Exelon (EXC) Q3 2026 earnings: PECO profit falls 33%, Pepco Maryland order cuts request

Exelon (EXC) Q3 2026 earnings, reported on October 30, 2026 in an 8-K earnings release, the 10-Q and the earnings call, came in ahead of the level the company had signaled, but the utility's ability to recover its investment in Pennsylvania and Maryland proved weaker than previously assumed [1][2][3]. The questions going into the quarter were whether PECO could hold its profit after withdrawing its rate case, whether new Maryland rates could catch up with costs, and whether ComEd's profit growth could outrun the cost of funding its capital plan. PECO's profit fell sharply, Pepco's Maryland rate order came in far below the request, and ComEd kept growing. As a result, group growth now depends more heavily on Illinois.

Exelon is one of the largest pure transmission-and-distribution utility holding companies in the US. Its six regulated utilities deliver electricity and natural gas to about 11 million customers [4]. The company owns no power plants and earns money on "rate base × allowed return": the size of the grid assets regulators let it recover, multiplied by the allowed return on equity (ROE).

PECO profit fell by a third in a quarter without new rates

PECO's adjusted operating earnings were $167 million in Q3 2026, down 33% from $250 million a year earlier; nine-month earnings fell 12% [1]. The prior benchmark was a quarterly decline of no more than 10%, and this result went well past it. The company attributed the decline to storm costs, higher income taxes (partly timing), contracting costs, depreciation and interest [1].

Part of the decline reflects last year's base. In Q3 2025 PECO recognized a $53 million deferral of extraordinary storm costs; with no such deferral this year, storm-related costs rose $81 million year over year before tax [5]. Applying an approximate 28% tax rate, removing that deferral still leaves Q3 earnings down by about a fifth; this adjustment is not a company disclosure. Cooling degree-days in PECO's territory were 13.2% above normal [5], so normal weather would have produced a larger decline.

PECO's costs keep rising without rate coverage. Depreciation and interest together rose $22 million in Q3, only slightly below the roughly $25 million increase in Q2 [5]. Nine-month capital expenditures were $1.469 billion, up 10.1%, while Q3 spending alone was flat with a year earlier [6]. Management said only that PECO will file another rate case within the planning period, without giving a date [3]. Until new rates take effect, PECO will continue to weigh on group earnings.

Pepco's Maryland rate order fell far short and wrote off assets

The Maryland Public Service Commission ruled on August 28 that Pepco may raise annual revenue by $51 million, about 42% of the $120 million requested, at a 9.40% ROE versus the 10.50% requested [7]. This was Maryland's first distribution rate order since the state tightened its rules, and it missed both prior benchmarks: approval of at least half the request and an ROE of at least 9.5%.

The order also wrote off $180 million of property, plant and equipment already in service [7]. PHI recorded a $133 million after-tax GAAP loss, or $0.13 per share, which the company excluded from adjusted earnings [1]. Those assets cannot enter rates, so the loss falls on shareholders.

Previously approved rates held up quarterly earnings for now. PHI's adjusted operating earnings rose 10.3% to $320 million in Q3, halting a decline of about 9% in the first half, and BGE's rose 45% to $119 million [1]. These gains reflect older rates catching up with costs. The next test is BGE's electric case, which requests $151.2 million at a 10.40% ROE; the company expects an order in January 2027 [2].

ComEd growth supports the full-year guidance

ComEd's adjusted operating earnings rose 10.5% to $412 million in Q3, driven by a larger rate base [1]. Group adjusted EPS was $0.87, above the roughly $0.77 implied by Q3 being about 27% of the full-year midpoint, and Exelon narrowed its 2026 guidance to $2.85-$2.91 per share [1][3]. Management said the beat came mainly from weather and the timing of O&M spending, which will reverse in Q4 [3]. Consolidated interest expense rose 10.2%, above the prior 8% benchmark, so this progress does not yet amount to full confirmation [1]. The $3.4 billion equity need is unchanged, and about 37% of it has been priced [2].

Conclusion

The Q3 report lowers the assessment of Exelon's growth quality. ComEd's investment is still turning into profit, but Pennsylvania has no new rates and Maryland approved only about 40% of Pepco's request while disallowing assets, so investment in both states is converting into profit less efficiently. Nine-month operating cash flow of $5.404 billion fell short of $6.799 billion of capital spending plus $1.294 billion of dividends, with the gap funded by debt and share issuance [1]. Q3's weather and timing gains will not recur. The next evidence is when PECO files a new rate case, whether BGE's January order follows Pepco's approach, and whether ComEd's $15.3 billion 2028-2031 grid plan is largely approved in December [2]. If BGE also faces a deep cut or asset disallowance, lower returns would look more widespread.

Sources

[1] EXC 8-K filed 2026-10-30 · 3Q26 earnings release, October 30, 2026, Exelon Form 8-K earnings release, https://www.sec.gov/Archives/edgar/data/1109357/000110935726000092/exc-20261030ex991.htm

[2] EXC 8-K filed 2026-10-30 · 3Q26 earnings release attachments, October 30, 2026, Exelon Form 8-K earnings call presentation, https://www.sec.gov/Archives/edgar/data/1109357/000110935726000092/exc-20261030ex992.htm

[3] EXC Q3 2026 earnings call 2026-10-30 · transcript, October 30, 2026, Exelon Q3 2026 earnings call transcript

[4] EXC 10-K filed 2026-02-12 · six T&D utilities and service territories, February 12, 2026, Exelon Form 10-K annual report, https://www.sec.gov/Archives/edgar/data/1109357/000110935726000018/exc-20251231.htm

[5] EXC 10-Q filed 2026-10-30 · MD&A, October 30, 2026, Exelon Form 10-Q quarterly report, https://www.sec.gov/Archives/edgar/data/1109357/000110935726000095/exc-20260930.htm

[6] EXC 10-Q filed 2026-10-30 · registrant cash flow capital expenditures, October 30, 2026, Exelon Form 10-Q quarterly report, https://www.sec.gov/Archives/edgar/data/1109357/000110935726000095/exc-20260930.htm

[7] EXC 10-Q filed 2026-10-30 · Note 2 Regulatory Matters, October 30, 2026, Exelon Form 10-Q quarterly report, https://www.sec.gov/Archives/edgar/data/1109357/000110935726000095/exc-20260930.htm