Constellation Energy Corporation

Constellation reported 2Q GAAP earnings of $1.42 per share and adjusted operating earnings of $2.55 per share, which Shane Smith said was $0.64 higher than the second quarter last year. The year-over-year improvement was driven mainly by accretion from Calpine, higher capacity prices in PJM, and stronger commercial results, partially offset by higher planned nuclear refueling outage days and Illinois ZEC timing; Illinois bank credits were $85 million versus $200 million last year, and management said this timing item has no impact on full-year results. The nuclear fleet delivered a 93% capacity factor and 40 terawatt hours of output while completing 6 planned outages. Full-year adjusted operating earnings guidance was raised to $11.50-$12.50 per share from $11-$12 per share, and management said the midpoint is now what used to be the top end of the guide.

Joe Dominguez struck an upbeat tone, calling the quarter a "terrific update" and emphasizing strong results, higher guidance, favorable regulatory developments, and progress on strategic transactions. Strategically, he focused on Constellation’s ability to monetize its existing clean baseload fleet through long-term contracts, including about 920 MW signed in the quarter with an average duration of 18.5 years, and he said roughly 30% of clean baseload output is now under long-term agreements. He also emphasized the Crane restart, life extensions at Ginna and Nine Mile Point 1, and the broader opportunity to serve data-center and large-load customers through existing generation plus hybrid solutions.

Shane Smith highlighted that 2Q adjusted operating EPS of $2.55 was $0.64 higher year over year, driven by Calpine accretion, higher PJM capacity prices, and stronger commercial execution. He noted the offset from planned outage days and Illinois ZEC timing, including $85 million of bank credits this quarter versus $200 million last year, and said this timing is already reflected in 2026 guidance. He also pointed to financial strength and investment-grade credit ratings, said Constellation returned just under $2 billion through share repurchases since the first quarter call, and that about $2.2 billion has been deployed in buybacks over the past four months, with $2.8 billion of authorization remaining. He added that the Brazos Valley Energy Center sale for $860 million, or about $1,420 per kilowatt, will help satisfy remaining DOJ divestiture obligations tied to Calpine, and he updated the 2030 PTC strike price assumption from $49.88 to $50.88 per megawatt hour, which increases 2030 base earnings by about $0.30 per share.

Analysts focused on the new long-term nuclear contracts, PJM’s bilateral and RBP processes, and whether the deals depend on future regulatory outcomes. Management said the contracts are already signed and are not dependent on FERC or PJM decisions, but they do fit within the evolving framework for large-load contracting and co-location. Questions also covered ERCOT/Batch Zero and Texas power prices; management said the market weakness was expected, that battery storage is arriving before load, and that they expect the market to tighten as data centers come online. On Illinois, management said the state is still working through an IRP and procurement plan, but no separate negotiation is underway with the state.