Exelon Corp. Thursday morning said it will slash its dividend by more than 40 percent in order to maintain an investment grade rating and free up money to "invest in growth."
Beginning in the second quarter, Exelon's divided will drop to $1.24 per share on an annualized basis from $2.10 per share. The company maintained the $2.10 dividend, among the highest of U.S. utilities, since late 2008.
Analysts predicted the move in light of stubbornly low natural gas prices that have been driving down the company's earnings and are largely responsible for the nearly two-thirds drop the company has seen in its stock price since a high in 2008.
Net income for 2012 fell to $1.16 billion, or $1.42 per share, from $2.5 billion, or $3.75 per share. In the fourth quarter, net income fell to $378 million, or 44 cents per share, from $606 million, 91 cents per share, a year earlier.
Revenue was $6.28 billion in the fourth quarter compared to $4.36 billion a year earlier. For the year, revenue rose to $23.49 billion, from $19.06 billion in 2011.
The results were within the company's guidance range.
Exelon said Thursday morning that lower prices for the energy it sells, as well as higher nuclear fuel costs, diminished earnings. Storms, including Sandy, also affected earnings at its regulated utilities in Pennsylvania and Baltimore.
The addition of Constellation Energy's contribution to its margins since the merger and favorable weather elsewhere helped to partially offset some losses, the company said.
jwernau@tribune.com | Twitter @littlewern
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Exelon cuts dividend by 41%
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Exelon cuts dividend by 41%
