Pepco Holdings Earnings: Everything You Must Know Now

Pepco Holdings, Inc. (NYSE:POM) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company.

Pepco Holdings, Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 12% to $0.22 in the quarter versus EPS of $0.25 in the year-earlier quarter.

Revenue: Decreased 10.69% to $1.05 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Pepco Holdings, Inc. reported adjusted EPS income of $0.22 per share. By that measure, the company missed the mean analyst estimate of $0.23. It missed the average revenue estimate of $1.22 billion.

Quoting Management: “While second quarter results were positively impacted by our investments in utility infrastructure aimed at ongoing improvement of system reliability and customer service, recent distribution base rate case outcomes have been disappointing,” said Joseph M. Rigby, Chairman, President and Chief Executive Officer. “In mid-July, the Pepco Maryland distribution base rate case decision provided less than half of the requested revenue increase and denied two of the three grid resiliency charge proposals. We have filed an appeal of this decision and plan to file Pepco’s next base rate case in Maryland by the end of the year. In addition, we recently settled our Atlantic City Electric distribution base rate case, and as a result reduced planned capital expenditures in New Jersey by a total of $150 million through 2015 to better align spending with revenue. We remain committed to system reliability and improving the customer experience, but expect timely cost recovery and the opportunity to earn reasonable rates of return on Pepco Holdings’ extensive investments.”

Key Stats (on next page)…

Revenue increased 23.59% from $852 million in the previous quarter. EPS decreased 8.33% from $0.24 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.43 to a profit $0.45. For the current year, the average estimate has moved down from a profit of $1.14 to a profit of $1.13 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)