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CEG
Constellation Energy
Earnings
CEG | Earnings Review
Constellation Energy Corporation | FY2026Q1 reported May 11, 2026 | Analysis date: May 22, 2026 | Daloopa company_id 146387
Adj EPS Beat
+7.7%
$2.74 vs $2.55 Street; +28% YoY (+$0.60 vs $2.14 Q1'25); driven by ~$2/yr Calpine accretion + higher PJM capacity prices
Revenue (post-Calpine)
$11.1B
+64% YoY — first quarter consolidating Calpine. Total supply/sales 93.3 TWh (+36% YoY).
FY26 Guide
$11–$12 EPS
Reaffirmed from March 31 business update; ~$2/share full-year Calpine accretion baked in
Long-term Outlook
>20% / 10%+
Base EPS growth >20% through 2029; long-term rolling target 10%+; 2028-29 FCF before growth $11.5–$13B
CEG's first quarter as a combined Constellation-Calpine business delivered a clean beat: adjusted operating EPS of $2.74 exceeded consensus of $2.55 by 7.7% and was +$0.60 vs Q1'25 ($2.14). Mgmt attributed the YoY lift to (a) ~$2/share full-year accretion from Calpine (Q1 is the first partial quarter), (b) higher PJM capacity prices, and (c) lower SBC — partially offset by more planned nuclear refueling outage days (capacity factor 92.3% vs 94.1% Q1'25), lower ZEC pricing, and incremental ancillary charges from Winter Storm Fern. Revenue of $11.1B (+64% YoY) reflects Calpine consolidation. Net income attributable to common shareholders was $1.59B (+$1.47B YoY off a depressed Q1'25 base of $118M). Operationally, the nuclear fleet generated 44,666 GWh with the CCGT/cogen fleet adding 23M MWh (47.1% capacity factor; 5.1% forced outage). Mgmt reaffirmed the $11-$12 FY26 adjusted operating EPS guide, repurchased 1.2M shares at $285 avg ($335M), placed 105MW Pastoria solar and 460MW Pin Oak Creek gas peaker into service, and received PUCT approval for the CyrusOne net-metering agreement at Freestone. Long-term: base EPS growth >20% through 2029, 2026-27 FCF before growth $8.4B, 2028-29 FCF $11.5-$13B.
Key Metrics Trends
| Metric | Q1'24 | Q2'24 | Q3'24 | Q4'24 | Q1'25 | Q2'25 | Q3'25 | Q4'25 | Q1'26 |
|---|---|---|---|---|---|---|---|---|---|
| Total operating revenues ($M) | $6.2B | $5.5B | $6.5B | $5.4B | $6.8B | $6.1B | $6.6B | $6.1B | $11.1B |
| Total operating revenues ($M) YoY % | - | - | - | - | +10.2% | +11.4% | +0.3% | +12.9% | +63.8% |
| Adj Operating EPS | $1.82 | $1.68 | $2.74 | $2.44 | $2.14 | $1.91 | $3.04 | $2.30 | $2.74 |
| Adj Operating EPS YoY % | - | - | - | - | +17.6% | +13.7% | +10.9% | -5.7% | +28.0% |
| Net income attributable to common ($M) | $883M | $814M | $1.2B | $852M | $118M | $839M | $930M | $432M | $1.6B |
| Net income attributable to common ($M) YoY % | - | - | - | - | -86.6% | +3.1% | -22.5% | -49.3% | +1247.5% |
| Total nuclear generation (GWh) | 45,391.0 | 45,314.0 | 45,510.0 | 45,494.0 | 45,582.0 | 45,170.0 | 46,477.0 | 45,459.0 | 44,666.0 |
| Total nuclear generation (GWh) YoY % | - | - | - | - | +0.4% | -0.3% | +2.1% | -0.1% | -2.0% |
| Nuclear capacity factor | 93.3% | 95.4% | 95.0% | 94.8% | 94.1% | 94.8% | 96.8% | 93.1% | 92.3% |
| Natural Gas/Oil/Renewables (GWh) | 8,274.0 | 6,105.0 | 7,113.0 | 5,234.0 | 5,905.0 | 5,560.0 | 6,174.0 | 4,614.0 | 32,061.0 |
| Natural Gas/Oil/Renewables (GWh) YoY % | - | - | - | - | -28.6% | -8.9% | -13.2% | -11.8% | +442.9% |
| Total supply/sales (GWh) | 68,407.0 | 65,663.0 | 70,336.0 | 65,015.0 | 68,422.0 | 65,641.0 | 70,635.0 | 64,242.0 | 93,330.0 |
| Total supply/sales (GWh) YoY % | - | - | - | - | +0.0% | -0.0% | +0.4% | -1.2% | +36.4% |
Q1'26 is the inflection: CEG transitions from a stand-alone nuclear-heavy generator into a diversified power platform (nuclear + Calpine's gas + retail). The acquisition mechanically lifts revenue and gas-fleet GWh (8.3 TWh prior-year Q1 → 32.1 TWh this quarter) while the nuclear engine remains the cash-flow anchor. Underlying earnings power is accelerating: even excluding Calpine accretion, higher PJM capacity prices, lower SBC, and continued data-center contracting (Crane / Three Mile Island restart, CyrusOne Freestone, ongoing hyperscaler dialogues) are creating an asymmetric setup vs the $11-12 FY26 guide. Watch items: nuclear capacity factor trending down (95.4% Q2'24 → 92.3% Q1'26 due to planned refueling), PJM market design uncertainty (FERC/PJM whitepaper in flight), ERCOT forward curve weakness, and Calpine shareholder lockup expiration June 30, 2026 (25M shares).
Beat/Miss
Guidance
Catalysts
Street Q&A
Contradictions
Read-Throughs
This Quarter vs Consensus
| Metric | Consensus | Actual | Variance | Beat/Miss |
|---|---|---|---|---|
| Revenue | $8,458M Street (pre-Calpine close fully baked) | $11,122M | +$2,664M / +31.5% | Beat — Calpine timing/inclusion drove most of variance |
| Adj Operating EPS | $2.545 Street | $2.74 | +$0.195 / +7.7% | Beat |
| GAAP EPS | n/a | $4.49 | Mark-to-market and acquisition gains | Beat |
| Nuclear capacity factor | ~94% (prior-year level) | 92.3% | -180bps vs PY (planned refueling) | Miss vs PY — guided |
| Net income attrib. to common | n/a | $1,590M | +$1,472M YoY (Q1'25 had $118M from one-time items) | Beat |
Pattern: Modest EPS beater (avg +5% vs cons over L8Q) with occasional outright beats when nuclear fleet outperforms. Recent magnitudes: Q1'26 +7.7%, Q4'25 +2%, Q3'25 -2%, Q2'25 +4%, Q1'25 -2%, Q4'24 +13%, Q3'24 +3%, Q2'24 -2%, Q1'24 +40%. The two biggest beats (Q1'24, Q4'24) came from one-time items or above-plan nuclear performance. Q1'26 beat is structural (Calpine accretion + higher PJM capacity prices), making it more durable than a typical operating beat. L8Q EPS beat rate ~63%.
Guidance Deep Dive
| Metric | Prior Guide (Mar 31) | New Guide (May 11) | Consensus | Signal |
|---|---|---|---|---|
| FY26 Adj Operating EPS | $11.00–$12.00 (mid $11.50) | Reaffirmed $11.00–$12.00 | ~$11.68 (sum of quarterly consensus) | Consensus already above mid; affirming guide preserves H2 upside optionality |
| FY26 Calpine accretion | ~$2/share full year | Tracking to ~$2/share | n/a | Q1 partial-quarter contribution implies on-track |
| FY26 capital allocation | $5B buyback authorized; ~$0.50/sh annual organic investment | 1.2M shares bought at $285 = $335M in window | n/a | Buyback skewed early due to compelling price; signals confidence |
| Long-term base EPS growth | >20% CAGR through 2029 | Reaffirmed >20% through 2029; 10%+ rolling forward | Consensus building in 15–18% LT | Upside vs consensus on LT growth |
| 2026-27 FCF before growth | $8.4B (March update) | $8.4B (reaffirmed) | n/a | Translates to ~$5.4B EBITDA/yr at current mix |
| 2028-29 FCF before growth | n/a | $11.5B–$13B (new disclosure) | n/a | Demonstrates step-function on PTC + capacity prices + data-center offtakes |
| Nuclear capacity factor (FY26) | Implied ~94% | On track despite Q1 dip (planned outages) | 94%+ | No change — Q1 dip was scheduled refueling |
**Tone: Confident, slightly defensive on near-term setup, very bullish on LT.** Joe Dominguez framed the call as "relatively brief" because Mgmt had already delivered a deep business update on March 31. Three pillars: (1) FY26 guide is intact — they would not raise this early because "we like to have at least another quarter" of visibility, but the Q1 print was in line with internal plan; (2) >20% base EPS growth through 2029 is anchored by nuclear PTC (inflation-linked), data-center long-term offtakes, and growing customer margins (~275M MWh + 800 Bcf book serving 80% of Fortune 100); (3) capital return is a priority — bought $335M of stock at $285 in a narrow window, viewing the price as "a compelling use of cash." Tone on PJM/FERC was constructively measured — encouraged by PJM whitepaper on market design but acknowledged ongoing regulatory uncertainty. Source: CEG Q1 2026 transcript (May 11, 2026).
Upcoming Catalysts
| Catalyst | Timing | Consensus / Watch | Implication |
|---|---|---|---|
| Crane Clean Energy Center restart (MSFT PPA) | Earlier than 2031 capacity credit date | Mgmt: "it will come on sooner" — full capacity credit milestone is 2031 but plant starts before | Materially positive — adds nuclear MWh + 20-yr MSFT contract |
| Additional hyperscaler data-center PPAs | FY26-27 | Dominguez: "Nothing is stopping us from moving forward on a deal now" despite FERC/PJM process | Each long-dated PPA at premium pricing is +EPS accretive |
| Calpine shareholder lockup #1 | June 30, 2026 | 25M of 50M Calpine-issued shares unlock; further 25M Dec 30, 2026 | Potential supply overhang — mgmt unconcerned, sees underlying demand |
| PJM market design / FERC actions | Mid–H2 2026 | PJM whitepaper "Powering Reliability" out last week; FERC response on Crane waiver expected June/July | Constructive market reforms could lift capacity revenues across fleet |
| Nuclear uprates (Byron + Braidwood) | Capex spent; EPS accretion 2030+ | In plan but not in 2029 base | Free option on top of >20% base growth |
| New gen project commercialization | Throughout FY26 | Pastoria 105MW solar + Pin Oak Creek 460MW gas peaker came online in Q1 | Demonstrates ability to execute post-Calpine — supports >20% growth thesis |
| PUCT-approved CyrusOne (Freestone) | Approved Q1'26 | Powered Land deal; net-metering structure | Template for additional Texas data-center deals |
| ERCOT forward curve recovery | 2028-29 | Forwards weak near-term; mgmt focused on '28-'29+ when curve thickens | Latent upside for Calpine gas fleet |
Street Q&A
| Analyst (firm) | Question | Management response | Assessment |
|---|---|---|---|
| David Arcaro (Morgan Stanley) | Weakness in ERCOT forwards despite strong demand growth — interpretation? | Dominguez/Novotny: Issue is timing — market is undervalued for '28, '29 and beyond. Near-term forwards reflect summer being short but the curve thickens out further. Don't read the spot weakness as a structural call. | Well answered |
| Steve Fleishman (Wolfe) | Crane timeline updates? And views on Calpine holder lockup expiration? | Dominguez: Crane will come online sooner — 2031 is the full-capacity-credit date, not start date. On lockup: "Don't read anything into the early buyback" — the 50M shares unlock in two 25M tranches (June 30 and Dec 30, 2026). Shane added context. | Well answered |
| Shar Pourreza (Wells Fargo) | Hyperscaler conversations status given FERC/PJM uncertainty? | Dominguez: "Nothing is stopping us from moving forward on a deal now." Clients interested in moving in parallel with the regulatory process. Capital allocation question (Shane): the $0.50/sh organic investment range has flexibility for nuclear and gas optionality. | Well answered |
| Nick Campanella (Barclays) | EBITDA-to-FCF conversion through 2029? New capacity resources (5GW interconnect queue)? | Shane: Cash conversion not materially different from history — nuclear fleet remains dominant cash contributor. Dominguez: 5GW figure may be higher including Calpine capacity; deployment decisions tied to demand visibility. | Well answered |
| Julien Dumoulin-Smith (Jefferies) | Which data-center deal closes first? Filing process clarity? | Dominguez (non-answer): Don't want to handicap individual sites. Calvert was mentioned earlier as positioning. Just the filing itself will provide clarity given FERC's recent direction. | Partially deflected — purposeful (deal-sensitivity) |
| Jeremy Tonet (JPMorgan) | Views on PJM "Powering Reliability Through Market Design" whitepaper? | Dardis: Appreciate PJM acknowledging need to revisit market rules; commitment to competitive markets is the right framework. Dominguez: "We've urged them to do this for a long, long time" — PJM's delays put system in the current position. | Well answered — clear advocacy stance |
| Nick Amicucci (Evercore) | Near-term nuclear uprates and 2029 EPS assumption? Why not raise FY26 guide given strong Q1? | Shane: Byron + Braidwood are in plan; capex out the door but EPS accretion is 2030+. Dominguez on raise: "at least another quarter" — March update was already late in Q1 so internal visibility was strong, but want more data before raising. | Well answered |
Contradictions
| Topic | Statement A | Statement B | Reconciliation |
|---|---|---|---|
| Buyback timing vs Calpine lockup | Mgmt: "Don't read anything into the early buyback" (re: Calpine lockup June 30) | Mgmt: "At these prices, we see our stock as a compelling use of our cash" | Both can be true: management saw value AND knows lockup is approaching. Buyback was opportunistic, not lockup-defensive. Tension is rhetorical, not factual. |
Indirect Read-Throughs
| Theme | Commentary / Mention | Read-through |
|---|---|---|
| Data center / AI demand | CEG positioning Calvert (and others) for hyperscaler PPAs; CyrusOne deal at Freestone got PUCT approval. >5GW of capacity in interconnect queue | Strong positive for nuclear-exposed power complex: VST, TLN, NRG, BEP. Confirms data-center power demand pull-through is accelerating, not slowing. |
| PJM market design | PJM 'Powering Reliability' whitepaper acknowledging market rules need revisiting; CEG advocating for scarcity pricing | Positive for IPP capacity revenue across PJM — TLN, VST. Negative for capacity-buyer utilities (EXC, FE, PPL) if reforms push capacity prices higher |
| ERCOT forwards | Mgmt: weak near-term but '28-'29 curve thickens; positioned for that timing | Mixed for ERCOT IPPs (VST, NRG) — near-term curve weakness is real, but mgmt is signaling that LT is intact |
| Nuclear PTC inflation gearing | Mgmt called out >2% inflation as positive lever (nuclear PTC scales with inflation) | Positive for all nuclear operators — EXC, VST (Comanche Peak), Calvert (CEG) |
| Microsoft (MSFT) | Crane restart for MSFT 20-yr PPA — mgmt says it will come online before the 2031 full-capacity-credit date | Positive validation of nuclear-for-AI thesis; reinforces MSFT clean-energy roadmap |
| Three Mile Island / Crane neighbors | Mgmt: similar restart conversations on other reserve sites | Latent value across the broader US nuclear retirement / restart map — read across to Vistra, Holtec restarts |
| Calpine retail platform | Now 275M MWh + 800 Bcf serving 40 states / >80% of Fortune 100 | Validates retail-as-margin-driver thesis; modest read-through to NRG, Vistra Retail businesses |
| Macro / Storm Fern | Winter Storm Fern caused incremental ancillary charges (extended-duration cold) | Modest negative for any power-marketer exposed to load obligation in PJM East — manageable, not structural |
Data sourced from Daloopa. Document search is currently in beta; transcript and filing snippets may vary.