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Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 10 a.m. ET Chairman, President and Chief Executive Officer - Joseph Dominguez Executive Vice President and Chief Financial Officer - Shane Smith Vice President, Investor Relations - Tim Flottemesch Operator: Good morning, ladies and gentlemen, and welcome to the Constellation Energy Corporation Second Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to introduce your host for today's call, Tim Flottemesch, Vice President, Investor Relations. You may begin. Tim Flottemesch: Thank you, Kevin. Good morning, everyone, and thank you for joining Constellation Energy Corporation's second quarter earnings conference call. Leading the call today are Joe Dominguez, Constellation's Chairman, President and Chief Executive Officer; and Shane Smith, Constellation's Chief Financial Officer. They are joined by other members of Constellation's senior management team, who will be available to answer your questions following our prepared remarks. We issued our earnings release this morning along with the presentation, all of which can be found on the Investor Relations section of Constellation's website. The earnings release and other matters, which were discussed during today's call contain forward-looking statements and estimates regarding Constellation and subsidiaries that are subject to various risks and uncertainties. Actual results could differ from our forward-looking statements based on factors and assumptions discussed in today's material and comments made on the call. Please refer to today's 8-K and Constellation's other SEC filings for discussions of risk factors and other circumstances and conditions that may cause results to differ from management's projections, forecasts and expectations. Today's presentation also includes references to adjusted operating earnings and other non-GAAP measures. Please refer to the information contained in the appendix of our presentation and our earnings release for reconciliations between non-GAAP measures and the nearest equivalent GAAP measures. I'll now turn the call over to Joe. Joseph Dominguez: Thanks, Tim. Good morning, everyone. Thanks for joining our call and for your continued interest in Constellation. We have got a terrific update for you today: strong results, an increase in guidance, positive regulatory developments and good progress on strategic transactions. But as always, we want to start off with the most important part of our business, our people. First, let me begin by recognizing Bob Wallace, who this week retired from Constellation's Board after more than 25 years of spectacular service to Constellation and its predecessors as a Board member. From Constellation's early years as a stand-alone company through our time as part of Exelon and in the years since our separation, Bob has played a critical role in helping to position the company for the long-term success we enjoy today. He is one of a kind. On behalf of all of us at Constellation, I want to thank Bob for his leadership, his guidance, his friendship and his dedicated service. We wish him all the best in retirement. Godspeed, Bob. Next, I want to thank the women and men of Constellation for delivering another strong quarter operationally and financially. During the mid-Atlantic heat wave ahead of the 4th of July holiday, our employees delivered, achieving a nuclear capacity factor above 99%, while safely managing our dispatchable generation fleet through challenging operating conditions as the new organization came together effectively. Their dedication and execution helps sustain grid reliability when our customers and communities needed it most. Constellation is a special company, and we pride ourselves in making our company a place where people want to spend their career doing important work for America. So we're especially gratified that Constellation has been named a Great Place to Work for the fourth year in a row. As you know, this certification is meaningful because the recognition can only be earned through the direct input of our people. I'm also pleased to report to you that for the first time, Constellation has been recognized as the world's top business for people with disabilities. And finally, we were extraordinarily pleased to receive the Points of Light honor as one of the nation's 50 most community-minded companies based upon the positive impact we make every day through volunteerism and investment in our communities. Now I know that some may think that these awards and recognitions are nice but maybe not quite as important as the financial and operational results that we'll talk about in just a moment. We don't see it that way. We think our values are the most important things. And when I talk in a few minutes about what it takes to restart Crane and get the overwhelming public support, which we have, and doing it in a place known for the worst moment in U.S. nuclear history, then I think you will come to understand why we believe our durable community values matter so much to our business. Now turning to the quarter and our financial results. We delivered second quarter GAAP earnings of $1.42 per share and adjusted operating earnings of $2.55 per share. Given our team's strong commercial and operational performance year-to-date, we are increasing our operational earnings guidance range by $0.50 to $11.50 to $12.50 per share. Our midpoint is now what used to be the top end of the guide, and we still have many opportunities to deliver more value this year. Shane will talk through the details in his remarks. Since our business and earnings outlook in March, we have made meaningful progress across several key focus areas, reinforcing our confidence in delivering long-term value for our owners. In March, I candidly shared that we were behind our targeted time line for completing long-term agreements due to new uncertainty in the regulatory environment. I told you that we were hopeful that PJM under FERC's oversight would move quickly to provide needed clarity so that work critical to our nation's future might proceed forward. I know that many were skeptical that reforms could be accomplished quickly and feared that the PJM process would drag on for years, something we have unfortunately seen in the past. But those concerns have not materialized. Instead, we are seeing PJM prompted by FERC move at the necessary speed. And while additional work remains for PJM to get the details right, I am pleased to report that the progress is giving customers greater confidence to evaluate long-term solutions and move forward with planning and contracting activities. Since the last call, we have signed approximately 920 megawatts of long-term nuclear deals that are consistent with our view of long-term value. These contracts have an average duration of 18.5 years and are with investment-grade customers. Now as we talked about and as I explained to you last quarter, we will continue to follow our customers' lead on how and when their agreements are disclosed so that they may protect their procurement strategies. Turning to Crane. Important progress has also been made on the restart. During the quarter, the NRC approved the Crane new fuel licensing amendment request, clearing the path for the receipt of new fuel and representing another significant milestone towards returning the facility to service in the second half of 2027. In addition, FERC granted the waiver request to transfer the capacity injection rights from our Eddystone facility, which is slated to close, to Crane. We expect that this transfer will help clear many of the transmission contingencies identified in PJM's initial deliverability review and will pave the way for Crane to deliver full value to the grid. Further strengthening the value and unique long-term durability of our nuclear fleet, we continue to extend the lives of our clean energy centers. During the quarter, we filed subsequent license renewal applications for both the Ginna and Nine Mile Point 1 clean energy centers. These extensions were made possible by Governor Hochul and the New York Service Commission, recognizing the value of clean, reliable nuclear energy and extending the ZEC program, advancing our strategy to preserve these critical assets for New York and for America. As a reminder, these programs and license extensions mean that Constellation is truly in a unique space with the vast majority of our power generation secured through 2050 and beyond. Integration with Calpine is progressing well, and we are seeing strong collaboration across the combined organization as teams identify opportunities to create additional value for you. In addition, we're pleased to have reached an agreement with LS Power to sell the Brazos Valley Energy Center, following regulatory approvals and closing, the sale will satisfy the final DOJ requirement tied to the Calpine acquisition. The fact that smart private equity buyers with long track records and competitive power markets are willing to pay over $1,400 a kW for Texas assets in a soft ERCOT market should tell you everything you need to know about the value of the efficient gas fleet that we now own. Finally, we continue to execute on our capital allocation strategy. Year-to-date, we have deployed approximately $2.2 billion toward opportunistic and accretive share repurchases. Shane will talk about it, but we already are seeing upside to our earnings from these buybacks. Turning to Slide 6. As I mentioned at the outset, we executed this quarter on 920 megawatts of long-term contracts for nuclear power. While I can't disclose pricing, what I can say is that the deals recognize the value of existing clean and reliable nuclear energy as a premium product. After a successful quarter in signing deals, we have now contracted roughly 30% of our clean baseload output under long-term agreements, and our transactional pipeline for future deals is both robust and active. Taking an additional moment on the deal that was announced this quarter with our partner, Walmart, I wanted to mention that Walmart has a long history of supporting clean energy development. But this agreement represents their first nuclear power purchase agreement and the first transaction of its kind for a major retailer. Walmart is helping to define how corporate customers think about nuclear energy, reflecting a growing recognition that achieving ambitious decarbonization goals requires access to around-the-clock carbon-free generation. This transaction is only the beginning of a wonderful partnership with this iconic American company. The Walmart deal taken together with the others this quarter reinforces the broad appeal of our products and capabilities to customers of all kinds. Moving to Slide 7. I want to provide some additional context on regulatory developments that are improving the backdrop for customer contracting. In June, we received strong validation from FERC, which made clear its desire to move more quickly in establishing new pathways for serving large loads. FERC ordered every RTO to justify how their existing tariffs provide for the just and reasonable interconnection of large loads to the grid or propose revisions to their tariffs. FERC also called balls and strikes on the rules for new transmission services for co-located loads and directed PJM to explain why they cannot make those services available more quickly. Beyond its support for exploring co-located solutions and pushing for speed in resolution, FERC has also demonstrated a willingness to consider innovative approaches that removed barriers to economic growth, including studying generation and load together at a common point of interconnection, something that Constellation has advocated. Initiatives like these could create a meaningful pathway for customers to access affordable solutions more quickly while maintaining reliability and supporting broader economic development objectives. As these frameworks develop, the value of existing generation and infrastructure will become increasingly apparent. Our fleet is uniquely positioned to help meet these objectives by leveraging assets that are already operating, connected to the grid and capable of supporting growing customer demand more efficiently than many other alternatives, even as we bring on new capacity to meet the growing demand. Last week, PJM released proposals for the reliability backstop procurement or RBP, and the Interim Resource Adequacy Service, or IRAS, while aspects of PJM's proposals, need clarification and further consideration, we are now on path for resolution and certainty, which will allow customers and suppliers to make investment decisions with greater visibility and confidence in the market rules. PJM has also established a clear target of 6.8 gigawatts for the RBP, and we are currently in the bilateral matchmaking process, which is intended to pair customers with new supply and reduce the amount of capacity ultimately required through the central procurement. PJM has proposed conducting the procurement auction this fall with results expected by year-end. Overall, we are pleased by the pace of progress. As those who have followed PJM for years understand the speed at which FERC is requiring PJM to move is unprecedented. And many of the concerns we raised earlier this year on that front are being addressed. On a parallel path with the PJM and FERC processes, Constellation and other stakeholders are urging EPA to make clear that any curtailments ultimately directed by FERC tariffs should be excluded from the 50-hour annual limit for the use of backup generators at data centers. This could unlock meaningful optionality for our data economy customers while preserving reliability and reducing energy costs for all customers. Remember what we've discussed before. We have plenty of unused capacity in generation and in the wires grid over 99% of the hours of the year. We have a peak capacity concern, not an energy concern. The secret sauce here is to deal with a handful of peak hours that present reliability concerns and, at the same time, to harvest the stranded capacity that exists every other hour of the year. If we do this right, then we can actually bring on these critical technologies and lower energy costs for everyday families and businesses. In conclusion, we still have some wood to chop here, but the direction and the speed are very promising. We urge PJM to keep it up. Turning to Slide 8. I'm going to conclude my remarks on this slide and return back to the point that are made at the top about business values and our focus on communities. This slide talks about the fantastic progress we've made at Crane by creating a win-win-win for Pennsylvanians, the local communities and our customer. I'm not going to drain the slide, you could read the words yourself. Instead, I want to draw a parallel between what it takes to build, operate and start nuclear plants with what it takes to build, operate and start data centers. And the basic point that I want you to consider is this. Like in the case of nuclear, the public reaction we are seeing to data centers in terms of moratoriums or opposition in places can be strong at times. No one can deny that. But as the Crane example shows the concerns underlying the opposition to data centers are far from unsolvable. Indeed, I would suggest to you that if we can restart Crane at Three Mile Island and earn overwhelming political and public support, then we can certainly earn the public support to build a 21st century data economy in our communities. It comes down to the trust we earn with the right business values focused on making our communities better and stronger. It's all about the things on this slide: jobs, tax base and community contribution. When it's done right, it works. With that, I'll turn it over to Shane. Shane Smith: Thanks, Joe, and good morning, everyone. Turning to Slide 9. We earned $1.42 in GAAP earnings per share and $2.55 in adjusted operating earnings per share in the second quarter, which is $0.64 higher than the second quarter last year. The higher year-over-year quarterly results are primarily attributable to accretion from Calpine, higher capacity prices in PJM and strong performance from our commercial business that has once again delivered value through higher realized customer margins and from portfolio optimization during periods of volatility. This strong performance has contributed to our improved full year outlook, which I will cover shortly. Our favorable quarterly drivers were partially offset by higher planned nuclear refueling outage days and the timing of revenue recognition from the Illinois ZEC program. As we've discussed on prior second quarter calls, Illinois ZEC revenue timing can vary year-to-year. This quarter, we recognized $85 million of bank credits compared with $200 million last year. This timing item was already reflected in our 2026 guidance and has no impact to full year results. This true-up also reflects the final planning year adjustment before the Illinois ZEC program ends in May of 2027. Slide 19 of the appendix provides additional details on the program. Moving to Slide 10. Our nuclear fleet delivered a 93% capacity factor and generated 40 terawatt hours of reliable, low-carbon electricity while completing 6 planned refueling outages. As expected, the quarter included additional planned outage days, which reduced our capacity factor by 1.8% compared to the second quarter of 2025. Our 23-day average refueling outage duration in the quarter included the successful implementation of our turbine upgrade at Byron Unit 1. And even with that longer outage, the team still outperformed the industry average duration by 40%. This outstanding result in a quarter with elevated planned refueling activity speaks to the consistency, discipline and expertise of our nuclear operations team that performs this work efficiently and most importantly, safely. Turning to Slide 11. We are raising our full year adjusted operating earnings guidance range to $11.50 per share to $12.50 per share, up from our prior range of $11 to $12 per share. Strong commercial execution combined with the benefits of our disciplined capital allocation gives us the confidence to raise the midpoint of our full year guidance by $0.50 per share just halfway through the year. We will revisit our full year outlook in the Q3 call as we put the summer behind us. We have reflected these updates in the modeling appendix on Slide 25. Turning to Slide 12. We continue to operate from a position of financial strength, supported by our strong investment-grade credit ratings. That financial strength gives us flexibility to best serve our customers, invest in our business and also return capital to shareholders in a disciplined way. Since the first quarter call, we returned just under $2 billion of capital to our owners through share repurchases. Together, with the $335 million we shared on the Q1 call, we have allocated about $2.2 billion to accretive share repurchase in the 4 months since our business and earnings outlook at the end of March. We will continue to be opportunistic as we deploy the remaining $2.8 billion of available authorization. Today, after a very competitive process, we announced an agreement with LS Power to sell the Brazos Valley Energy Center for $860 million or about $1,420 per kilowatt. It was great to see such a high level of interest for the asset in spite of recent ERCOT weakness. It was clear from a very competitive process that buyers recognize the long-term value of gas-fired assets with the potential for even higher utilization rates. Once approved, this divestiture will satisfy the remaining DOJ settlement obligations for the Calpine acquisition. In total, the assets that were required to be divested by the DOJ are expected to generate approximately $5.9 billion in gross proceeds, which at a nearly $1,200 per kW basis reflects a healthy premium to the implied $960 per kilowatt purchase price of the Calpine assets. Moving to Slide 13. As discussed in March, we see meaningful opportunities to grow our earnings and free cash flow over time. We have already started translating a few of those growth levers into tangible contributions. The sensitivities provided in March were informed by active discussions across a diverse set of customers. Now that we have executed nearly 1 gigawatt of nuclear PPAs within the range contemplated by this view, we thought it was worth revisiting this table. While the agreements announced today have later start dates and are not expected to materially impact 2029 earnings, they provide additional visibility into sustained growth in our base earnings over time. Separately, we are also updating our 2029 capital allocation sensitivity range to reflect the share repurchases we have completed to date. The updated range now includes a floor of $0.20 per share with potential upside of greater than $0.75 per share. The low end reflects the benefit of the repurchases already completed, while the high end reflects the meaningful optionality we still have under our buyback authorization and our ability to continue deploying capital when we see attractive growth opportunities. Last, I would also like to highlight an update to the nuclear production tax credit, as shown on Slide 17 in the appendix. Following the IRS publication of the 2025 inflation adjustment, we updated our forward PTC strike price assumptions, incorporating a 2.8% adjustment for 2025 and continuing to assume 2% inflation annually in 2026 and beyond, the projected 2030 PTC strike price will increase from $49.88 to $50.88 per megawatt hour. This change will increase our view of 2030 base earnings by approximately $0.30 per share. More broadly, the PTC's inflation linkage continues to provide upside to our base earnings outlook should inflation exceed our 2% long-term assumption and is another factor supporting our goal of sustaining double-digit base earnings growth into the 2030s. With that, I'll turn the call back to Joe. Joseph Dominguez: Thanks, Shane. To close out today in practical terms, we're seeing the benefits of speed in the regulatory process. Our customers are gaining more certainty every day, and we're hopeful that PJM and FERC could remain on track and deliver regulatory clarity by year-end. Our team also is actively engaged with customers and policymakers to explore different options for connecting new large load to the grid, and our conversations are strong. We're focused on what we do best, operating our assets at world-class levels, helping our customers achieve their energy and sustainability objectives and creating long-term value for our owners, customers and the communities where we live and work. Thanks for your time today, and the team is now ready for your questions. Operator: [Operator Instructions] Our first question comes from Nick Campanella with Barclays. Nicholas Campanella: So it's great to see the new long-term nuclear deal. I guess just can you kind of talk about if it's acceptable in your terms of long-term value, just price and term, I guess, how do we think about the customer? It sounds like it's a hyperscaler, but is this just more of a traditional C&I? And is it one deal that's incremental to Walmart? Just how to think about that? Joseph Dominguez: Yes. Look, I'm not going to -- as I said, I'm going to adhere to the rule that we're going to let the customers explain their deals and announce them to the extent that they choose to. But Nick, it is consistent with our view of long-term value for the nuclear fleet. And I think this is one of many opportunities we're continuing to see in the market. Nicholas Campanella: Okay. Great. And then you mentioned being engaged in the bilateral process in PJM. Can you just give detail, obviously, that'd be new capacity that would net against the 6 gigawatt figure, but could hybrid deals be in play, if you could work to address the nonpeak issues? And maybe talk about the 5 gigawatts of new capacity that could be eligible that you highlighted on the last call. Joseph Dominguez: Yes, I'm going to -- Dan Eggers is kind of overseeing a bit of that. So I'm going to ask him to chime in here. But look, the process, the bilateral process is confidential, and we'll keep it that way. But you should assume that all of the opportunities we have to add megawatts are being talked to with customers in combination with our existing capabilities. Think about it. I mentioned this on the call. The best outcome for America is to take advantage of the stranded capacity that exists in the U.S. grid. That's wires and generation capacity. That's fastest and it also reduces costs. How does it reduce cost? We know on the wire side, all the fixed cost elements of the system get spread out over more hours of usage that brings the per-hour usage rate down. So that's how it works on the wire side. On the energy side in competitive markets, what it means is it puts downward pressure on capacity prices over time. Remember, the capacity price that generators seek in the PJM market or the so-called missing money is the difference between what it costs them to build and operate and what they're receiving in energy markets. So the more the existing generators fully utilize efficiently the -- are fully utilized by customers, the less dependent they are on a big capacity payment. We've seen that over the years. As energy and ancillary services go up, capacity prices go down. So all of the incentives here for everyday families and businesses are aligned with tapping into this stranded capacity. Our customers know that. At the same time, we do have to manage the peaks. That could be managed with batteries, with demand response, with peaking resources, other forms of generation could be a part of that. But they still have to figure out, not just the peak, but what they're doing every other hour of the year. That's where our fleet becomes extraordinarily valuable because it's a fixed-price, clean energy resource that they could count on for decades, and that's what they want. So this kind of idea where we're trying to -- or this notion that existing and new are completely bifurcated and don't come together, it's just not the reality of the way customers look at their procurement strategies. The backstop auction is a part of that. But it's also part of what we're doing every single day in our conversations with customers. Dan, I said I was going to hand it over to you, and then I went on and talked about it. Daniel Eggers: It was great. I just -- Nick, what I would add to what Joe said, right, is that when we put forward the megawatts in the interconnect queue, it was a full range anywhere from uprates on the baseload side, the batteries to peakers. Our motivation here is consistently to provide our customers with what they need, right? So solutions are important. The bilateral market is clearly a place where we can get those things done. We'll see how that works out and what's left to address in the RBP when we get there. Joseph Dominguez: Yes. Nick, I'll just come back. Dan, thank you for that. And I'll just come back, Nick, to another big piece of this. I think what EPA ends up doing here and its clarification process of its rules for the backup generation at sites is really going to matter because as resources have to be curtailed to address these few peak hours, the utilization of those backup generators may be the most effective way for us to kind of address the peak demand and do the things we're talking about in terms of really taking advantage of the stranded capacity in the system and lowering prices for customers. Operator: Our next question comes from Steve Fleishman with Wolfe Research. Steven Fleishman: So a couple of questions on the new contracts. So it's from nuclear. So most of your nuclear is in PJM. So should we assume these are in PJM? Joseph Dominguez: Steve, we're not really going to pinpoint the origin. But yes, you're right. Most of our stuff is in PJM. Steven Fleishman: Okay. And just I think there have been some concern that with the Connect and Manage or IRAS like whether customers can contract for existing like whatever contracts you have, have they kind of incorporated kind of whatever outcomes could come out of that? Joseph Dominguez: Yes. Steve, I think I probably droned on about it a bit long just a moment ago, but just let me give you a specific example. Let's suppose that in the context of Connect and Manage, a customer is deciding to use batteries or further rely on backup generation. They could do that and comply with what we see as the proposed rules going forward. But they'll still need to buy power, they'll still need to buy energy really for all of the other hours they're not managing, the other 99%. And so that's where the existing resources are going to be able to provide quick solution sets. Otherwise, we'd be waiting for every data center to wait for every megawatt to be interconnected and built. And if that's the case, we might as well hand over the keys to China. We're never going to build this economy if the outcome is going to be, we got to wait for new power plants to be built before we can connect any data center. It's clearly not what FERC is thinking about. It's clearly not what Secretary Wright is thinking about. What we're trying to do is manage the peaks, a lot of devices to do that, but the bedrock of building out at least this early phase of the data economy is going to rely heavily in my view on existing generation as it has. Steven Fleishman: Okay. And then one more question. Just your range of the potential value of contracts, I mean, I think it's $20 to $50 a megawatt hour, pretty wide. Can you give us any sense of how things are trending within that range? Shane Smith: Steve, it's Shane. I mean, again, to the point of trying to protect customer sensitivity around the exact pricing, we're going to keep that range as it is. I mean I think it is important to note that when we provided that disclosure in March, we were obviously talking with a number of different counterparties and the transactions all fit that profile. So I think we're comfortable with keeping that sensitivity as it is. Operator: Our next question comes from David Arcaro with Morgan Stanley. David Arcaro: I was wondering if you could -- maybe shifting over to the ERCOT market. Wondering if you could give your view on the Batch Zero process. Do you have projects that you're partnering within that program? And curious how you see that evolving from here? Joseph Dominguez: Yes. Let me turn it over to Dave Dardis for comments on that. The answer is yes. We also have, by virtue of the acquisition of Calpine, some projects that we're really early first movers, I think, in Texas, where we've gone through necessary approvals, and we're proceeding with clients on it. But some of our sites are in the Batch Zero process. And so we're evaluating what it means to answer the questions presented by the Governor's letter, and we're hoping to see activity here from ERCOT and the Texas PUCT to clarify those things soon. David, anything to add? David Dardis: I guess all I would add is, Governor Abbott has been very clear that he is a champion for responsible data center development in the state of Texas. He understands its importance for Texas competitiveness and ultimately, American competitiveness. So I don't think anything has changed there where he said Texas should be the epicenter of AI. I don't think his view has changed on that. But like all these folks, particularly coming into the midterm elections, they want to be responsive to their constituents. And Governor Abbott has asked for some pretty reasonable information to be included as part of Batch Zero. We think all that information can be provided quickly, and we don't think it should be a meaningful delay in ultimately moving through that process and getting answers quickly. So we see this as a temporary measure here that we think is manageable by the industry, and we look forward to working with the Governor and the PUCT. Joseph Dominguez: And David, I think some of the answers here are going to be pretty darn good. There's some fanciful kind of numbers out there about the use of, for example, water and things. Some of the solutions that we're seeing for water usage from some of our clients are -- put water consumption on the level of a restaurant or a large store for data centers. So I think it's going to be an eye-opener to people. I think they're the right questions to be asked, not all data centers are the same. So maybe this is intended to ferret out those that have been less efficient with water resources. But I think there's a lot of good answers out there. David Arcaro: Absolutely. Yes, that's really helpful. And curious if you could also maybe give your view on the outlook for just on the power market side of things for ERCOT outlook for power prices and spark spreads from here. We know the market has been under pressure. And curious your view on that and maybe also just the battery storage, how that's impacting the market from here, too. Joseph Dominguez: Yes. Thanks for the question, David. This was one that came up last quarter. I think, Jim and Andrew talked a bit about it. What we're seeing in Texas is what we fully anticipated. The battery storage and other things you're talking about started earlier and they're arriving on the grid earlier than the load is. And so we talk a lot about data centers in Texas. But if you really take a look at where the construction of that build-out lies, you'd find that the vast majority of the data centers that are anticipated are still at some stage of construction and not on the grid. So Andrew, I think, was the one that mentioned, we would expect to see, dependent on weather, and if you don't have the right weather, you're not going to see a lot of price action in Texas. And that's what we've seen this year. It was completely, completely expected by us at Constellation, completely expected by Calpine, and we positioned ourselves in the market accordingly. I think the market will start to tighten up as the data centers get built and you start to see the market come into more or less equilibrium. Operator: Our next question comes from Jeremy Tonet with JPMorgan Securities. Jeremy Tonet: Just want to turn to Slide 13, if I could. And looking at the earnings and free cash flow before growth opportunities in '29. And I think the capital allocation is bolded on the table. I think that might be new this quarter. I saw the share repurchases there. But just wondering on the growth investment side, is there anything kind of new to think about with regards to this table here? Shane Smith: Jeremy, it's Shane. So in the initial disclosure back in March, we gave -- we didn't give a floor, we kind of gave a $0.50 plus as an upside. And so what the $0.20 as a floor is meant to represent is the progress we've made in the last 4 months from those accretive $2.2 billion of buybacks. So I wanted to establish that floor. Naturally, that raises kind of our view of the higher end and we'll see what's beyond. From a growth angle, obviously, we continue to explore, but there's nothing that we've disclosed that would directly inform that range at this time. Jeremy Tonet: Got it. That's helpful. And then just wondering about customer conversations in general, how the tone might have changed over time here at PJM. You're seeing some kind of improvements in energy prices, capacity prices later dated here. And wondering how that's influenced conversations even with like existing large load and the interest in derisking their power exposure, price exposure over time. Just curious how conversations might have changed over time. Joseph Dominguez: Yes. Jeremy, I feel like I've been talking about it for 20 years, but it's probably more like 2 years. The worst thing for deal execution is ambiguity and uncertainty. I think I've said -- and for those of you who've been on our calls for a while, remember, we were talking about which components of the transmission service should large load pay and be excused from. And I think I offered just -- you got to just tell these people what it is and then they could plan around it. I think what we'll see is very shortly the entirety of the data economy investing what could be upwards of $1 trillion in infrastructure annually when you put all the pieces together. People want to get this stuff going. You've read the Morgan Stanley report the other day, the returns for the investments they're making in data economy and these AI models are proving out. What our customers want is to understand the rules of the road. And then they'll manage around them. Some things need to be done better, PJM's Connect and Manage program needs a lot of improvement. But the reality is, at the end of the day, the rules and rule clarity are going to be the thing that are going to encourage deal flow for us and completion of these nation critical projects for these large customers. So just over the course of this year as we've been -- when we started the year, we really started from a position where the executive order that the President signed with the hyperscalers and the pledges they signed, people were trying to figure out what that would look like in actual practice. A lot of really good work has been done. And although we don't agree with everything that PJM has proposed, we applaud them for providing clarity that is needed here. And quite naturally, that is fueling kind of a resumption of contracting activity. And I believe that once we do get clarity, we're going to see here in PJM what we've seen in many places where deal flow will kick off with a bit of a bang. Operator: Our next question comes from Sophie Karp with KBCM. Sophie Karp: Right. Congratulations on a good quarter and announcements here. I was wondering, what do you guys see as the next step in the co-location process in the PJM? Will there be like a definitive document coming out of PJM that will be the final and authoritative, I guess, document in this process as we establish the final clarity for everyone and when will that be? Joseph Dominguez: Yes. Sophie, as you know, Constellation has been turning up the heat to get that moving more quickly. We've seen some extensions of time to answer that. In short, we think that we're going to see rule clarity in the first to second quarter of '27 in terms of co-location, far ahead of where PJM might have been before where they were targeting 2029. So this is an area where FERC has put some good pressure on PJM and the RTOs to provide some clarity. We have some ideas. One of those things I mentioned in my prepared remarks was this notion of modeling load and generation at the same point of interconnection. So there, really what I'm talking about is adding batteries, adding other generation resources at existing operating generating facilities, and then co-locating a load there. So you might have a data center next to an existing power plant, but that power plant has supplemental capacity capability through the incorporation of batteries and other devices. We think those hybrid solutions of mixing new capacity resources, existing generation and co-locating that with load, that's the promise we see going forward. We still -- that's moving a little bit slower still than we wanted, but a lot faster than was anticipated at the beginning of the year. But answer to your question, I think with the 90-day extensions, we're expecting a response from PJM here in about the November time frame. I'm looking at David. Does that sound right, David? David Dardis: That's right. Joseph Dominguez: And then an order from FERC in the first to second quarter of next year. Sophie Karp: Great. And then just a higher level question. You've been allocating capital to share buybacks quite a bit, and that makes sense given the variation and the opportunistic nature of that. How do you think about jump starting the cycle of investing organically into maybe new builds in addition to the -- let's say, nuclear start you're working on. Is there a place in the U.S. that you think is where the economics work for that right now? Joseph Dominguez: We're having some good conversations in New York about the future of nuclear. But there's nothing right now that I would describe as imminently on the horizon for investment in new nuclear. What you're seeing us do and what you'll see us continue to do here is to prepare our sites for new nuclear development because that work's got to get done anyway. The permitting, the early site permits that are needed. So we want to, when we've been able to figure out the construction schedule and pricing and the customers on the other side of that, we want to have a bunch of different locations where customers could come. New York is a very exciting opportunity for us, and that's something we're pursuing with Governor Hochul and her administration. But it's not yet going to show up on financial disclosures for capital. It's not that imminent. Operator: Our next question comes from James West with Melius Research. James West: Joe, you've been kind of somewhat of alone, but kind of [ clarion ] voice here in the market about some of the stranded generation assets or underutilized assets, while a lot of people have been beating the drum on new generation. And I think you've laid out your reasons why already. But I'm curious, from the customer standpoint, as you're talking to them about this latent capacity. Are they -- what's their view on that? Are they willing to say, "Hey, that's here, it's ready to go. We'll build infrastructure next to it or near it." And then are they also talking about, "Hey, are you willing to build a little more capacity, but we'll start with the existing capacity?" Kind of how is that conversation evolving with the customers? Joseph Dominguez: Definitely all of the above. One of the things that it really has just been remarkable is the level of sophistication that our clients now possess about the grid is as good as the energy companies themselves. That, quite honestly, not to insult anybody, wasn't true 2 years ago. And so this kind of combination of resources and what batteries could do, what demand response could do, all of our sophisticated customers understand that. And I appreciate you give me a bit of a shout out for being a clear voice. But I think the most powerful voice on this subject has actually been Department of Energy Secretary, Chris Wright, who has been saying exactly what I've said on these calls now for 3 years. And that's been now backed up by study after study from Duke and Brattle and many others who have talked about the same thing. So sometimes when we talk about capacity, it is for the layperson, easy to confuse that with energy and it gets really complicated pretty quickly in our business. But our clients understand it. And what they seek from us is all of the above, really. I think you're seeing that basically in our contracting where we're relicensing facilities that are adding life. We're talking about uprates with clients, that's exciting. You saw that in the Walmart deal. But it doesn't operate to the exclusion of recognizing that the existing megawatts have an important role to play in this ecosystem. James West: Right. Got you. And then you mentioned batteries as well. Are we -- has the battery technology evolved to the point now where real significant long-duration storage is available to help backstop the grid? Joseph Dominguez: I think batteries are already doing that. We're talking a bit of that about the effect we're seeing in Texas of batteries. Now that's -- when we talk long duration, you got to get pretty into the weeds here. But I'm talking about it, just to be clear, about 4-hour batteries, and we continue to think that 4-hour batteries have a very big role. And as you know, Calpine has been one of the U.S. leaders in terms of the development and integration of those batteries. And now at Constellation, we're drawing on that substantial expertise. Operator: Our next question comes from Julien Dumoulin-Smith with Jefferies. Julien Dumoulin-Smith: Look, a couple of clarifications here. Starting with bilateral, if you can. I know you said it was confidential, but can you speak a little bit to the timing, right, in as much as, obviously, the RBP is somewhat specific on when it goes down. How do you think about the time line here inasmuch as where are you in those negotiations vis-a-vis this potential RBP coming up in the next couple of months. Is it lagged by a couple of months here, thereafter, or is it even prior? How do you think about that and the considerations that may be playing out therein? Joseph Dominguez: Yes, Julien, and I'm sorry, I had intended to be clear earlier. But I think the RBP is one avenue, but it is not the exclusive avenue for customer conversations. And indeed, I think customers will consider whether they want to participate in that or do something completely separate, bilaterally separate as they've done now for a couple of years before this PJM process was even dreamed up. So I think kind of all of that is playing out. What customers want to understand is, what I'm doing in contracting space going to meet the requirements in a future PJM rule such that I could be assured that I'm compliant, right? And I understand what my backup and curtailment responsibilities might be. So as we get to some clarity here in terms of what PJM is proposing, they're able to do that. They're able to say, yes, I don't know exactly yet. It's not been rubber-stamped by FERC. Rubber stamp is a bad phrase here. But it hasn't been approved by FERC. But I understand what PJM is proposing, and now I could start crafting a strategy to meet any requirements that come out of that. The backstop is a piece of that. But it may not be that each client is going to depend on the backstop. It's just one other avenue for meeting the requirements. Daniel Eggers: Julien, if I would add to the context. Contracts today, those are signed contracts. So if the question was, are we dependent upon something on the FERC decisions or PJM decisions. These deals are not dependent upon those outcomes. Joseph Dominguez: Yes. Sorry, I didn't know if that... Julien Dumoulin-Smith: No, that part was clear. No, no, no. That wasn't. But I appreciate you confirming it regardless. And I appreciate it. Actually, if I can pivot real quickly to the other side of the equation. Obviously, Illinois has a lot of interest. They've kicked off a process on nuclear procurement here this year. You all are an obvious counterparty here. And I suspect you don't want to negotiate this on the call per se. But can you speak to the time line around what the state is looking to do on procurement here in as much as, from what I understand, that includes uprates as well as new nuclear. How would that time line play out in tandem with anything else you have going on? And obviously, you have a CMC expiration here next year. Any considerations therein you'd care to share given where we stand today alongside the state's wider new nuclear ambitions? Joseph Dominguez: Well, I think the state has a process here where they're going to do an IRP and then ultimately, a procurement plan. And we'll have a voice in those things. We don't have anything separately that we're negotiating with the state of Illinois to be absolutely clear, we'll see what they come up with the IRP. We think New York is a wonderful template for what Illinois should be looking to do. Operator: Ladies and gentlemen, this does conclude the Q&A portion of today's conference. I'd like to turn the call back to Joe for any further remarks. Joseph Dominguez: Well, again, thanks for your continued interest in Constellation. Our people had really a spectacular quarter. And we look to finish off and have a spectacular year the rest of the way. I want to wish you all a safe rest of the summer and look forward to getting together at the end of the third quarter. Thanks again. Operator: Ladies and gentlemen, thank you for participating in today's call. This concludes the program. You may now disconnect. Everyone, have a great day. Before you buy stock in Constellation Energy, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Constellation Energy wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $403,337!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,334,946!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 13, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Constellation Energy. The Motley Fool has a disclosure policy. Constellation Energy (CEG) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributed the $0.50 guidance midpoint increase to strong commercial execution, PJM capacity price tailwinds, and accretion from the Calpine acquisition. The company signed 920 megawatts of long-term nuclear agreements with an average duration of 18.5 years, signaling a shift toward nuclear as a premium, around-the-clock carbon-free product for corporate customers like Walmart. Management emphasized that the 'secret sauce' for grid reliability involves harvesting stranded capacity that exists 99% of the year while using batteries and demand response to manage peak hours. The divestiture of the Brazos Valley Energy Center for $1,420 per kW was highlighted as a valuation benchmark, proving the high market value for efficient gas assets despite soft ERCOT pricing. Operational excellence was underscored by a 99% nuclear capacity factor during mid-Atlantic heat waves, demonstrating the fleet's role as a critical reliability backstop. Management noted that the Crane (Three Mile Island) restart progress, including fuel licensing and capacity right transfers, serves as a blueprint for earning community trust in large-scale energy projects. Guidance for 2024 was raised to $11.50–$12.50 per share, with management indicating that the previous top-end is now the new midpoint as summer performance remains to be finalized. The company expects regulatory clarity on co-location and large load interconnection by year-end, driven by unprecedented speed from FERC and PJM's reliability backstop proposals. Management updated the 2029 capital allocation floor to $0.20 per share to reflect $2.2 billion in completed buybacks, with upside potential exceeding $0.75 per share depending on future deployments. The Nuclear Production Tax Credit (PTC) strike price was adjusted upward to $50.88 per MWh for 2030 based on inflation indexing, which is expected to add approximately $0.30 per share to base earnings. Strategic focus remains on 'Connect and Manage' frameworks, with management advocating for modeling load and generation at common interconnection points to bypass traditional transmission delays. The sale of Brazos Valley Energy Center satisfies the final DOJ requirement related to the Calpine acquisition, with total divestiture proceeds of $5.9 billion reflecting a premium over the original purchase price. Management flagged the 50-hour annual limit for backup generators as a critical policy area, urging the EPA to exclude FERC-directed curtailments to unlock data center optionality. The Illinois ZEC program revenue timing resulted in a year-over-year decrease ($85M vs $200M), though management confirmed this was anticipated and has no impact on full-year results. Subsequent license renewal applications were filed for Ginna and Nine Mile Point 1, extending the operational horizon for the vast majority of the fleet through 2050. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management declined to provide specific pricing to protect customer procurement strategies but confirmed the deals align with their 'long-term value' view for nuclear as a premium product. The contracts are with investment-grade customers and include the first-ever nuclear PPA for a major retailer (Walmart). Management clarified that signed deals are not dependent on pending FERC or PJM decisions; however, clarity on rules will accelerate the broader transactional pipeline. They argued that the U.S. cannot wait for new builds to connect data centers and must utilize existing generation to remain globally competitive. Management attributed current ERCOT price softness to battery storage and new supply arriving before the load, which is still under construction. They expect the market to tighten significantly as data centers currently in the 'Batch Zero' process come online. While no new builds are imminent in the capital plan, management is actively preparing sites with early permits to be ready when customers and construction schedules align. New York was highlighted as a 'wonderful template' for future nuclear procurement discussions.

Track your investments for FREE with Simply Wall St, the portfolio command center trusted by over 7 million individual investors worldwide. Constellation Energy (CEG) is back in focus after reporting second quarter 2026 results, with sales of US$7,504 million and net income of US$513 million, along with an updated full year earnings outlook. See our latest analysis for Constellation Energy. Against that earnings beat, Constellation Energy’s share price has climbed 8.92% over the past month but is still down 28.71% on a year to date share price return basis, while the 3 year total shareholder return of 152.05% reflects how strong the longer term outcome has been for investors who stayed the course. If this nuclear focused story has your attention, it could be a good moment to look across the wider grid transition and check out 36 power grid technology and infrastructure stocks After that post earnings jump, Constellation Energy still trades at a sizeable discount to both analyst targets and one estimate of fair value. Is the market rightly cautious, or is it mispricing the story here? Constellation Energy's most followed narrative puts fair value at $352.91, well above the last close of $261.10. That gap gives the recent earnings beat important context. Read the complete narrative. Want to see what sits behind that premium contract thesis? The narrative leans heavily on future revenue growth, rising margins, and a richer earnings multiple tied to those contracts. Result: Fair Value of $352.91 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, Constellation Energy’s heavy reliance on regulated nuclear assets, along with its tight links to large data center customers, could pressure margins if regulation or customer needs shift. Find out about the key risks to this Constellation Energy narrative. The first narrative paints Constellation Energy as materially undervalued, yet the P/E ratio tells a different story. At 24.6x earnings, CEG trades above the US Electric Utilities industry at 21.2x and above its own fair ratio estimate of 29.8x. That raises a simple question for investors: Is this a margin of safety or a sign expectations are already high? To see how those P/E gaps, peer comparisons, and the fair ratio play out in detail, it is worth reviewing the valuation breakdown in full. See what the numbers say about this price — find out in our valuation breakdown. Feeling unsure after weighing both the optimism and the caution around Constellation Energy? Take a closer look at the details now and shape your own view with the 4 key rewards and 2 important warning signs If Constellation Energy has sharpened your focus, do not stop here. Use this moment to scan other opportunities and keep your watchlist working hard for you. Spot potential value opportunities early and review 50 high quality undervalued stocks that currently look attractively priced on multiple checks. Prioritise resilience first and assess 77 resilient stocks with low risk scores that score strongly on stability and downside protection. Hunt for quality off the beaten path and uncover the screener containing 19 high quality undiscovered gems that many investors may still be overlooking. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include CEG. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Constellation Energy Corporation CEG used its second-quarter 2026 earnings call to emphasize stronger commercial execution, faster regulatory progress and momentum in long-term nuclear contracting. Management raised its full-year operating earnings outlook. The call centered on how Constellation plans to monetize its enlarged fleet, advance Crane and serve rising large-load demand under evolving grid rules. Executive vice president and CFO Shane Smith raised adjusted operating earnings guidance to $11.50-$12.50 per share from $11-$12, lifting the midpoint by 50 cents. Smith attributed the stronger outlook to Calpine accretion, higher PJM capacity prices, customer margins and portfolio optimization, partly offset by planned nuclear outages. Second-quarter adjusted operating earnings of $2.55 per share topped the Zacks Consensus Estimate of $2.36. Revenues of $7.50 billion also beat the $7.47 billion consensus mark. Constellation Energy Corporation price-consensus-eps-surprise-chart | Constellation Energy Corporation Quote President, CEO and chairman Joseph Dominguez said the company signed about 920 megawatts of long-term nuclear agreements since the prior call, with an average duration of 18.5 years and investment-grade customers. Constellation now has roughly 30% of its clean baseload output under long-term agreements. The new contracts start between 2029 and 2032, including a 176-megawatt Walmart agreement supporting a 30-megawatt Dresden expansion. CFO Smith kept the prior $20-$50 per megawatt-hour contract-value sensitivity unchanged in Q&A and said the completed transactions fit that profile, while customer-specific pricing remained undisclosed. CEO Dominguez highlighted two Crane milestones: NRC approval of a new fuel licensing amendment and FERC approval to transfer capacity injection rights from Eddystone. The company targets a second-half 2027 restart. Dominguez also said PJM and FERC are moving faster on large-load rules, improving customer confidence. PJM has proposed a 6.8-gigawatt reliability backstop procurement, with an auction planned for the fall and results by year-end. During Q&A, Dominguez told a KeyBanc analyst that he expects PJM's co-location response around November and a FERC order in the first or second quarter of 2027. Smith said Constellation deployed about $2.2 billion to share repurchases in four months and retains $2.8 billion of authorization. The completed buybacks now establish a 2029 capital-allocation earnings sensitivity floor of 20 cents per share. Management also agreed to sell Brazos Valley Energy Center for $860 million, or about $1,420 per kilowatt, completing the final asset-sale requirement tied to the Calpine transaction once approved. Smith separately raised the projected 2030 nuclear production tax credit strike price to $50.88 per megawatt-hour from $49.88, increasing management's 2030 base-earnings view by about 30 cents per share. A Barclays analyst pressed management on how new generation, batteries and existing assets could fit PJM's bilateral process. Senior executive vice president of Finance and Data Economy Daniel Eggers said customer solutions span uprates, batteries and peakers. A Jefferies analyst then asked whether contracting depends on pending FERC or PJM decisions. Eggers clarified that the contracts already signed are not dependent on those regulatory outcomes. Dominguez told a Morgan Stanley analyst that batteries arrived before much of the expected data-center load while ERCOT remained soft. He expects the market to tighten as data centers are completed. Management's posture coming out of the second quarter remained centered on integrating Calpine, securing long-duration nuclear contracts, advancing Crane and using existing generation to serve large-load growth. Dominguez kept regulatory clarity near the top of the agenda, saying clearer PJM and FERC rules can support contracting while allowing customers to combine existing supply with peak-management resources. The operating message remained focused on nuclear performance through a heavier outage schedule and use of the broader platform to capture commercial opportunities. CEG currently carries a Zacks Rank #4 (Sell), alongside a Growth Score of B and Value, Momentum and VGM Scores of C. Under the Style Score framework, A and B are more favorable than C, with the Zacks Rank taking precedence in the combined assessment. The Growth Score offers a comparatively stronger style signal, but the current Rank points to weaker earnings-estimate revision trends. The Zacks Rank can change as analysts revise estimates following the just-reported results, so the present reading remains dynamic. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Constellation Energy Corporation (CEG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Concerned about an AI bubble? Sign up for The Daily Upside for smart and actionable market news, built for investors. Beneath the obvious AI hyperscaler stocks — Meta, Nvidia and so on — lies another layer of trades: the energy companies providing the power AI needs to, for instance, edit your ex out of the family photo. Vistra, one of the leading US power generators, reports this morning as it builds out capacity to meet the demand of AI giants. Rival power provider Constellation Energy meanwhile boosted its forecast for the year yesterday after reporting $7.5 billion in second-quarter sales. Sign up for The Daily Upside at no cost for premium analysis on all your favorite stocks. READ ALSO: Can a Manufacturing Rebound Turn Fluor’s Fortunes Around? and For Moderna’s Greenlit mRNA Flu Vaccine, Payoff Is a Ways Off US power use is expected to keep notching record highs in 2026 and 2027, according to the Energy Information Administration. Data centers could suck up a fifth of the US’s total electricity in 2035, up from about 6% today, BloombergNEF found. In states with more data centers, including Texas, that share is expected to be higher. The grid’s already strained, and the record amount of capacity it’s been able to supply to data centers in the past is just over 7 gigawatts a year (one gigawatt is roughly the equivalent of one nuclear reactor). BloombergNEF analysts expect the grid to come 19 gigawatts short of what data centers demand by 2035. To fill the gap, hyperscalers and power companies like Vistra and Constellation are trying to create sparks any way they can: AI is sourcing its juice from both natural-gas and nuclear options. Earlier this year, Vistra struck a deal to buy Cogentrix Energy and its 10 gas-fired power plants for $4.7 billion and reached a 20-year agreement that’ll see Meta buy power from some of Vistra’s nuclear plants. Constellation Energy has forged deals to supply nuclear power to Meta and Microsoft. Constellation said in 2024 it plans to restart Three Mile Island, where the US’s worst nuclear meltdown occurred. The power generated there will supply Microsoft. Not Overnight: AI’s demand could continue to outpace power providers’ ability to meet it, straining the grid and pushing up electricity prices. When explaining Vistra’s projections for how quickly it could increase its available power supply, president and CEO Jim Burke hedged investors’ expectations this spring, saying, “The physical world takes much longer to develop than what people might imagine it takes.” This post first appeared on The Daily Upside. To receive razor sharp analysis and perspective on all things finance, economics, and markets, subscribe to our free The Daily Upside newsletter.

This article first appeared on GuruFocus. Constellation Energy (NASDAQ:CEG), a power producer with one of the largest nuclear fleets in the U.S., turned up the heat on its 2026 outlook, lifting full-year adjusted operating earnings guidance to $11.50-$12.50 per share as the stock traded about 1.1% higher Thursday morning after surging as much as 6.9% earlier in the session. The stronger outlook came alongside adjusted earnings of $2.55 per share, up sharply from $1.91 a year ago, reinforcing that booming electricity demand continues to fuel the company's momentum. Warning! GuruFocus has detected 3 Warning Sign with CEG. Is CEG fairly valued? Test your thesis with our free DCF calculator. The quarter delivered plenty more than a guidance hike. Adjusted net income climbed to $920 million from $599 million, while Constellation locked in another 920 megawatts of long-term power purchase agreements running for 15 to 20 years, with deliveries scheduled between 2029 and 2032. Regulators also cleared another key hurdle for the planned 2027 restart of the Crane Clean Energy Center, giving investors another reason to watch the company's expanding nuclear platform. Although GAAP earnings fell to $1.42 per share from $2.67 because of one-off factors, the underlying operating picture kept moving in the right direction. At the midpoint, management now expects to earn $12 per share this year, a meaningful vote of confidence in the business. Constellation also agreed to sell its 606-megawatt Brazos Valley gas plant for $860 million, completing the divestiture commitments tied to the Calpine acquisition once regulators sign off. The stock gave back part of its early gains as investors digested integration risks and the execution timeline for several major projects, but the bigger story hasn't changed. Constellation keeps stacking long-term contracts, growing future cash flows and doubling down on nuclear power just as AI data centers and electrification are driving demand for reliable, around-the-clock electricity. The GF Value chart adds another bullish twist. Even after this year's strong rally, the shares trade at $264.52 versus a GF Value estimate of $274.81, leaving the stock about 3.75% below its estimated fair value. That isn't a huge discount, but it suggests the market still isn't fully pricing in Constellation's stronger earnings outlook, expanding contracted revenue base and long-term nuclear growth pipeline.

Constellation Energy Corporation (CEG) came out with quarterly earnings of $2.55 per share, beating the Zacks Consensus Estimate of $2.36 per share. This compares to earnings of $1.91 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +8.05%. A quarter ago, it was expected that this company would post earnings of $2.56 per share when it actually produced earnings of $2.74, delivering a surprise of +7.03%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Constellation Energy Corporation, which belongs to the Zacks Alternative Energy - Other industry, posted revenues of $7.5 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.48%. This compares to year-ago revenues of $6.1 billion. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Constellation Energy Corporation shares have lost about 25% since the beginning of the year versus the S&P 500's gain of 12.8%. While Constellation Energy Corporation has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Constellation Energy Corporation was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $3.79 on $8.59 billion in revenues for the coming quarter and $11.72 on $35.57 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Alternative Energy - Other is currently in the bottom 34% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. ReNew Energy Global PLC (RNW), another stock in the same industry, has yet to report results for the quarter ended June 2026. This company is expected to post quarterly earnings of $0.12 per share in its upcoming report, which represents a year-over-year change of -25%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. ReNew Energy Global PLC's revenues are expected to be $451.3 million, down 6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Constellation Energy Corporation (CEG) : Free Stock Analysis Report ReNew Energy Global PLC (RNW) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Earnings Release Highlights GAAP Net Income of $1.42 per share and Adjusted (non-GAAP) Operating Earnings of $2.55 per share for the second quarter of 2026 Raising full-year Adjusted (non-GAAP) Operating Earnings guidance range to $11.50 – $12.50 per share FERC grants waiver allowing the transfer of existing Capacity Interconnection Rights (CIR) to Crane Clean Energy Center, and NRC approves Crane Clean Energy Center's fuel license Signed an additional 920 megawatts of long-term power purchase agreements for clean, reliable generation Entered into agreement to divest the Brazos Valley Energy Center (f/k/a Jack A. Fusco Energy Center) Filed license renewal applications for two New York Nuclear units Recertified as a Great Place to Work for the fourth straight year, named to The Civic 50 by Points of Light for the second consecutive year, and received DisabilityIN World's Top Disability Inclusive Business recognition BALTIMORE, August 06, 2026--(BUSINESS WIRE)--Constellation Energy Corporation (Nasdaq: CEG) today reported its financial results for the second quarter of 2026. "This quarter's accomplishments reflect the momentum we're building across our business," said Joe Dominguez, president and CEO of Constellation. "From advancing the restart of the Crane Clean Energy Center, to executing long-term agreements with our corporate customers and extending the lives of two critical New York assets, we’re strengthening the nation's energy infrastructure and helping meet growing demand for reliable power." "Our second-quarter results and increased full-year EPS guidance demonstrate the earnings power of our expanded platform, strong operational and commercial performance, and the disciplined execution of our capital allocation strategy," said Shane Smith, executive vice president and chief financial officer of Constellation. "We remain focused on integrating Calpine, capturing the value of our expanded fleet and investing in opportunities that generate attractive returns. With a strong balance sheet, a differentiated customer facing business, and a generation portfolio well positioned to serve increasing demand for reliable energy, we are well positioned to deliver on our growth commitments and create sustained value for our owners." Second Quarter 2026 Our GAAP Net Income for the second quarter of 2026 decreased to $1.42 per share from $2.67 per share in the second quarter of 2025. Adjusted (non-GAAP) Operating Earnings for the second quarter of 2026 increased to $2.55 per share from $1.91 per share in the second quarter of 2025. For the reconciliations of GAAP Net Income (Loss) to Adjusted (non-GAAP) Operating Earnings, refer to the GAAP/Adjusted (non-GAAP) Operating Earnings Reconciliation section below. Adjusted (non-GAAP) Operating Earnings in the second quarter of 2026 primarily reflects: The addition of Calpine and favorable market and portfolio conditions, partially offset by unfavorable nuclear outages Recent Developments and Second Quarter Highlights Progress continues at Crane Clean Energy Center paving way for restart: FERC approved our waiver request to transfer CIRs from the dual fuel Eddystone Units 3 and 4 in Pennsylvania to the Crane Clean Energy Center. This decision clears a critical regulatory hurdle for the plant restart, we expect the transfer to expedite its ability to deliver reliable emissions-free power to the grid. Additionally, the NRC has approved a fuel license amendment request for the Crane Clean Energy Center — a major milestone moving us closer to restarting operations in 2027. Helping our customers meet their evolving energy needs: We have signed an additional 920 megawatts (MW) of long-term power purchase agreements (PPA) for clean, reliable nuclear generation with a diverse set of investment grade customers. These agreements are for 15-20 years in duration and are set to begin in 2029 through 2032. Among these PPAs, our 176 MW agreement with Walmart will enable a 30 MW capacity expansion at our Dresden Clean Energy Center in Illinois and facilitate additional investments to strengthen the local community by supporting jobs and enabling continued expansion of operations and workforce. Agreement to divest the Brazos Valley Energy Center: In August 2026, we entered into an agreement with LS Power to divest the Brazos Valley Energy Center (f/k/a Jack A. Fusco Energy Center), a 606 MW natural gas-fired plant in ERCOT for $860 million before closing adjustments, a key step in satisfying regulatory commitments related to our acquisition of Calpine earlier this year. This marks the last asset sale required by our regulatory commitments under the acquisition. Closing of the sale is subject to the receipt of approval by the DOJ, and other customary closing conditions. We expect the transaction to close by the end of this year. License renewal applications for two New York nuclear units: We have filed license renewal applications with the NRC to extend the operations of the Ginna Clean Energy Center and the Nine Mile Point Unit 1 reactor in upstate New York to 2049. If approved, the units' operating licenses would be extended 20 years, to 2049. Nine Mile Point Unit 2 is currently licensed to operate until 2046. Recognized for our culture: For the fourth year in a row we were Certified™ by Great Place to Work®. The designation is based on how our employees rate their experience working at Constellation. In a survey of about 5,000 of our employees, 83% of those who responded said it is a great place to work – about 26 points higher than the average U.S. company. Great Place to Work® is acknowledged worldwide as a global benchmark for workplace culture, employee experience and the leadership behaviors proven to deliver strong market performance, employee retention and increased innovation.For the second year in a row we were recognized as one of the Civic 50® and as the energy sector leader by Points of Light. The Civic 50® is a well-respected standard for corporate social impact, recognizing the most community-minded companies in the U.S. for how they show up through employee volunteerism, community investment and broader social impact efforts.We were recognized as a World’s Top Disability Inclusive Business based on our performance on the Disability Index®, the leading benchmark for disability inclusion. This recognition signifies that we’re a leading performer in disability inclusion, accessibility and workplace practices. It's also a reflection of our commitment to fostering an environment where all employees can do their best work, advance their careers and feel a true sense of belonging. Nuclear Operations: Our nuclear fleet, including our owned output from the Salem and South Texas Project (STP) Generating Stations, produced 44,160 gigawatt-hours (GWhs) in the second quarter of 2026, compared with 45,170 GWhs in the second quarter of 2025. Excluding Salem and STP, our nuclear plants at ownership achieved a 93.0% capacity factor for the second quarter of 2026, compared with 94.8% for the second quarter of 2025. There were 86 planned refueling outage days in the second quarter of 2026 and 41 in the second quarter of 2025 for sites we operate. There were 20 non-refueling outage days in the second quarter of 2026 and 22 in the second quarter of 2025 for sites we operate. Natural Gas, Oil, and Renewables Operations: As a result of our expanded fleet following the acquisition of Calpine in January 2026, we now consider Equivalent Forced Outage Factor (EFOF) to be a key operational metric beginning in 2026. EFOF represents the percentage for which a generating unit is not available due to forced outages and forced deratings in a given period. The EFOF of our natural gas, oil, and pumped-storage hydro fleet for the second quarter of 2026 is 6.2%. Renewable energy capture for our wind, solar and run-of-river hydro fleet was 96.0% in the second quarter of 2026, compared with 96.1% in the second quarter of 2025. GAAP/Adjusted (non-GAAP) Operating Earnings Reconciliation The table below provides a reconciliation of GAAP Net Income to Adjusted (non-GAAP) Operating Earnings. Adjusted (non-GAAP) Operating Earnings is not a standardized financial measure and may not be comparable to other companies’ presentations of similarly titled measures. 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, which may result in an effective tax rate that differs from the marginal rate. The marginal statutory income tax rate was 25.5% for the three months ended June 30, 2026 and 2025. The following table provides a reconciliation between GAAP Net Income (Loss) Attributable to Common Shareholders and Adjusted (non-GAAP) Operating Earnings for the three months ended June 30, 2026 compared to the same period in 2025. Webcast Information We will discuss second quarter 2026 earnings in a conference call scheduled for today at 10:00 a.m. Eastern Time. The webcast and associated materials can be accessed at https://investors.constellationenergy.com. About Constellation Constellation Energy Corporation (Nasdaq: CEG), a Fortune 200 company headquartered in Baltimore, is the largest private-sector power producer in the world and the nation’s largest producer of clean and reliable energy. With 55 gigawatts of capacity from nuclear, natural gas, oil, geothermal, hydro, wind and solar facilities, our fleet has the generating capacity to power the equivalent of 27 million homes, providing about 10% of the nation’s clean energy and delivering the around-the-clock reliability needed to power America’s growing economy. We are also the largest nuclear energy company in the U.S. and a leading competitive retail supplier, serving approximately 2.5 million customer accounts nationwide, including 80% of the Fortune 100. We are committed to investing in innovation and new technologies to drive the transition to a reliable, sustainable and secure energy future. Follow Constellation on LinkedIn and X. Non-GAAP Financial Measures We utilize Adjusted (non-GAAP) Operating Earnings (and/or its per share equivalent) in our internal analysis, and in communications with investors and analysts, as a consistent measure for comparing our financial performance and discussing the factors and trends affecting our business. The presentation of Adjusted (non-GAAP) Operating Earnings is intended to complement and should not be considered an alternative to, nor more useful than, the presentation of GAAP Net Income (Loss). The tables above provide a reconciliation of GAAP Net Income (Loss) to Adjusted (non-GAAP) Operating Earnings. Adjusted (non-GAAP) Operating Earnings is not a standardized financial measure and may not be comparable to other companies’ presentations of similarly titled measures. Due to the forward-looking nature of our Adjusted (non-GAAP) Operating Earnings guidance, we are unable to reconcile this non-GAAP financial measure to GAAP Net Income (Loss) given the inherent uncertainty required in projecting gains and losses associated with the various fair value adjustments required by GAAP. These adjustments include future changes in fair value impacting the derivative instruments utilized in our current business operations, as well as the debt and equity securities held within our nuclear decommissioning trusts, which may have a material impact on our future GAAP results. Cautionary Statements Regarding Forward-Looking Information This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. Words such as "could," "may," "expects," "anticipates," "will," "targets," "goals," "projects," "intends," "plans," "believes," "seeks," "estimates," "predicts," and variations on such words, and similar expressions that reflect our current views with respect to future events and operational, economic, and financial performance, are intended to identify such forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding the acquisition of Calpine Corporation, the pro forma combined company and its operations, strategies and plans, enhancements to investment-grade credit profile, synergies, opportunities and anticipated future performance and capital structure, and expected accretion to earnings per share and free cash flow. Information adjusted for the acquisition should not be considered a forecast of future results. Forward-looking statements are based on current expectations, estimates and assumptions that involve a number of risks and uncertainties that could cause actual results to differ materially from those projected. The factors that could cause actual results to differ materially from the forward-looking statements made by Constellation Energy Corporation and Constellation Energy Generation, LLC, (the Registrants) include those factors discussed herein, as well as the items discussed in (1) the Registrants' 2025 Annual Report on Form 10-K in (a) Part I, ITEM 1A. Risk Factors, (b) Part II, ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and (c) Part II, ITEM 8. Financial Statements and Supplementary Data: Note 18 — Commitments and Contingencies; (2) the Registrants' Second Quarter 2026 Quarterly Report on Form 10-Q (to be filed on August 6, 2026) in (a) Part II, ITEM 1A. Risk Factors, (b) Part I, ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and (c) Part I, ITEM 1. Financial Statements: Note 15 — Commitments and Contingencies; and (3) other factors discussed in filings with the SEC by the Registrants. Investors are cautioned not to place undue reliance on these forward-looking statements, whether written or oral, which apply only as of the date of this press release. Neither Registrant undertakes any obligation to publicly release any revision to its forward-looking statements to reflect events or circumstances after the date of this press release. View source version on businesswire.com: https://www.businesswire.com/news/home/20260805185047/en/ Contacts Linsey WisniewskiCorporate Communications667-218-7700 Tim FlottemeschInvestor Relations833-447-2783

Constellation Energy Corporation CEG reported second-quarter 2026 adjusted operating earnings of $2.55 per share, up 33.5% year over year. The figure beat the Zacks Consensus Estimate of $2.36 by 8.05%, aided by the Calpine contribution and favorable market and portfolio conditions.Adjusted operating earnings increased to $920 million from $599 million a year earlier. The improvement reflected the addition of Calpine, higher capacity revenues and strong commercial performance through portfolio optimization and improved realized customer margins.GAAP earnings were $1.42 per share, down from $2.67 in the prior-year quarter, reflecting several non-GAAP adjustments. Revenues increased 23% to $7.50 billion and surpassed the consensus estimate of $7.47 billion by 0.48%. Nuclear output totaled 44,160 gigawatt-hours (GWh), down from 45,170 GWh in the year-ago quarter. Constellation Energy Corporation price-consensus-eps-surprise-chart | Constellation Energy Corporation Quote Total operating expenses rose 34.5% year over year to $6.93 billion. Purchased power and fuel expenses increased 28.4% to $4.02 billion, while operating and maintenance costs climbed 39.3% to $2.25 billion.Depreciation and amortization expenses advanced 74.4% to $443 million. Consequently, operating income declined 39% to $580 million from $951 million in the second quarter of 2025. Net interest expenses increased to $283 million from $118 million. Excluding Salem and the South Texas Project, CEG’s nuclear plants recorded a capacity factor of 93% compared with 94.8% a year earlier. The company experienced 86 planned refueling outage days, up from 41 days in the prior-year period.Non-refueling outage days declined to 20 from 22. The average nuclear refueling outage lasted 23 days, 40% below the 2025 industry average of 38 days. The quarter also included the successful turbine uprate at Byron Clean Energy Center’s Unit 1. Constellation Energy signed about 920 megawatts (“MW”) of long-term nuclear power purchase agreements with investment-grade customers. The contracts have an average duration of 18.5 years, begin between 2029 and 2031 and are expected to be fully ramped by 2032.The agreements include 890 MW of existing generation. A customer commitment will also support a 30-MW uprate at the Dresden Clean Energy Center. The company expects about 30% of its baseload clean-generation megawatt-hours to be covered by long-term agreements by 2032. Federal Energy Regulatory Commission approved the transfer of existing Capacity Interconnection Rights to the Crane Clean Energy Center, while the Nuclear Regulatory Commission approved the facility’s fuel license amendment. These steps support Constellation’s plan to restart Crane in 2027.CEG also agreed to sell the 606-MW Brazos Valley Energy Center to LS Power for $860 million before closing adjustments. The transaction, expected to close by year-end subject to approvals, would satisfy the final asset-sale requirement tied to the Calpine acquisition. Constellation raised its 2026 adjusted operating earnings guidance to $11.50-$12.50 per share from the prior range of $11-$12. The revised outlook assumes average diluted shares outstanding of 357 million. The Zacks Consensus Estimate for 2026 earnings per share is currently pegged at $11.72.As of June 30, 2026, cash and cash equivalents were $697 million compared with $3.64 billion at the end of 2025. Long-term debt increased to $19.11 billion from $7.25 billion. Operating cash flow for the first six months totaled $1.55 billion, while capital expenditures were $2.52 billion. The company deployed about $2.2 billion year to date toward share repurchases. Constellation has a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Murphy Oil Corporation MUR reported second-quarter 2026 adjusted earnings of $1.55 per share, up 474.1% year over year. The figure topped the Zacks Consensus Estimate of $1.51 by 2.7%.Revenues of $928.3 million increased 33.5% and beat the consensus estimate of $871 million by 6.5%. Higher commodity prices and solid operating execution supported the results. Occidental Petroleum Corporation OXY reported second-quarter 2026 adjusted earnings of $2.40 per share, surging 823.1% year over year and beating the Zacks Consensus Estimate of $1.92 by 25%. Total revenues for the second quarter were $57.1 billion, which increased from the year-ago reported figure of $47.9 billion by 27.8%. The metric lagged the Zacks Consensus Estimate of $60.18 billion by 5.13%.Devon Energy Corporation DVN reported second-quarter 2026 adjusted earnings of $1.57 per share, beating the Zacks Consensus Estimate of $1.30 by 20.77%. Revenues climbed 57.1% to $8.33 billion and surpassed the Zacks Consensus Estimate of $7.18 billion by 16%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Constellation Energy Corporation (CEG) : Free Stock Analysis Report Devon Energy Corporation (DVN) : Free Stock Analysis Report Occidental Petroleum Corporation (OXY) : Free Stock Analysis Report Murphy Oil Corporation (MUR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research