Consolidated Edison’s Financial Snapshot: Revenue Growth vs. Net Income Decline#
Consolidated Edison, Inc. (ED closed 2024 with a 4.04% revenue growth, reaching $15.26 billion, marking a steady increase compared to the previous year’s $14.66 billion. Despite this top-line improvement, the company reported a notable -27.75% decline in net income, down to $1.82 billion from $2.52 billion in 2023. This divergence signals operational pressures and strategic capital allocation impacting profitability.
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The operating income also declined from $3.2 billion in 2023 to $2.67 billion in 2024, representing an operating margin compression from 21.8% to 17.5%. Gross profit margin, however, improved to 53.53% from 50.5%, suggesting some efficiency gains or favorable cost management in core revenue-generating activities. These mixed signals indicate a complex interplay between revenue growth and cost pressures.
Capital Expenditure and Cash Flow Dynamics: Investing for Future Resilience#
A standout element in Consolidated Edison’s 2024 financials is the sharp rise in net cash used for investing activities, which ballooned to -$5.27 billion, compared to -$1 billion in 2023. This surge reflects aggressive investment in property, plant, and equipment, which increased from $50.14 billion to $52.66 billion in net PPE assets.
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Despite generating $3.61 billion in net cash from operations—a healthy 67.63% increase year-over-year—the company’s free cash flow turned negative to -$1.16 billion, impacted by the heavy capital expenditure outlays. These investments align with Con Edison’s ongoing infrastructure upgrades and strategic initiatives focused on resilience and modernization in the utility sector.
Debt and Liquidity Position: Managing Leverage Amid Expansion#
Consolidated Edison’s total debt increased from $25.01 billion in 2023 to $27.82 billion in 2024, with long-term debt rising to $25.04 billion. Correspondingly, net debt rose to $26.5 billion. The debt-to-equity ratio stands at approximately 1.27x, reflecting moderate leverage consistent with capital-intensive utilities.
Liquidity remains solid with cash and cash equivalents slightly improving to $1.32 billion. The current ratio is stable at 1.28x, indicating adequate short-term asset coverage over liabilities. The company’s net debt to EBITDA ratio of 4.57x is in line with sector expectations, suggesting manageable financial risk given the steady operating cash flows.
Dividend Stability and Yield: A Core Attraction for Income Investors#
Consolidated Edison continues to maintain its dividend policy, with the most recent dividend per share at $3.36 annually, reflecting a 58.59% payout ratio of earnings. The dividend yield stands at a robust 3.21%, appealing to income-focused investors in the utility sector.
Interestingly, the dividend growth rate over the past five years has been flat, reflecting a cautious approach to capital allocation amid heavy reinvestment phases. Quarterly dividends have been consistent at $0.85 per share, with the latest declarations maintaining investor confidence in steady income streams.
Market Valuation and Forward Outlook: Moderate P/E with Stable Future Estimates#
The stock trades at a price of $104.22, down slightly by -0.74% from the previous close. The current trailing P/E ratio is approximately 19.12x, with forward P/E estimates showing a gradual decline from 19.23x in 2025 to 15.13x by 2029, reflecting expected earnings growth and margin stabilization.
Analyst consensus anticipates revenue growing at a CAGR of 3.4% through 2029, with EPS projected to increase at a 6.17% CAGR. This suggests an expectation of improving profitability as investments mature and operational efficiencies take hold.
Competitive Landscape and Sector Trends: Navigating Utility Industry Challenges#
The utility sector is undergoing transformative shifts driven by regulatory pressures, renewable energy integration, and infrastructure modernization. Consolidated Edison’s increased capital expenditure aligns with industry trends emphasizing grid resilience, decarbonization, and smart technology deployment.
The company’s investment in property and plant assets places it well among peers, but the short-term profitability pressures highlight the balance utilities must strike between growth and financial discipline. Con Edison’s dividend yield remains competitive, supporting its position as a stable income provider amid sector volatility.
What This Means for Investors: Strategic Investments and Financial Discipline#
Investors should note that Consolidated Edison’s recent financial results illustrate the classic utility trade-off: steady revenue growth coupled with near-term margin and net income pressures due to strategic investments. The company’s robust operating cash flow and manageable debt levels provide a foundation for long-term value creation.
The stable dividend policy supports income investor interest, though the flat dividend growth suggests a cautious capital allocation stance. Forward earnings growth projections indicate potential for margin recovery and improved profitability as infrastructure projects reach fruition.
Key Financial Performance Metrics Table#
| Metric | 2024 (FY) | 2023 (FY) | % Change |
|---|---|---|---|
| Revenue | $15.26B | $14.66B | +4.04% |
| Net Income | $1.82B | $2.52B | -27.75% |
| Operating Income | $2.67B | $3.20B | -16.56% |
| Gross Profit Margin | 53.53% | 50.5% | +3.03 p.p. |
| Operating Margin | 17.5% | 21.8% | -4.3 p.p. |
| Net Margin | 11.93% | 17.18% | -5.25 p.p. |
| Capital Expenditure (PPE) | - | - | Increased PPE assets from $50.14B to $52.66B |
| Net Cash from Operations | $3.61B | $2.16B | +67.63% |
| Free Cash Flow | -$1.16B | -$2.34B | +50.51% |
Forward Estimates Comparison Table#
| Year | Estimated Revenue | Estimated EPS | Forward P/E | Forward EV/EBITDA |
|---|---|---|---|---|
| 2025 | $16.11B | 5.62 | 19.23x | 11.07x |
| 2026 | $16.77B | 6.01 | 17.93x | 10.63x |
| 2027 | $17.52B | 6.35 | 17.02x | 10.18x |
| 2028 | $17.71B | 6.72 | 16.09x | 10.07x |
| 2029 | $18.42B | 7.14 | 15.13x | 9.68x |
Key Takeaways#
- Revenue growth in 2024 reflects resilience amid sector challenges, but net income contraction highlights short-term margin pressures.
- Significant capital investments underpin Con Edison’s strategic focus on infrastructure modernization and resilience.
- Operating cash flow strength and manageable leverage provide financial flexibility despite negative free cash flow.
- Dividend yield remains attractive at 3.21%, though dividend growth has paused amid reinvestment priorities.
- Forward earnings and revenue estimates suggest gradual improvement in profitability and valuation multiples over the next five years.
Conclusion#
Consolidated Edison’s latest financial results and strategic investments underscore the balancing act faced by utilities today: advancing infrastructure and sustainability goals while managing near-term financial impacts. The company’s solid operating cash flow and stable dividend policy offer a foundation for investor confidence, even as profitability metrics reflect the cost of growth. Looking ahead, improving earnings projections and a moderate valuation multiple indicate market optimism for Con Edison’s long-term positioning in the evolving energy landscape.
Investors should monitor execution on capital projects and margin recovery as key indicators of strategic success and potential valuation re-rating.
For further insights on utility sector trends and company-specific analysis, explore our detailed coverage of industry leaders and related financial concepts such as capital expenditure impact on valuation.