Exelon Q1 2025 slides reveal robust earnings growth, $10-15B transmission opportunity

Introduction & Market Context

Exelon Corporation (NASDAQ:EXC) reported significant earnings growth in its first quarter 2025 results, presented during its May 1 earnings conference call. The utility holding company posted a 35% increase in adjusted operating earnings, driven by rate base growth and strategic investments in transmission infrastructure. This performance comes as Exelon continues to position itself as the premier transmission and distribution (T&D) utility in the United States, capitalizing on increasing electricity demand from data centers and the broader energy transition.

The company’s stock closed at $46.90 on April 30, 2025, near the middle of its 52-week range of $34.01 to $48.11. In pre-market trading on May 1, Exelon shares were down 1.17% at $46.35.

Quarterly Performance Highlights

Exelon reported GAAP earnings of $0.90 per share for Q1 2025, compared to $0.66 per share in the same period last year. Adjusted operating earnings reached $0.92 per share, up from $0.68 per share in Q1 2024, representing a 35% year-over-year increase.

As shown in the following earnings waterfall chart, the improvement was driven by multiple factors across Exelon’s utility subsidiaries:

The earnings growth was primarily attributed to favorable distribution and transmission rates, timing of distribution earnings, and return on regulatory assets. ComEd, the company’s Illinois utility, was a significant contributor to the positive results. All of Exelon’s utilities maintained top quartile or better performance in reliability metrics and achieved top decile safety performance during the quarter.

Capital Investment Strategy

Exelon affirmed its substantial capital investment plan of $38 billion through 2028, which is expected to drive a 7.4% rate base growth. Beyond this base plan, the company identified an additional $10-15 billion in potential transmission opportunities, positioning Exelon to capitalize on grid modernization needs.

The company’s balance sheet remains strong, providing strategic and financial flexibility to support these investments:

To fund its capital program, Exelon outlined its 2025 financing plan, which includes $425 million (approximately 60%) of its annualized equity need of $700 million already priced for issuance this year:

The company’s debt maturity profile is well-structured, with maturities spread across future years to minimize refinancing risk:

Strategic Positioning for Energy Transition

Exelon highlighted its strategic positioning to benefit from growing transmission needs driven by increased reliability requirements, accelerating load growth, and the evolving generation supply stack:

A key growth driver for Exelon is the booming data center market, particularly in Northern Illinois, where data center load has grown at a compound annual growth rate (CAGR) of approximately 24% historically:

The company is also actively engaged in energy security initiatives at federal, regional, and state levels. In Maryland, recent legislation focused on securing the state’s energy future includes provisions for 3 GW of dispatchable generation to be solicited by October 2025, creating additional investment opportunities for Exelon.

Financial Outlook

Exelon reaffirmed its 2025 adjusted operating earnings guidance of $2.64-$2.74 per share and maintained its 2024-2028 earnings per share CAGR of 5-7%, with expectations to perform at the midpoint or better of this range:

The company’s value proposition as the premier T&D utility includes customer rates that are 21% below the largest U.S. cities, a dividend payout ratio of approximately 60%, and a projected total annual return of 9-11%:

Exelon’s 2025 business priorities include deploying $9.1 billion in capital expenditures, maintaining industry-leading operational excellence, focusing on customer affordability, and achieving a consolidated operating ROE of 9-10%.

The company’s regulatory strategy remains focused on constructive outcomes in ongoing rate cases, with proceedings underway for DPL Delaware Gas and ACE Electric, with decisions expected in Q1 2026 and December 2025, respectively.

With its strong financial position, strategic investments in transmission infrastructure, and focus on capitalizing on data center growth and energy transition opportunities, Exelon appears well-positioned to deliver on its long-term growth targets while maintaining its commitment to reliability, affordability, and shareholder returns.

Full presentation:

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