Exelon Earnings: An Early Look

Earnings season is in full swing, with huge numbers of companies having already given their latest numbers to investors. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Let's turn to Exelon (EXC -0.49%). The utility has one of the best-diversified electrical generation businesses in the industry, with extensive nuclear and renewable holdings to complement its fossil-fuel-based power plants. Let's take an early look at what's been happening with Exelon over the past quarter and what we're likely to see in its quarterly report on Thursday.

Stats on Exelon

Source: Yahoo Finance.

Will Exelon light it up in its quarterly report?
Exelon has kept analysts relatively happy over the past few months, as consensus estimates for earnings per share haven't budged in that time. The stock hasn't been quite that solid, though, falling more than 2% in an up market since early November.

Exelon has struggled throughout much of the past year because of its unique position among utility companies. For Southern (SO -0.84%) and Duke Energy (DUK -1.00%), the massive decline in natural gas prices has opened up major opportunities, easing the conversion of coal-fired plants to gas-fired replacements that meet environmental regulations by removing much of the cost differential that used to put natural gas at a competitive disadvantage to coal. Yet for Exelon, with its big portfolio of nuclear and renewable generation capacity, cheaper fossil-fuel-based production means lower margins and greater competition.

But Exelon has made big strides recently. Its merger last year with Constellation Energy has boosted revenue and helped Exelon keep up with the consolidation craze throughout the industry. Moreover, with interest in renewable energy continuing to build, Exelon brought a new wind project in Idaho on line in December and is continuing to work on its Antelope Valley solar project in California. As Duke and NRG Energy (NRG -0.18%) have pushed forward with renewable projects of their own, it's increasingly important for Exelon to keep up.

Many investors will worry about the short-term drop in earnings, but Exelon has demonstrated a past ability to roll with the punches and get favorable long-term growth. In looking at the report, be sure to assess not just current conditions but also management's views of where nuclear and renewable energy are headed in the years to come.

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