U.S. utility Exelon misses first-quarter profit estimates on higher costs
May 2 (Reuters) -Utility firm Exelon EXC.O missed Wall Street estimates for first-quarter profit on Thursday, hurt by higher operating and maintenance costs and higher interest expenses.
The company reported an adjusted profit of 68 centsper share for the quarter ended March 31, slightly below analysts' average estimates of 70 cents per share, according to LSEG data.
WHY ITS IMPORTANT
Higher utility earnings from base rate increases at Baltimore Gas and Electric Co (BGE) were offset by higher operating expenses overall, and storm impacts at PECO Energy Company (PECO) in Pennsylvania.
Additionally, overall interest expenses came in at $468 million, a rise of 13.6% from the year-ago period.
CONTEXT
A winter storm in January gripped much of the United States, impacting utility operations all over.
Utility companies use General Rate Case (GRC) proceedings with the respective commissions to claim a revenue shortfall and ask for an increase in rates on the basis of their total cost of providing services.
Additionally, the U.S. Federal Reserve's interest-rate hikes to tame inflation have made borrowing more expensive for businesses. Higher rates led to the utilities sector .SPURCL falling 10% last year to its lowest since 2008.
BY THE NUMBERS
While all the utility's subsidiaries reported an increase in customers, PECO, BGE, and its Delaware and Maryland subsidiary, DPL, were affected by lower revenues from natgas.
Average U.S. natural gas prices NGc1 were 30% lower in the reportedquarter as a milder-than-expected winter hurt demand for heating fuel.
Exelon, however, reported an overall revenue of $6.04 billion for the quarter ended March 31, compared with analysts' average estimate of $5.57 billion, according to LSEG data.
The utility reaffirmed its forecast range for 2024 adjusted operating earnings of $2.40-$2.50 per share.
Reporting by Seher Dareen in Bengaluru; Editing by Shailesh Kuber
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