In the midst of earnings season, many hoped that we could take a few weeks to focus on the U.S. economy and put international affairs on the backburner. But yesterday saw news that there is great concern that the Greek debt deal may fall through and that the S&P is likely to peg the nation with a “Selective Default” tag. With the euro zone once again gobbling up headlines, earnings from Jonson & Johnson, Yahoo!, McDonald’s, and others were afterthought as major indexes dragged to open up Tuesday’s session. Still, with a number of major firms slated to announce their earnings in the coming days, investors can only hope that strong numbers will help overshadow a flailing euro [see also 12 High-Yielding Commodities For 2012].
Today will see the most recent earnings announcement from Exelon Corporation (EXC). Exelon has been in the limelight over the past year after the Fukushima tragedy in Japan because of the heavy ties to nuclear energy that the company maintains. Many speculated over the future of nuclear and whether or not it was a safe alternate to fossil fuels; some countries like Germany even put in legislation to eliminate nuclear energy entirely. But aside from nuclear energy, Exelon generates electricity a through a number of different sources for citizens all around the US [see also 25 Ways To Invest In Alternative Energy].
Analysts are calling for today’s report to show EPS of $0.88 with revenues just below $5 billion. If the firm is able to hit its marks, it will represent a 3.1% growth in overall 2011 sales, which will give a nice headwind to this stock. EXC has surpassed their last four analyst estimates, boding well for investors as today’s report comes at a particularly volatile time. As for the stock itself, EXC has a market cap of $26 billion while paying out a hefty dividend yield of 5.3%. Despite their strong earnings past, it is important to note that any further developments overseas will ultimately take the reins of the market today [see also Nuclear ETF Meltdown: Four Funds Rocked By The Japanese Quake].
In light of this report, today’s ETF to watch will be the Utilities Select Sector SPDR (XLU). XLU was one of the better performing equity ETFs of 2011 as it gained over 19.5% for its investors. The fund invests in a number of major utilities securities, with Exelon ranking as its third biggest holding (6.5%). If EXC beats the Street, look for XLU to enjoy a nice boost, but a missed earnings report or further issues surrounding Greece and the subsequent euro zone could push XLU into the dirt for Wednesday’s trading session [see also Five Compelling Long Term Trends (And ETFs To Play Them)].
Disclosure: No positions at time of writing.