By Lisa Beilfuss
Exelon Corp. said first-quarter profit soared amid a strong
performance in its Pennsylvania business and a swing in
hedging-related activity.
The company recorded a $100 million hedging-related gain in the
quarter, after having taken a $443 million hedging-related hit in
the first quarter last year. The gain added 11 cents to per-share
earnings, whereas hedging activity shaved 52 cents off last year's
result.
The Chicago-based power company has been expanding through
acquisitions, and most recently unveiled plans to buy Pepco
Holdings Inc. The $6.8 billion deal, pending approval of several
state regulators, is expected to close later this year and would
boost Exelon's base by two million accounts to 10 million in five
states and Washington, D.C., as electric utilities generally are
attempting to adjust to sluggish sales.
On a call Wednesday with analysts, management dismissed rumors
that Maryland's governor is against the deal and said the company
anticipates a successful outcome. Management said that if the deal
is rejected, it would use the cash raised for the deal to fund
growth or return value to shareholders through other means.
In the latest quarter, Exelon said the $60 million Integrys
deal, which it unveiled last summer, helped drive results.
Weather was a mixed factor for the company. Profit at the
company's PECO segment, which provides electricity and natural gas
to about 2.1 million customers in southeastern Pennsylvania, rose
an adjusted 57% to $140 million as heating degree-days in the
market were up 3.2% and were 18.4% above normal. Natural gas
deliveries rose 4.9%.
Meanwhile, profit at the ComEd segment, which services nearly
four million customers in Illinois, slid an adjusted 6.1% to $92
million as heating degree-days fell 6.2% and total electric
deliveries decreased 3.5%.
In its generation segment, which includes nuclear energy and
provides power to customers in Illinois, Pennsylvania, Maryland,
New Jersey and New York, Exelon swung to a profit of $443 million,
up from a loss of $185 million from a year-earlier. The company
said the increase was primarily a result of lower cost to serve
load, the Integrys acquisition and the cancellation of the Energy
Department spent nuclear fuel disposal fees, factors which were
partially offset by lower realized energy prices.
Overall, the company reported a profit of $693 million, or 80
cents a share, up from earnings of $90 million, or 10 cents a
share, a year earlier. Excluding certain items, per-share profit
rose to 71 cents from 62 cents.
Revenue slid 9.2% to $8.8 billion.
Analysts expected 69 cents in a share in profit and $7.1 billion
in revenue, according to Thomson Reuters.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
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