Constellation Energy Group Inc. (CEG) topped the Zacks Consensus Estimate of $1.06 by a wide margin of 37 cents with EPS of $1.43 in the first quarter of fiscal 2010. The company also surpassed the year-ago EPS of 74 cents by a massive margin of 69 cents. On a reported basis, including one-time items, earnings came in at 95 cents, compared with a loss of 62 cents in the first quarter of 2009.
Operational Results
Constellation Energy’s total revenues decreased 16.7% to $3.6 billion in the reported quarter from $4.3 billion in the prior-year quarter. Non-regulated revenues fell 19.1% year over year to $3.6 billion, regulated electric revenues fell 6.9% to $751.3 million and regulated gas revenues nosedived 17.5% to $317.1 million.
Constellation Energy’s net earnings were $191.3 million, compared with a net loss of $119.7 million in the first-quarter 2009. In the reported quarter, volume sales of electricity rose 0.5% year over year. Residential volume sales rose 0.6%, commercial rose 3.8% while industrial fell 2.3% compared to the prior year.
Segmental Results
Baltimore Gas and Electric Company
Baltimore Gas and Electric Company (BGE) reported adjusted earnings of 32 cents per share in the first quarter of 2010, compared with 41 cents in the year-ago quarter. The downside is largely attributable to the effects of the severe winter storms in the Mid-Atlantic region. Restoration costs related to storms in the reported quarter were approximately six cents higher than the year-ago period.
Generation
The Generation segment reported adjusted earnings of 57 cents per share, compared with adjusted earnings of 48 cents in the first quarter of 2009.
NewEnergy
The NewEnergy segment reported adjusted earnings of 54 cents per share, compared with an adjusted loss of 15 cents per share for the first quarter of 2009. This favorable year-over-year quarterly variance is primarily driven by costs related to de-risking business in 2009 and improved margins realized in retail power operation during 2010.
Financial Condition
Constellation Energy reported $1.9 billion of cash and cash equivalents at the end of the first quarter 2010, compared to $3.4 billion at fiscal-end 2009. Long-term debt fell to $3.8 billion, compared to $4.4 billion at fiscal-end 2009.
Outlook
Constellation Energy expects its fiscal 2010 earnings in the range of $3.05 – $3.45, in line with the Zacks Consensus Estimate of $3.25.
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