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Tickers in this Article: ED
On Monday, November 5, 2012, Consolidated Edison (NYSE:ED) is expected to release its third quarter earnings.

In most situations, when earnings do not meet analyst estimates, a business' stock price will tend to drop. On the other hand, when actual earnings beat estimates by a significant amount, the share price will likely surge. SEE: Earnings: Quality Means Everything

What to Expect: The consensus estimate for Consolidated Edison's earnings is $1.37 per share, up 3.8% from a year ago when the company reported earnings of $1.32 per share.

The figure has risen from $1.36 over the past three months. Analysts are expecting earnings of $3.77 per share for the fiscal year.

Consolidated Edison is expected to report revenue of $3.88 billion for the quarter, beating last year's figure of $3.63 billion by 6.9%. Revenue of $13.14 billion is expected for the fiscal year.

Company Performance: In the last four quarters, revenue for Consolidated Edison has been falling. It decreased 7.4% to $2.77 billion in the second quarter. Prior to that, the figure fell 8.1% in the first quarter, 5.5% in the fourth quarter of the last fiscal year and 2.1% in the third quarter of the last fiscal year.

ED's P/E ratio of 16.6 is above the industry average of 13.46. This could mean that the market is expecting big things over the next few months or years. There are generally two price/earnings ratios calculated: the first, called the trailing Price/Earnings ratio, is calculated using the previous years actual earnings; the second, called forward Price/Earnings ratio, is calculated using the next year's estimated earnings. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: The P/E Ratio: A Good Market-Timing Indicator

The stock price has fallen 6.7% since August 2, 2012, from $64.25 to $59.97. Consolidated Edison's stock price is currently in the middle of a rising streak. The stock has risen 27 cents per share since October 23, 2012.

The Competition: Consolidated Edison provides electric, gas, and steam utility services to customers through its subsidiaries. Eight of 12 analysts rate Consolidated Edison a hold. They have become increasingly pessimistic about the stock, as the number of buy ratings has dropped slightly over the last three months.

The company's closest competitor in the electric utilities industry is FirstEnergy (FE). Analysts are less optimistic about Consolidated Edison than about FirstEnergy. Four out of 15 analysts rate the latter a buy compared to one of 12 for the former.

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