01—Abstract
Summary
Summary of the 10-Q filed May 7, 2026. Cited figures are marked; the original filing is the authoritative source.
Consolidated Edison (ED) reported first-quarter 2026 net income of $924 milliona, or $2.54 per diluted share, up from $791 million, or $2.25, in the prior-year quarter.
The improvement was driven largely by a one-time $189 millionb pre-tax gain ($134 million after tax, or $0.37 per share) from the sale of its approximately 6.6% stake in Mountain Valley Pipeline. Excluding that gain, earnings were essentially flat to modestly lower: CECONY's net income fell to $733 million from $745 million, reflecting higher operations and maintenance expense and interest costs and the dilutive effect of share issuances. Operating revenues rose 6.2% to $5.095 billion, led by steam and electric revenue growth, while operating income increased 4.6% to $1.177 billion.
Balance sheet and cash flow picture is more mixed. Operating cash flow fell sharply to $174 millionc from $837 million, mainly because of a $350 million drop in net regulatory liability/deferred credit activity tied to higher recoverable energy costs and a $691 million increase in prepayments. Con Edison funded its capital program (utility capex of $1.17 billion) with a $776 million common equity offering settled from a forward sale, MVP sale proceeds of $358 million, and reduced short-term debt, including repayment of a $500 million term loan.
Cash fell to $147 million, and notes payable declined to $869 milliond. Common equity ratio improved to 50.0% from 48.6%, reflecting the equity issuance.
Key watch items for investors include aged customer receivables (CECONY balances over 60 days of $1.35 billion), the pending steam rate case requesting a $66 million increase effective November 2026, a $209 million-scale regulatory asset from the historical income tax normalization audit that remains unreserved, and a potential FERC-ordered PJM cost-allocation refund that is not yet estimable. The company also reports a new NYSPSC cybersecurity regulation effective June 2026 and no material changes to risk factors.
02—Key points
Key Highlights
- GAAP net income rose to $924M ($2.54 diluted EPS) from $791M ($2.25), but about $134M after tax ($0.37/share) came from the one-time MVP stake sale gain.
- Total operating revenues increased 6.2% to $5.095B, and operating income rose 4.6% to $1.177B, with steam revenues up 22% and electric revenues up 2.7% at CECONY.
- Operating cash flow dropped to $174M from $837M, driven by higher recoverable energy cost deferrals and a $691M increase in prepayments.
- Con Edison raised $776M through a common stock offering (7.0M shares) and received $358M from the MVP sale, which together funded utility capex of $1.17B and reduced short-term debt.
- Common equity ratio rose to 50.0% from 48.6%, and total shareholders' equity increased to $25.6B; quarterly dividend stands at $0.89 per share year-to-date.
- Aged customer receivables remain elevated at CECONY ($1.35B over 60 days), a continued drag on liquidity; a pending steam rate request of $66M is effective November 1, 2026 if approved.
- Potential upside from a FERC order on PJM transmission cost allocation that could refund CECONY, though the amount is not yet estimable; $1.03B of income tax regulatory assets remain unreserved pending NYSPSC audit outcome.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed May 7, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $5.23B$4.89B | +7.0% |
| Operating Expenses | $3.92B$3.67B | +6.7% |
| Operating Income | $1.18B$1.13B | +4.6% |
| Interest Expense | $308.00M$313.00M | −1.6% |
| Net Income | $924.00M$791.00M | +16.8% |
| EPS (Basic) | $2.55$2.26 | +12.8% |
| EPS (Diluted) | $2.54$2.25 | +12.9% |
| Shares Outstanding (Basic) | 363.00M350.10M | +3.7% |
| Shares Outstanding (Diluted) | 364.40M351.30M | +3.7% |
05—Questions
Frequently Asked Questions
How much of the earnings growth was from one-time items rather than core operations?
The $134M after-tax ($0.37/share) gain on the MVP stake sale accounts for more than the entire year-over-year increase in net income of $133M. Excluding the gain and its related accretion and transaction costs, Con Edison's earnings were roughly flat, and CECONY's earnings declined about $12M, or $0.11 per share, on higher O&M and interest expense and share dilution.
Why did operating cash flow decline so sharply, and is it a concern?
Operating cash flow fell by $663M to $174M. The main drivers were lower net regulatory liability activity (down $350M, largely due to $348M of higher recoverable energy costs, which are timing differences that should reverse), a $137M increase in prepayments, lower accounts payable, and higher unbilled revenue. Investors should monitor whether these timing effects reverse in later periods and whether aged receivables collections improve.
How is Con Edison funding its capital plan without stressing the balance sheet?
Con Edison relied on a $776M common equity issuance settled under a February 2026 forward sale, $358M of MVP sale proceeds, and cash on hand, which allowed it to repay $500M of CECONY's term loan and reduce commercial paper to $869M from $1,575M. The company's $3.5B revolving credit facility, which runs to March 2031 and has no drawn balance, provides backup liquidity. The equity-heavy funding raises per-share dilution, which is already reflected in the 0.08/share CECONY dilution figure.
What regulatory events could materially affect future results?
The pending CECONY steam rate case requests a $66M increase (with NYSDPS recommending $18M) effective November 1, 2026. The NYSPSC's audit of historical income tax normalization could require write-downs of about $1.03B of CECONY regulatory assets if the commission does not allow recovery, though management believes the assets are probable of recovery and has not accrued a liability. A FERC order on PJM cost allocation could generate refunds to CECONY that are not yet quantifiable. Weld-film investigations and an NYSDPS EV program review are also open.
Are there any notable changes in environmental or contingent liabilities?
Accrued Superfund liabilities were essentially stable at $1.08B for Con Edison and $983M for CECONY, with a potential remaining range up to $3.54B for manufactured gas plant sites, so further accruals are possible. The Manhattan explosion litigation accrual fell to $25M from $40M, offset by an equal insurance receivable. Management reports no material changes to risk factors versus the 2025 Form 10-K.
06—Continue