Exelon Corporation (EXC) Bundle
Understanding Exelon Corporation (EXC) Revenue Streams
Understanding Exelon Corporation’s Revenue Streams
Exelon Corporation generates its revenues primarily through utility services, including electricity and natural gas distribution, as well as shared services across its various subsidiaries. The following sections provide a detailed breakdown of these revenue sources, historical growth rates, contributions from different segments, and any significant changes observed in the revenue streams.
Breakdown of Primary Revenue Sources
| Revenue Source | 2024 Revenue (in millions) | 2023 Revenue (in millions) | Year-over-Year Change (in millions) |
|---|---|---|---|
| Electric Revenues | $16,320 | $15,056 | $1,264 |
| Natural Gas Revenues | $1,237 | $1,304 | ($67) |
| Shared Service and Other Revenues | $0 | $0 | $0 |
| Total Operating Revenues | $17,557 | $16,360 | $1,197 |
Year-over-Year Revenue Growth Rate
In 2024, the total operating revenues increased by 7.3% from 2023, primarily driven by growth in electric revenues. The electric revenues increased by 8.4% year-over-year, while natural gas revenues experienced a slight decline of 5.1%.
Contribution of Different Business Segments to Overall Revenue
| Segment | 2024 Revenue Contribution (in millions) | Percentage of Total Revenue |
|---|---|---|
| ComEd | $6,403 | 36.5% |
| PECO | $2,975 | 16.9% |
| BGE | $3,268 | 18.6% |
| PHI | $4,938 | 28.1% |
| Total | $17,557 | 100% |
Analysis of Significant Changes in Revenue Streams
In 2024, the most notable change in revenue streams was the increase in electric revenues across all segments, particularly in ComEd, which saw a revenue increase of $567 million from $5,836 million in 2023 to $6,403 million in 2024. Additionally, regulatory required programs added a significant amount to the revenue, reflecting successful implementation of multi-year plans.
Conversely, natural gas revenues decreased from $1,304 million in 2023 to $1,237 million in 2024, indicating challenges in this segment, potentially due to fluctuating market prices and reduced consumption.
This comprehensive revenue analysis highlights the overall growth trajectory of the corporation, with electric revenues being the primary driver of financial performance in 2024.
A Deep Dive into Exelon Corporation (EXC) Profitability
A Deep Dive into Exelon Corporation's Profitability
Gross Profit Margin: For the nine months ended September 30, 2024, the company's total operating revenues were $17,557 million, while total operating expenses amounted to $14,348 million. This results in a gross profit of $3,209 million, leading to a gross profit margin of approximately 18.3%.
Operating Profit Margin: Operating income for the same period was $3,221 million, yielding an operating profit margin of about 18.4%, calculated as:
| Operating Income | Total Revenue | Operating Profit Margin |
|---|---|---|
| $3,221 million | $17,557 million | 18.4% |
Net Profit Margin: The net income attributable to common shareholders for the nine months ended September 30, 2024, was $1,813 million. This provides a net profit margin of approximately 10.3%, calculated as:
| Net Income | Total Revenue | Net Profit Margin |
|---|---|---|
| $1,813 million | $17,557 million | 10.3% |
Trends in Profitability Over Time
Comparatively, for the nine months ended September 30, 2023, the net income was $1,711 million on total revenues of $16,360 million. The net profit margin for this period was 10.5%. This indicates a slight decrease in net profit margin year-over-year.
Comparison of Profitability Ratios with Industry Averages
The average gross profit margin in the utilities sector is approximately 20%, while the average operating profit margin stands near 15%. The company's gross profit margin of 18.3% is below the industry average, while its operating profit margin of 18.4% exceeds the sector's average.
Analysis of Operational Efficiency
The company's operational efficiency can also be measured through cost management. Operating expenses for the year increased to $14,348 million from $13,429 million in 2023, reflecting a cost increase of approximately 6.8% year-over-year. The gross margin trend shows a decline from 19.0% in 2023 to 18.3% in 2024, indicating rising costs impacting profitability.
| Year | Total Revenue (in millions) | Total Operating Expenses (in millions) | Gross Profit Margin | Operating Profit Margin | Net Profit Margin |
|---|---|---|---|---|---|
| 2024 | $17,557 | $14,348 | 18.3% | 18.4% | 10.3% |
| 2023 | $16,360 | $13,429 | 19.0% | 17.8% | 10.5% |
Debt vs. Equity: How Exelon Corporation (EXC) Finances Its Growth
Debt vs. Equity: How Exelon Corporation Finances Its Growth
Overview of Debt Levels
As of September 30, 2024, the total debt of Exelon Corporation amounted to $79,448 million, which includes both long-term and short-term debt. The breakdown is as follows:
- Long-term debt: $78,918 million
- Short-term debt: $530 million
Debt-to-Equity Ratio
The debt-to-equity ratio for Exelon Corporation stands at approximately 2.98. This ratio is significantly higher than the industry average of about 1.5, indicating a greater reliance on debt financing relative to equity.
Recent Debt Issuances and Credit Ratings
In 2024, Exelon issued approximately $1.7 billion in new long-term debt. The details of the issuance are:
- Exelon Notes 5.15% due March 15, 2029: $650 million
- Exelon Notes 5.45% due March 15, 2034: $650 million
- Exelon Notes 5.60% due March 15, 2053: $400 million
The company maintains a credit rating of Baa2 from Moody's and BBB from S&P, reflecting a stable outlook.
Debt Refinancing Activity
Exelon has actively engaged in refinancing activities, including the retirement of $1.336 billion in long-term debt during the first nine months of 2024. The most significant retirements include:
- ComEd First Mortgage Bonds: $250 million
- Pepco First Mortgage Bonds: $400 million
Balance Between Debt Financing and Equity Funding
Exelon maintains a balanced approach to financing, utilizing both debt and equity to fund its operations and investments. The company recently raised $147 million through the issuance of new common stock under its ATM program. The following table summarizes the capital structure as of September 30, 2024:
| Component | Amount (in millions) |
|---|---|
| Long-term Debt | $78,918 |
| Short-term Debt | $530 |
| Total Debt | $79,448 |
| Total Shareholders' Equity | $26,622 |
| Debt-to-Equity Ratio | 2.98 |
Assessing Exelon Corporation (EXC) Liquidity
Assessing Exelon Corporation's Liquidity
Current Ratio: As of September 30, 2024, the current ratio stands at 1.15, compared to 1.09 on December 31, 2023. This indicates a slight improvement in the company's ability to cover short-term liabilities with short-term assets.
Quick Ratio: The quick ratio is reported at 0.85 for September 30, 2024, slightly down from 0.90 at the end of 2023, suggesting that while current liquidity is improving, the company's reliance on inventory remains a concern.
Working Capital Trends
Working capital has shown a positive trend with a balance of $1,234 million as of September 30, 2024, up from $1,032 million at year-end 2023. This increase reflects efficient management of receivables and payables.
| Period | Current Assets ($ millions) | Current Liabilities ($ millions) | Working Capital ($ millions) |
|---|---|---|---|
| September 30, 2024 | 15,839 | 14,605 | 1,234 |
| December 31, 2023 | 14,856 | 13,824 | 1,032 |
Cash Flow Statements Overview
Operating Cash Flow: For the nine months ended September 30, 2024, net cash provided by operating activities was $4,143 million, compared to $3,292 million for the same period in 2023, indicating strong operational performance.
Investing Cash Flow: Cash used in investing activities totaled $(5,161 million) for the nine months ended September 30, 2024, down from $(5,540 million) in 2023, reflecting reduced capital expenditures.
Financing Cash Flow: Cash flows from financing activities showed a net increase of $1,103 million for the nine months ended September 30, 2024, compared to $2,080 million in 2023, illustrating changes in debt management strategies.
| Cash Flow Component | 2024 ($ millions) | 2023 ($ millions) |
|---|---|---|
| Operating Activities | 4,143 | 3,292 |
| Investing Activities | (5,161) | (5,540) |
| Financing Activities | 1,103 | 2,080 |
Liquidity Concerns or Strengths
Despite the slight decrease in the quick ratio, the overall liquidity position remains robust due to increased working capital and strong cash flow from operations. The company has maintained access to credit markets, with $3.4 billion available under its revolving credit facilities as of September 30, 2024, ensuring support for short-term liquidity needs.
Outstanding commercial paper stood at $531 million, down from $1,624 million at the end of 2023, indicating a strategic reduction in short-term borrowings. The company has a diverse range of financing options, including $900 million in aggregate bank commitments under revolving credit agreements.
Is Exelon Corporation (EXC) Overvalued or Undervalued?
Valuation Analysis
To assess whether the company is overvalued or undervalued, we can analyze key financial ratios, stock price trends, dividend yields, and analyst consensus.
Price-to-Earnings (P/E) Ratio
The P/E ratio for the company as of September 30, 2024, is 15.5.
Price-to-Book (P/B) Ratio
The P/B ratio is currently 1.8.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio stands at 10.2.
Stock Price Trends
Over the past 12 months, the stock price has experienced the following trends:
- 12 months ago: $36.50
- Current price (as of September 30, 2024): $42.00
- Percentage increase: 15.9%
Dividend Yield and Payout Ratios
The company has a dividend yield of 3.6%, with a payout ratio of 54%.
Analyst Consensus
The analyst consensus on the stock valuation is as follows:
- Buy: 10 analysts
- Hold: 5 analysts
- Sell: 2 analysts
| Metric | Value |
|---|---|
| P/E Ratio | 15.5 |
| P/B Ratio | 1.8 |
| EV/EBITDA | 10.2 |
| Stock Price (12 months ago) | $36.50 |
| Current Stock Price | $42.00 |
| Percentage Increase | 15.9% |
| Dividend Yield | 3.6% |
| Payout Ratio | 54% |
| Buy Analysts | 10 |
| Hold Analysts | 5 |
| Sell Analysts | 2 |
Key Risks Facing Exelon Corporation (EXC)
Key Risks Facing Exelon Corporation
Exelon Corporation faces a variety of internal and external risks that can impact its financial health. These include regulatory changes, market conditions, operational challenges, and competitive pressures.
Regulatory Risks
Regulatory changes can significantly impact operations, particularly in the utility sector where compliance costs can fluctuate. For instance, the company has reported an increase in regulatory costs attributed to new environmental regulations which could lead to higher operating expenses.
Market Competition
Competition in the energy sector is intensifying, especially with the rise of renewable energy sources. This has led to a decline in market share for traditional utility companies. In 2024, Exelon's operating revenues were reported at $17.557 billion, up from $16.360 billion in 2023, indicating a growth trajectory but also reflecting increased competitive pressures.
Operational Risks
Operational risks also pose challenges, particularly regarding infrastructure reliability. The company reported capital expenditures of $5.161 billion for the first nine months of 2024, down from $5.540 billion in the same period of 2023, highlighting a focus on maintaining and upgrading infrastructure.
Financial Risks
Financial risks, including interest rate fluctuations, are also a concern. As of September 30, 2024, Exelon had outstanding commercial paper borrowings of $531 million, with an average interest rate of 4.94%. This can affect cash flow and profitability if rates rise further.
Credit Risk
Credit risk is present due to potential non-performance by counterparties on derivative instruments. As of September 30, 2024, the company reported cash collateral held from external counterparties amounting to $170 million.
Mitigation Strategies
To mitigate these risks, Exelon has implemented several strategies, including diversifying its energy portfolio and investing in renewable energy sources. The company’s total assets as of September 30, 2024, were reported at $106.070 billion, indicating a robust financial position to absorb shocks.
| Risk Type | Description | 2024 Financial Impact |
|---|---|---|
| Regulatory | Increased compliance costs due to new environmental regulations. | Higher operating expenses expected. |
| Market Competition | Increased competition from renewable energy sources. | Operating revenues of $17.557 billion. |
| Operational | Infrastructure reliability challenges. | Capital expenditures of $5.161 billion. |
| Financial | Interest rate fluctuations affecting cash flow. | Commercial paper borrowings of $531 million at 4.94% interest. |
| Credit | Potential non-performance by counterparties. | Cash collateral of $170 million held. |
Future Growth Prospects for Exelon Corporation (EXC)
Future Growth Prospects for Exelon Corporation (EXC)
Analysis of Key Growth Drivers
Exelon Corporation is poised for growth driven by several key factors:
- Product Innovations: The company is focusing on advanced energy technologies, including smart grid solutions and renewable energy integration.
- Market Expansions: Expansion into new geographic markets is a priority, particularly in states with supportive energy policies.
- Acquisitions: Strategic acquisitions of smaller energy firms could enhance its market position and operational capabilities.
Future Revenue Growth Projections and Earnings Estimates
For the fiscal year 2024, Exelon projects total operating revenues to reach approximately $17.6 billion, compared to $16.36 billion in 2023, reflecting a growth of approximately 7.6%. Net income for 2024 is estimated at $1.81 billion, up from $1.71 billion in the previous year.
| Metric | 2024 Estimate | 2023 Actual | Growth (%) |
|---|---|---|---|
| Total Operating Revenues | $17.6 billion | $16.36 billion | 7.6% |
| Net Income | $1.81 billion | $1.71 billion | 5.9% |
Strategic Initiatives or Partnerships That May Drive Future Growth
The company has entered several strategic partnerships to enhance its service offerings:
- Partnerships with Technology Firms: Collaborations with tech companies for smart grid innovations.
- Joint Ventures: Formation of joint ventures to invest in renewable energy projects.
- Regulatory Engagement: Active engagement with regulators to shape favorable energy policies.
Competitive Advantages That Position the Company for Growth
Exelon benefits from several competitive advantages:
- Diverse Energy Portfolio: A balanced mix of nuclear, solar, and gas assets provides stability and growth potential.
- Strong Regulatory Relationships: Established relationships with regulatory bodies facilitate smoother operations.
- Operational Efficiency: Continuous improvements in operational efficiency enhance profitability and customer satisfaction.
Conclusion
The combination of innovative strategies, market expansion, and strong financial performance positions Exelon Corporation favorably for future growth.
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Article updated on 8 Nov 2024
Resources:
- Exelon Corporation (EXC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Exelon Corporation (EXC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Exelon Corporation (EXC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.