We expect Exelon Corporation EXC to pull off a positive earnings surprise when it reports second-quarter 2018 earnings on Aug 2. The utility reported an earnings surprise of 3.23% in the previously reported quarter.
Why a Likely Positive Surprise?
Our proven model shows that Exelon is likely to beat estimates because it has the right combination of the following two key ingredients — a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen.
Earnings ESP: Exelon has an Earnings ESP of +0.39%, indicative of a likely earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Exelon carries a Zacks Rank #2, which increases the predictive power of ESP. Stocks with a solid Zacks Rank combined with a positive ESP significantly have higher chances of an earnings beat.
Conversely, the Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Exelon Corporation Price and EPS Surprise
Factors to Consider
The company expects to generate operating earnings of 55-65 cents per share in the second quarter compared with 54 cents reported in last year’s comparable quarter. Also, Exelon is likely to benefit from its cost management initiatives through improved efficiency and productivity.
The Zacks Consensus Estimate for the company’s total revenues is pegged at $7,640 million, reflecting 1.7% growth from the year-ago quarter. The consensus estimate for second-quarter earnings is pegged at 61 cents per share compared with 52 cents in the prior-year period.
On Feb 9, 2018, the company has received a rate hike in the Delmarva, Maryland rate case which will increase the company’s revenue by nearly $13.4 million effective immediately. However, the company has also reached a settlement in April at Pepco Maryland for strategically incorporating revenue decreases of $15 million, with effect from Jun 1. The expected revenue decline is on account of passing the tax benefits to customers with the recent tax reform legislation.
Upcoming Releases
Exelon is not the only stock in the Zacks Utility Power industry, which is likely to report a positive surprise. Investors can also check out some other stocks worth considering from the same space this earnings season.
Ameren Corporation AEE is expected to report second-quarter earnings on Aug 3. The company has a Zacks Rank of 2 and an Earnings ESP of +1.69%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Dominion Energy Inc. D is expected to report second-quarter earnings on Aug 1. The company has an Earnings ESP of +0.84% and is a Zacks #2 Ranked player.
CenterPoint Energy Inc. CNP is expected to report second-quarter earnings on Aug 3. The company has an Earnings ESP of +0.93% and is a #2 Ranked stock.
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