Why Consolidated Edison, Inc. (NYSE: ED) stock is under pressure

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Consolidated Edison, Inc. (NYSE: ED) stock fell over 0.01% on 20th Feb, 2020 (as of 4:04 pm GMT-5 ; Source: Google finance) after the company posted mixed results for the fourth quarter of FY 19. The power company’s profit for the fourth quarter fell to $295 million, from $331 million, a year earlier. The company’s recently approved three-year rate plans are will help New York State to achieve its clean energy goals. The company will be offering customers incentives to consider geothermal systems, heat pumps and other clean energy alternatives that will help in lowering carbon emissions.

ED in the fourth quarter of FY 19 has reported the adjusted earnings per share of 87 cents, beating the analysts’ estimates for the adjusted earnings per share of 80 cents, according to analysts surveyed by FactSet. The company had reported 0.1 percent fall in the adjusted revenue to $2.95 billion in the fourth quarter of FY 19, missing the analysts’ estimates for revenue of $3.12 billion.

ED expects adjusted profit for fiscal 2020 to be in the range of around $4.30 to $4.50 a share. ED projects making around $3.9 billion in capital investments this year. Con Edison intends to meet its capital requirements for 2020 through 2022, that will comprise of maturing securities, through internally-generated funds and the issuance of long-term debt and common equity. The company has the plan to include the issuance in the range of $1,500 million and $2,000 million of long-term debt, mainly at the Utilities, in 2020 and approximately $1,800 million in aggregate of long-term debt at the Utilities during 2021 and 2022. The planned debt issuance is in addition to the issuance of long-term debt to refinance maturities at the Utilities and debt secured by the Clean Energy Businesses’ renewable electric production projects and by Con Edison Transmission’s investments. The company has plan to include the issuance of up to $600 million of common equity in 2020 and about $1,100 million in total of common equity during 2021 and 2022, in addition to equity under its dividend reinvestment, employee stock purchase and long-term incentive plans. The planned equity issuance reflects the addition to $88 million of equity issued in January 2020 to settle the remainder of a May 2019 equity forward transaction.

Furthermore, the company expects operations and maintenance expenses are expected to be of $3,012 million for FY 20. The company is also projecting a five-year compounded annual adjusted earnings per share growth rate to be in the range of 3% to 5% based off 2020 adjusted earnings per share guidance.

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