For the quarter ended Sept. 30, the company reported net income of $104 million, or 54 cents per share, versus a prior-year profit of $168 million, or 89 cents per share.
Excluding charges for impaired assets, profit would have totaled $111.9 million, or 58 cents per share, compared with $135.6 million, or 72 cents per share, in the year-earlier period.
Revenue rose to $2.59 billion from $2.48 billion in the year earlier period.
Wall Street had forecast a profit of 74 cents per share, the average estimate of six analysts surveyed by Thomson Financial.
Earnings for the quarter were hurt by a 15 percent decline in cooling degree days, Pepco said. Sales were also tempered as customers conserved energy amid rising energy prices.
Shares of the company shed 6 cents to $25.28 in morning trading on the New York Stock Exchange.
