Constellation Energy Q3: Earnings Beat, Revised FY24 EPS Guidance & More

Constellation Energy Corporation CEG shares are trading lower after the company reported third-quarter results and revised its FY24 adjusted EPS guidance, which is below estimates.

Also, in the company’s conference call, Constellation Energy’s CEO said the U.S. regulator’s ruling on the Amazon data center agreement was not the final word. On Friday, the Federal Energy Regulatory Commission (FERC) rejected the amended Susquehanna Interconnection Service Agreement between PJM Interconnection, PPL Electric Utilities, and Talen Energy.

Sales of $6.550 billion surpassed the consensus of $5.714 billion. Adjusted EPS of $2.74 exceeded the consensus of $2.64.

The result reflects favorable results from the nuclear PTC portfolio and positive net market and portfolio conditions. These gains were partially offset by higher labor costs (including incentives), increased contracting and material expenses, and the impact of nuclear outages in 2024 compared to 2023.

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“The importance of AI and the data economy to America’s economic competitiveness and national security can’t be overstated, and Constellation will do our part to meet the moment. Our customers are looking for clean, emissions-free energy that they can rely on in every hour of every day, and nothing exemplifies that imperative more than our 20-year agreement with Microsoft to restart the Crane Clean Energy Center,” said Joe Dominguez, president and CEO, Constellation. 

Outlook: For FY24, the company revised the adjusted operating EPS guidance to $8.00 – $8.40 (vs. $8.43 estimate) from $7.60 – $8.40.

In the quarter, the company signed a 20-year power purchase agreement with Microsoft. The deal entails the launch of the Crane Clean Energy Center (CCEC) and the restart of Three Mile Island Unit 1, which was closed five years ago.

“Our generation fleet performed exceptionally well during the quarter, and we are on track to beat our average refueling outage duration by more than 2 days which is more than 50% below the industry average,” stated chief financial officer Dan Eggers.

Investors can gain exposure to the stock via Strive Natural Resources and Security ETF FTWO and Virtus Reaves Utilities ETF UTES.

Price Action: CEG shares are down 10.4% at $231.22 at the last check Monday.

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