Constellation Energy exceeds profit expectations on robust power demand

Constellation Energy, a major U.S. energy company, beat Wall Street expectations for the second-quarter adjusted profits on Thursday. This was due to rising demand from data centres and lower interest costs.

Constellation and other independent power companies have benefitted from the record-high electricity demand. This is further fueled by the expansion of Big Tech’s energy-intensive, data center.

Constellation signed several long-term agreements with giant technology companies for their data centers, including one with Meta, and another with Microsoft, which will reopen the former Three Mile Island nuclear plant in Pennsylvania.

Constellation CEO Joe Dominguez stated on a recent earnings call that the company has been in talks with datacenter developers about similar deals.

Dominguez stated that "we're continuing to see an increase in interest."

Constellation is expanding its fleet of natural gas-fired plants. It is the largest operator of nuclear power in the United States.

Constellation has agreed to purchase a natural gas and geothermal energy company in January.

Calpine

For $16.4 billion, this acquisition marks one of the largest in U.S. energy industry history.

The deal has received

Approvals

Calpine Corporation has received approval from the Federal Energy Regulatory Commission and states for its $16.4 billion acquisition announced previously.

The Department of Justice must approve the project.

"I hope we'll get the last one soon," Dominguez said.

Constellation’s total operating costs rose 17.7%, to $5.15 Billion in the April-June period. This compares with $4.38 Billion a year ago.

Nuclear fleet of the company produced 45,170 GWh, down from 453,14 GWh a yea ago. This is due to more days without refueling compared to last yea.

Constellation Energy expects continued bipartisan support for nuclear power.

In May, U.S. president Donald Trump signed executive orders directing that the independent Nuclear Regulatory Commission of the United States reduce regulations and expedite new licenses for power plants and reactors.

Constellation Energy announced total quarterly operating revenues of $6.10 Billion, an increase from $5.48 Billion a year ago. According to LSEG data, analysts had on average expected $4.83billion.

Interest expenses dropped to $118 Million from $142 Million.

Baltimore-based utility Baltimore posted an adjusted profit per share of $1.91 for the three months ending June 30 compared to analysts' average estimates of $1.85. (Reporting from Bengaluru by Pooja menon and Laila kearney; editing by Shailesh kuber and Shinjini ganguli).

(source: Reuters)