Constellation Energy Corp (CEG) Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 delivered strong top line and operations, with Operating Revenues of $6.79B and nuclear capacity factor of 94.1%; Adjusted Operating EPS was $2.14 while GAAP EPS was $0.38 .
• Versus S&P Global consensus, Adjusted EPS modestly missed ($2.14 vs $2.21*), Revenue significantly beat ($6.79B vs $5.44B*), and EBITDA missed ($1.08B* actual vs $1.26B* estimate); management reaffirmed full-year Adjusted EPS guidance of $8.90–$9.60 .
• Management highlighted accelerating data-center demand, on-grid sales momentum, and PJM fast-track interconnection for Crane and >1,150 MW of nuclear uprates as near-term catalysts; Calpine acquisition remains on track to close by year-end .
• Strategic tone: confidence in durable value from clean, firm power, inflation-linked nuclear PTC floor, and pending long-term customer agreements; buyback capacity remains, though activity can be constrained by MNPI .

What Went Well and What Went Wrong

What Went Well

• Reaffirmed FY2025 Adjusted EPS guidance ($8.90–$9.60), underscoring confidence in commercial performance, nuclear PTC framework, and pipeline of customer deals .
• Operational execution: nuclear capacity factor at 94.1%, 0 non‑refueling outage days, 99.2% dispatch match, and 96.2% renewable capture—best-in-class fleet performance .
• PJM selected Crane Clean Energy Center and additional uprates (>1,150 MW) for expedited interconnection; management sees Crane staffing, operator training, and interconnect timelines on track or better .

Quotes:

• “We delivered Adjusted (non-GAAP) Operating Earnings of $2.14 per share… Our generation fleet performed well… nuclear plants achieving a 94.1% capacity factor” – CFO Dan Eggers .
• “On-grid sales are increasingly attractive… we could achieve fair pricing at levels consistent with our owner expectations” – CEO Joe Dominguez .

What Went Wrong

• Adjusted EPS modestly below consensus; EBITDA below consensus as quarterly PTC recognition swung to zero given higher forward prices, creating YoY comparability noise despite favorable full-year setup *.
• GAAP EPS fell sharply YoY ($0.38 vs $2.78), reflecting fair value marks and decommissioning-related items; Adjusted EPS grew ($2.14 vs $1.82) but non-GAAP uplift did not fully offset consensus expectations .
• Macro/tariffs create minor cost headwinds; management estimates negligible O&M impact and ~1–2% CapEx impact including fuel in 2025–2026 .

Financial Results

Note: Values with * retrieved from S&P Global.

Vs Estimates (S&P Global):

Note: Values with * retrieved from S&P Global.

KPIs:

Operational Volumes – Nuclear by Region (GWh):

Guidance Changes

PTC Inflation Commentary: Management estimates the 2025 nuclear PTC inflation adjustment at ~2.3%–2.6%, implying an earlier price step-up and ~$500M incremental base revenue in 2028 (illustrative) .

Earnings Call Themes & Trends

Management Commentary

• “Nuclear simply wins the match in every single dimension… predictability of firm prices for 20 years… speed to execution, sustainability, resilience” – CEO Joe Dominguez .
• “We earned $0.38 GAAP and $2.14 adjusted… locked in margins that exceed our 10-year average… reaffirming full-year operating EPS guidance” – CFO Dan Eggers .
• “PJM announced more than 1,150 new nuclear megawatts, including Crane… chosen for accelerated interconnection… we will meet and potentially beat our targets” – CFO Dan Eggers .
• “We have about $1 billion left in our buyback authorization… look forward to resuming our buyback program at compelling stock price levels” – CEO Joe Dominguez .

Q&A Highlights

• Structure and timing: Near-term focus on on-grid contracts; BTM remains attractive for very large training loads pending FERC clarity; settlement or rulemaking could resolve within “handful of months” .
• Pricing and pass-throughs: Management declined to disclose specific price points; affirmed wire/transmission charges are borne by customers, not CEG .
• IRA transferability: Minimal impact expected given tax capacity post-Calpine; may buy credits at a discount if available .
• Interconnection studies: Utilities accelerating; some studies completing in ~6–7 months; process improving across PJM utilities .
• Affordability and power prices: Emphasis on tools (DR, backup generation optimization) to manage peaks and capacity market pressures; avoid unnecessary new builds .

Estimates Context

• Adjusted EPS: $2.14 actual vs $2.21* consensus (miss), with 10 EPS estimates contributing to consensus .
• Revenue: $6.79B actual vs $5.44B* consensus (beat), based on 3 revenue estimates; reflects strong commercial optimization and higher ZEC/CMC prices .
• EBITDA: $1.08B* actual vs $1.26B* consensus (miss); quarterly PTC booking dynamics (zero booked in Q1 as forwards above floor) create comparability noise but favorable full-year outlook *.

Note: Values with * retrieved from S&P Global.

Key Takeaways for Investors

• Revenue strength and fleet performance offset quarterly PTC booking dynamics; full-year Adjusted EPS guidance maintained, suggesting confidence in backlog and margins .
• Expect near-term catalysts: announcement of long-term customer agreements, further PJM interconnection progress (Crane/uprates), and Calpine closing by year-end .
• On-grid sales are gaining traction and can achieve “fair pricing”; BTM remains an option for very large loads post-FERC clarity—monitor rulemaking and settlement process .
• Nuclear PTC inflation adjustment provides embedded price floor uplift and earnings visibility; management estimates 2025 adjustment at ~2.3%–2.6% .
• Buyback optionality (~$1B authorization) offers potential downside support, subject to MNPI constraints; watch for resumption post-announcements .
• Tariff impacts: negligible O&M and ~1–2% CapEx headwind through 2026—manageable within guidance .
• Trading implications: Revenue beat vs EPS/EBITDA miss could drive mixed near-term reaction; focus on policy clarity, contract signings, and Calpine accretion as primary re-rating drivers .