s counties and other parties in Maryland.

Other Company Releases

DTE Energy Comp.’s DTE first-quarter 2015 operating earnings per share of $1.65 surpassed the Zacks Consensus Estimate of $1.49 by 10.74%

PG&E Corp.'s PCG earnings per share of 87 cents in the first quarter beat the Zacks Consensus Estimate of 68 cents by 27.94%.

Zacks Rank

Pepco Holdings currently has a Zacks Rank #3 (Hold).

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