BALTIMORE–(BUSINESS WIRE)–Constellation Energy Corporation (Nasdaq: CEG) today reported its financial results for the first quarter of 2024.
“We had another strong quarter as support grows for nuclear energy as a reliable, clean source to meet growing demand from electric vehicles, heavy industry and emerging technologies, such as AI and related digital infrastructure,” said Joe Dominguez, president and CEO, Constellation. “We’re also adding more firm clean energy to the grid by extending the lives of our nuclear plants, increasing their output and exploring opportunities to locate next generation nuclear reactors at our sites. The largest and most critical industries in America are coming to us to power their businesses with clean energy in every hour of every day, providing opportunities for sustainable growth as we lead the nation’s transition to a clean-energy economy.”
“Higher output from our generation fleet, supportive energy policies and the strong performance of our commercial business contributed to our strong adjusted (non-GAAP) first-quarter earnings of $1.82 per share,” said Dan Eggers, chief financial officer, Constellation. “Credit ratings firm Moody’s Investment Services recognized our financial performance by upgrading our credit rating to Baa1 and we issued the nation’s first-ever corporate green bond that includes nuclear. Delivering on our capital allocation priorities, the board expanded our share repurchase authorization by $1 billion, reinforcing confidence in Constellation’s outlook. We are also reaffirming our full-year adjusted (non-GAAP) earnings guidance of $7.23 to $8.03 per share.”
First Quarter 2024
Our GAAP Net Income for the first quarter of 2024 increased to $2.78 per share from $0.29 per share in the first quarter of 2023. Adjusted (non-GAAP) Operating Earnings for the first quarter of 2024 increased to $1.82 per share from $0.78 per share in the first quarter of 2023. For the reconciliations of GAAP Net Income (Loss) to Adjusted (non-GAAP) Operating Earnings, refer to the tables beginning on page 3.
Adjusted (non-GAAP) Operating Earnings in the first quarter of 2024 primarily reflects:
- Favorable net market and portfolio conditions, nuclear PTCs, and impacts of nuclear outages; partially offset by unfavorable ZEC and CMC revenues and labor, contracting, and materials.
Recent Developments and First Quarter Highlights
- Delivering on Our Capital Allocation Promises: In the first quarter of 2024 we continued to deliver on our commitment to return value to shareholders through our share repurchase program and maintenance of a strong credit rating. We repurchased nearly 3 million shares and deployed approximately $500 million during the quarter, bringing our cumulative repurchases in excess of $1.5 billion since the program’s commencement. In addition, our Board of Directors authorized an additional $1 billion authority to repurchase shares under our previously announced program. Our credit rating has been upgraded by Moody’s Investor Services (“Moody’s”) to Baa1 from Baa2 and assigned a stable outlook based on the company’s improved debt coverage metrics and strong financial performance driven by climate policies that recognize the value of nuclear as a reliable clean energy resource. The upgrade by Moody’s follows two similar upgrades by ratings firm S&P Global Ratings since 2022.
- Nation’s First Corporate Green Bond Including Nuclear: We issued a $900 million, 30-year term green bond to be used to finance green projects such as nuclear uprates that will increase production of clean, carbon-free energy at our clean energy centers. Proceeds may also be used to advance other technologies, including the production of clean hydrogen, energy storage systems, wind repowering and carbon-free energy solutions for our commercial customers. The green bond financing is the Nation’s first of its kind to include nuclear energy in its use of funds.
- Nuclear Operations: Our nuclear fleet, including our owned output from the Salem and South Texas Project (STP) Generating Stations, produced 45,391 gigawatt-hours (GWhs) in the first quarter of 2024, compared with 42,463 GWhs in the first quarter of 2023. Excluding Salem and STP, our nuclear plants at ownership achieved a 93.3% capacity factor for the first quarter of 2024, compared with 92.8% for the first quarter of 2023. There were 78 planned refueling outage days in the first quarter of 2024 and 86 in the first quarter of 2023 for sites we operate. There were 10 non-refueling outage days in the first quarter of 2024 and 9 in the first quarter of 2023 for sites we operate.
- Natural Gas, Oil, and Renewables Operations: The dispatch match rate for our fleet was 97.9% in the first quarter of 2024, compared with 98.4% in the first quarter of 2023. Renewable energy capture for our fleet was 96.3% in the first quarter of 2024, compared with 96.6% in the first quarter of 2023.
GAAP/Adjusted (non-GAAP) Operating Earnings Reconciliation
Unless otherwise noted, the income tax impact of each reconciling adjustment between GAAP Net Income (Loss) Attributable to Common Shareholders and Adjusted (non-GAAP) Operating Earnings is based on the marginal statutory federal and state income tax rates, taking into account whether the income or expense item is taxable or deductible, respectively, in whole or in part. For all adjustments except the NDT fund investment returns, which are included in decommissioning-related activities, the marginal statutory income tax rate was 25.1% for both the three months ended March 31, 2024 and 2023. Under IRS regulations, NDT fund investment returns are taxed at different rates for investments if they are in qualified or non-qualified funds. The effective tax rates for the unrealized gains and losses related to NDT funds were 54.8% and 129.2% for the three months ended March 31, 2024 and 2023, respectively. Adjusted (non-GAAP) Operating Earnings for the first quarter of 2024 and 2023, respectively, does not include the following items (after tax) that were included in our reported GAAP Net Income (Loss):
|
(in millions, except per share data) |
|
Three Months Ended March 31, 2024 |
|
Earnings Per Share(1) |
||||
|
GAAP Net Income (Loss) Attributable to Common Shareholders |
|
$ |
883 |
|
|
$ |
2.78 |
|
|
Unrealized (Gain) Loss on Fair Value Adjustments (net of taxes of $57) |
|
|
(170 |
) |
|
|
(0.53 |
) |
|
Plant Retirements and Divestitures (net of taxes of $4) |
|
|
12 |
|
|
|
0.04 |
|
|
Decommissioning-Related Activities (net of taxes of $139) |
|
|
(67 |
) |
|
|
(0.21 |
) |
|
Pension & OPEB Non-Service (Credits) Costs (net of taxes of $1) |
|
|
2 |
|
|
|
0.01 |
|
|
Separation Costs (net of taxes of $2) |
|
|
5 |
|
|
|
0.02 |
|
|
ERP System Implementation Costs (net of taxes of $1) |
|
|
4 |
|
|
|
0.01 |
|
|
Income Tax-Related Adjustments |
|
|
(88 |
) |
|
|
(0.28 |
) |
|
Noncontrolling Interests (net of taxes of $—) |
|
|
(2 |
) |
|
|
(0.01 |
) |
|
Adjusted (non-GAAP) Operating Earnings |
|
$ |
579 |
|
|
$ |
1.82 |
|
|
(in millions, except per share data) |
|
Three Months Ended March 31, 2023 |
|
Earnings Per Share(1) |
||||
|
GAAP Net Income (Loss) Attributable to Common Shareholders |
|
$ |
96 |
|
|
$ |
0.29 |
|
|
Unrealized (Gain) Loss on Fair Value Adjustments (net of taxes of $76) |
|
|
227 |
|
|
|
0.69 |
|
|
Plant Retirements and Divestitures (net of taxes of $6) |
|
|
(19 |
) |
|
|
(0.06 |
) |
|
Decommissioning-Related Activities (net of taxes of $117) |
|
|
(74 |
) |
|
|
(0.23 |
) |
|
Pension & OPEB Non-Service (Credits) Costs (net of taxes of $3) |
|
|
(10 |
) |
|
|
(0.03 |
) |
|
Separation Costs (net of taxes of $8) |
|
|
23 |
|
|
|
0.07 |
|
|
ERP System Implementation Costs (net of taxes of $1) |
|
|
2 |
|
|
|
0.01 |
|
|
Change in Environmental Liabilities (net of taxes of $4) |
|
|
12 |
|
|
|
0.04 |
|
|
Noncontrolling Interests (net of taxes of $—) |
|
|
(1 |
) |
|
|
— |
|
|
Adjusted (non-GAAP) Operating Earnings |
|
$ |
256 |
|
|
$ |
0.78 |
|
|
|
|
|
|
|
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|
_______ |
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|
(1) Amounts may not sum due to rounding. Earnings per share amount is based on average diluted common shares outstanding of 318 million and 328 million for the three months ended March 31, 2024 and 2023, respectively. |
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About Constellation
A Fortune 200 company headquartered in Baltimore, Constellation Energy Corporation (Nasdaq: CEG) is the Nation’s largest producer of clean, carbon-free energy and a leading supplier of energy products and services to businesses, homes, community aggregations and public sector customers across the continental United States, including three fourths of Fortune 100 companies. With annual output that is nearly 90% carbon-free, our hydro, wind and solar facilities paired with the nation’s largest nuclear fleet have the generating capacity to power the equivalent of more than 16 million average homes, providing about 10% of the nation’s clean energy. We are further accelerating the nation’s transition to a carbon-free future by helping our customers reach their sustainability goals, setting our own ambitious goal of achieving 100% carbon-free generation by 2040, and by investing in promising emerging technologies to eliminate carbon emissions across all sectors of the economy. Follow Constellation on LinkedIn and Twitter.
