Exelon’s adjusted profit edges up but GAAP net income falls 16.7% (NASDAQ: EXC)

What happened

Exelon Corporation (NASDAQ: EXC) reported third-quarter adjusted operating earnings of $0.87 per share, up a cent from a year earlier. The company said the result was above expectations.

GAAP net income per share moved the other way, falling to $0.70 from $0.86. GAAP net income fell 16.7% from $875 million a year earlier. Adjusted operating earnings rose 2.6% from $874 million.

Exelon narrowed its full-year 2026 adjusted operating earnings guidance to $2.85-$2.91 per share. It also affirmed operating EPS growth near the top end of 5% to 7% a year from 2025 to 2029. On Oct. 30 the board declared a regular quarterly dividend of $0.42 per share, payable Dec. 15 to holders of record as of Dec. 4.

Key numbers

Metric	Latest	Change	Source
Adjusted operating EPS, Q3	$0.87	from $0.86, +$0.01	SEC 8-K, Exhibit 99.1
GAAP net income per share, Q3	$0.70	from $0.86, -$0.16	SEC 8-K, Exhibit 99.1
GAAP net income, Q3	$729 million	from $875 million, -16.7%	Calculated from SEC 8-K
Adjusted operating earnings, Q3	$897 million	from $874 million, +2.6%	Calculated from SEC 8-K
PECO GAAP net income, Q3	$165 million	from $250 million, -34.0%	Calculated from SEC 8-K
2026 adjusted EPS guidance range	$2.85-$2.91		SEC 8-K, Exhibit 99.1

Read more: Exelon (EXC) company research

How the four utilities compared

ComEd carried the gain. Its GAAP net income rose to $406 million from $373 million, and adjusted earnings rose 10.5% to $412 million. The filing credits higher rate base from new investments, plus higher AFUDC.

BGE's GAAP net income rose to $90 million from $82 million. Adjusted earnings reached $119 million. The filing ties that to approved distribution rates and lower contracting costs.

PHI split by measure. GAAP net income fell to $187 million from $291 million. Adjusted earnings rose 10.3% to $320 million from $290 million on approved distribution rates, partly offset by higher storm costs, depreciation and interest expense.

PECO was the weak spot. GAAP net income fell to $165 million from $250 million, and adjusted earnings dropped 33.2% to $167 million. The filing points to higher storm costs, because extraordinary February and June 2025 storm cost deferrals did not recur. It also cites higher income taxes from tax repairs, part of which is timing. Higher contracting, depreciation and interest costs added pressure. Absent surcharge credits to customers and favorable weather offset part of it.

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Why GAAP and adjusted earnings diverge

Exelon's adjusted figure leaves out items it says are not directly related to ongoing operations. The largest is $130 million after tax for regulatory matters, described as the disallowance of certain capitalized costs. PHI's column holds $133 million of that item.

Exelon also added back $26 million of project impairments and $15 million for a cost management program. It deducted a $3 million change in environmental costs. Those adjustments bridge GAAP net income of $729 million to $897 million of adjusted earnings. Adjusted operating earnings are a non-GAAP measure, and the filing says they should not replace GAAP net income.

Why it matters

OptimistFi has argued that Exelon creates value when rate cases and capital spending grow the regulated asset base. ComEd, BGE and PHI fit that pattern, with higher adjusted earnings tied to approved rates and rate base. On Aug. 28 the Maryland Public Service Commission also approved a $51 million increase in Pepco's annual electric distribution base rates at a 9.40% return on equity, effective Aug. 10.

The quarter was not uniformly better. Adjusted EPS rose only one cent, GAAP net income fell, and PECO's adjusted earnings dropped by a third. The filing blames storm, tax, contracting, depreciation and interest costs. A rate-base story has to absorb those costs. OptimistFi reads the quarter as mixed for the case.

Spending runs ahead of cash flow

Capital spending is outpacing the cash the utilities generate. For the nine months ended Sept. 30, net cash from operating activities rose 7.9% to $5.40 billion. Capital expenditures rose 11.6% to $6.80 billion, about $1.4 billion more than operating cash flow.

Exelon funded the gap with outside capital. It issued $4.43 billion of long-term debt, against $4.93 billion a year earlier, and $483 million of common stock, against $173 million. Long-term debt stood at $50.79 billion on Sept. 30, up from $47.41 billion at Dec. 31, 2025.

Exelon said it completed its 2026 planned debt financings. On Aug. 10 PECO issued $750 million of 5.00% First Mortgage Bonds due Sept. 1, 2031. On Sept. 16 DPL issued $75 million of 5.00% First Mortgage Bonds due Sept. 16, 2036. Both used the proceeds to repay existing debt and for general corporate purposes.

What's next

Exelon scheduled a conference call and webcast for Oct. 30 at 9 a.m. Central Time (10 a.m. Eastern Time), with materials at investors.exeloncorp.com. Management's comments on PECO's storm and tax costs will bear on whether that unit's decline reverses.

The next test is the fourth quarter. Exelon needs full-year adjusted operating earnings inside the $2.85-$2.91 per share range to keep the narrowed guidance credible. The $0.42 dividend is payable Dec. 15 to holders of record as of Dec. 4.

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