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Consolidated Edison (ED) Misses Q2 Earnings, Narrows View

Consolidated Edison Inc. ED posted second-quarter 2017 adjusted earnings of 58 cents per share that missed the Zacks Consensus Estimate of 61 cents by 4.9%. Reported earnings also dropped 3.3% from the year-ago figure of 60 cents.

Excluding one-time adjustments, the company reported earnings of 57 cents per share, down from 78 cents of the year-ago period.

Total Revenue

Consolidated Edison reported total revenue of $2,633 million in the second quarter, which missed the Zacks Consensus Estimate of $2,794 million by 5.8%. Revenues also dropped 58% from the year-ago level of $2,794 million.

Electric revenues came in at $1,965 million in the reported quarter, down 3.4% from the prior-year figure of $2,035 million. Gas revenues improved 29.5% to $435 million. Steam revenues grew 3.5% to $88 million, while non-utility revenues amounted to $145 million, down 57.1% from $338 million a year ago.

Consolidated Edison Inc Price, Consensus and EPS Surprise

Consolidated Edison Inc Price, Consensus and EPS Surprise | Consolidated Edison Inc Quote

Operating Statistics

Total operating expenses in the quarter decreased 3% to $2,211 million due to lower purchase power, and other operations and maintenance expenses.

Gas purchased for resale, depreciation and amortization, fuel and taxes, and other than income taxes were up 84%, 9.9%, 15.1% and 5.4%, respectively. Meanwhile, purchase power, and other operations and maintenance expenses decreased 26.9% and 5.7%, respectively.

Financials

Cash and temporary cash investments as of Jun 30, 2017 were $816 million compared with $776 million as of Dec 31, 2016.

Long-term debt was $14,703 million as of Jun 30, 2017 compared with $14,735 million at 2016 end.

At the end of the second quarter, cash from operating activities was $1,574 million compared with $1,631 million in the year-ago period.

Guidance

For 2017, the company has raised the lower end of its earnings per share guidance range. Currently, it expects to generate earnings per share in the range of $4.00–$4.15 compared with the prior range of $3.95–$4.15.

Zacks Rank and Stock to Consider

Consolidated Edison currently has a Zacks Rank #4 (Sell).

A better-ranked stock in the Utility space is Duke Energy Corp. DUK, which holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Duke Energy surpassed the Zacks Consensus Estimate in two of the trailing four quarters, with an average positive earnings surprise of 2.94%. The company boasts a long-term EPS growth rate of 5%.

Peer Earnings Review

Entergy Corporation ETR reported second-quarter 2017 operational earnings of $3.11 per share, beating the Zacks Consensus Estimate of $1.20 by 159.2%. However, the reported number was in line with the year-ago figure.

CenterPoint Energy, Inc. CNP reported second-quarter 2017 adjusted earnings of 29 cents per share, beating the Zacks Consensus Estimate of 21 cents by 38.1%. Quarterly earnings improved 70.6% from the year-ago figure of 17 cents.

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