Business & Finance
Business and Finance
Business and Finance
Thu, November 18, 2010 Exelon Corporation, Ameren Corporation, Dynegy Inc., PPL Corporation and Bob Evans Farms
CHICAGO--([ BUSINESS WIRE ])--Zacks.com Analyst Blog features: Exelon Corporation (NYSE: [ EXC ]), Ameren Corporation (NYSE: [ AEE ]), Dynegy Inc. (NYSE: [ DYN ]), PPL Corporation (NYSE: [ PPL ]) and Bob Evans Farms Inc. (Nasdaq: [ BOBE ]).
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Here are highlights from Wednesdaya™s Analyst Blog:
Exelon Invests in Green Energy
Utility services company, Exelon Corporation (NYSE: [ EXC ]), announced that it will invest $5 billion in different cost-effective and clean energy projects to reduce carbon emissions. The investment will be made between 2010 and 2015, which will result in new material and equipment orders, engineering and construction contracts, and professional and technical service agreements.
This investment will help reduce 15.7 million metric tons of greenhouse gas emissions per year by 2020. The company has already achieved 50% of its objective by reducing emissions of 8 million metric tons of greenhouse gases.
Exelon's major peers, Ameren Corporation (NYSE: [ AEE ]), Dynegy Inc. (NYSE: [ DYN ]) and PPL Corporation (NYSE: [ PPL ]), are yet to come up with a structured attempt to reduce greenhouse gas emissions.
The adjusted earnings of Exelon at the end of third-quarter 2010 were $1.11 per share compared with 96 cents earned in the year-ago comparable period.
During the third quarter earnings call, the company raised the earnings expectation for 2010 to $3.95a"$4.10 per share from the prior range of $3.80a"$4.10. The narrowing of the guidance at the low-end reflects the strong performance of the company over the first nine months of 2010.
The Zacks Consensus Estimates for fourth quarter 2010, fiscal year 2010 and fiscal year 2011 are 92 cents per share, $4.01 and $4.10, respectively.
Our View
We appreciate Exelon's endeavors to reduce carbon emissions and produce greener energy. Such investments also help create thousands of jobs in the process, as witnessed in August, 2010, when an investment of $4.6 billion in different projects yielded new jobs.
Exelon currently retains a Zacks #3 Rank (short-term Hold rating). and we presently maintain a Neutral rating on the stock.
Based in Chicago, Illinois, Exelon Corporation, through its subsidiaries, engages in the generation, transmission, distribution and sale of electricity to residential, commercial, industrial and wholesale customers.
Bob Evans Misses on Higher Charges
Bob Evans Farms Inc. (Nasdaq: [ BOBE ]) announced second quarter 2011 earnings of 26 cents per share, which missed the Zacks Consensus Estimate of 41 cents and were also 48% below year-ago quartera™s 50 cents.
Earnings reduced in the second quarter of 2011 on the back of a fixed asset impairment charge of $10.3 million associated with five underperforming Mimia™s cafes and approximately $3.6 million of charges, given that the company closed down its sausage-production lines and paid out retirement and severance costs in its restaurant business.
The lower-than-expected second quarter results were due to higher cost in the food product segment and challenges at the top line in the restaurant segment.
The company posted a 1.8% year-over-year drop in net sales to $417.0 million, as combined same store-sales fell 2.2%, resulting from a 0.9% same store-sales decrease at Bob Evans restaurants and a 5.6% slip at Mimi's Cafe. The companya™s net sales also fell short of the Zacks Consensus Estimate of $419.0 million.
By segments, restaurant net sales declined 2.1% to $338.1 million and food products net sales fell 0.6% to $79.0 million.
Cost of sales escalated 80 basis points (bps) from the year-ago quarter to 29.8%, and selling and general administrative expense was up 360 bps to 11.9%. However, operating wages fell 170 bps to 33.6% and other operating expenses dipped 20 bps to 16.4%. Interest expense plunged $0.3 million year over year to $2.2 million due to lower average borrowings.
Consolidated adjusted operating income of Bob Evans Farms improved 9.4% year over year to $27.8 million and operating margin expanded 60 basis points (bps) to 6.7%.
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