Electric and natural gas utility company Pepco Holdings Inc. (POM) is slated to release its fourth quarter results before the market opens Friday.
On average, seven analysts polled by Thomson Reuters expect the company to post earnings of $0.18 per share for the quarter, with estimates ranging between $0.13 and $0.24 per share, in comparison to prior year's earnings of $0.32 per share. Analysts' estimates typically exclude special items.
In its preceding third quarter, Washington, DC-based Pepco said its profit increased from last year, as lower expenses helped offset a significant drop in revenue. On an adjusted basis, quarterly earnings decreased over the year-ago, due to increased pension expense and higher interest expense. The company posted net earnings of $124 million or $0.56 per share for the third quarter, compared to $119 million or $0.59 per share in the prior year quarter. Excluding special items, earnings would have been $97 million or $0.44 per share for the third quarter of 2009. Third quarter operating revenue declined to $2.54 billion from $3.06 billion in the same quarter last year.
Founded in 1896, Pepco, a diversified energy company, operates in two businesses, Power Delivery and Competitive Energy. The Power Delivery business engages in the distribution, transmission, and supply of electricity, as well as the delivery and supply of natural gas. Meanwhile, the Competitive Energy business engages in the competitive generation, marketing, and supply of electricity and natural gas, and provides related energy management services primarily in the mid-Atlantic region.
In a December 2 research note, Credit Suisse downgraded its rating on Pepco shares to 'Neutral' from 'Outperform' with a price target of $16. Analyst Eggers said that his downgrade is rooted in valuation and his view that sustained outperformance from current levels looks more difficult.
Among peers, power generation and distribution company Allegheny Energy, Inc. (AYE) in early February reported a higher fourth-quarter profit, as income from regulated operations increased and unregulated generation business turned to a profit compared to the prior year quarter. The Greensburg, Pennsylvania-based company's fourth-quarter net income increased to $109.3 million or $0.64 per share from $16.2 million or $0.10 per share, a year ago. On a non-GAAP basis, net income increased to $112.7 million or $0.66 per share from $87.1 million or $0.51 per share in the year-earlier quarter. Revenues rose to $861.1 million from $707.8 million in the fourth quarter of 2008.
Constellation Energy (CEG), on February 22, reported a profit for the fourth quarter, compared to a loss last year, helped by a huge gain from the sale of its stake in Constellation Energy Nuclear Group, LLC, or CENG, to Electricite de France. The Baltimore, Maryland-based company's net income applicable to common stock for the quarter was $4.421 billion or $21.96 per share, compared to a loss of $1.406 billion or $7.75 per share last year. Adjusted earnings for the quarter were $0.30 per share. In the previous year, adjusted earnings totaled $0.03 per share. Total revenues for the quarter dropped to $3.404 billion from $4.850 billion in the prior year.
POM closed Thursday's regular trading session at $19.60, down $0.46, on a volume of 3.5 million shares. In the past 52 weeks, shares have been trading between $10.07 to $17.57.
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