Exelon net income increases 8.1 percent on one-time gains

Exelon Corp., the biggest U.S. nuclear power producer, said third-quarter profit rose 8.1 percent as one-time gains offset a drop in electricity prices.

Net income climbed to $757 million, or $1.14 a share, from $700 million, or $1.06, a year earlier, Chicago-based Exelon said today in a statement. Exelon also has operations in Warrenville.

Excluding such one-time items as an increase in the value of contracts locking in energy prices and gains from investments in a trust fund for decommissioning of reactors, per-share profit fell 10 percent to 96 cents, matching the average of 11 analyst estimates compiled by Bloomberg.

Wholesale prices in PJM Interconnection LLC, the largest U.S. power market, averaged $40.25 per megawatt-hour during the quarter, down 58 percent from a year earlier. Earnings may not climb until electricity prices increase, Chief Executive Officer John Rowe said last month. To counter lower prices, the company is reducing costs. Exelon announced 500 job cuts in June.

"They appear to be navigating a difficult environment with effective hedging and cost management," said Paul Patterson, an analyst at Glenrock Associates LLC in New York. "The impact of commodity pricing and the economy should play an increasingly significant role as time goes on."

Exelon rose 2 cents to $50.86 at 8:34 a.m. New York time in trading before U.S. exchanges opened. The stock, which has 11 buy and 8 hold ratings from analysts, has dropped 8.6 percent this year.

Revenue Drops

Third-quarter revenue fell 17 percent to $4.34 billion, Exelon said. The utility owner narrowed its full-year forecast for earnings per share excluding one-time items to a range of $4 to $4.10 from $4 to $4.30. The average analyst estimate was $4.11.

Exelon has been the most profitable U.S. utility company each of the past two years, mostly on the strength of nuclear plants that are relatively cheap to fuel. In June, the company said it would boost nuclear capacity by 1,300 to 1,500 megawatts. That's enough power for more than 1 million average U.S. homes.

In July, Exelon dropped its $7.53 billion hostile bid for Princeton, New Jersey-based NRG Energy Inc. after shareholders rejected its board nominees. The acquisition would have created the largest U.S. power producer. The company isn't pursing any other acquisitions, Rowe said last month in an interview.

(Exelon will hold an earnings conference call for analysts and investors, starting at 10:30 a.m. New York time. To listen, access a broadcast at {LIVE }.)