Constellation Energy (CEG) Q2 2024 earnings summary

Executive summary

• Q2 2024 GAAP EPS was $2.58 and adjusted operating EPS was $1.68, reflecting strong commercial and nuclear performance, with full-year adjusted operating earnings guidance raised to $7.60–$8.40 per share.

• Net income attributable to common shareholders was $814 million for Q2 2024; six-month net income rose to $1.70 billion, up $768 million year-over-year.

• $1 billion in share buybacks completed year-to-date, $2 billion since program inception, with $1 billion remaining authorized; share repurchase program expanded to $3 billion.

• Released 2024 Sustainability Report, signed new 24/7 carbon-free energy contracts, and achieved Great Place To Work® certification for the second consecutive year.

• Strategic focus on data center opportunities and ongoing negotiations, with strong customer interest and support from policymakers and utilities.

Financial highlights

• Q2 2024 GAAP Net Income was $814 million ($2.58/share); Adjusted Operating Earnings were $531 million ($1.68/share), nearly flat year-over-year.

• Q2 2024 operating revenues were $5.48 billion, nearly flat year-over-year; six-month revenues declined 10.6% to $11.64 billion.

• Enhanced gross margin outlook for 2024 raised by $450 million, with commercial margins above long-term averages.

• Purchased power and fuel expense fell 20.6% in Q2, mainly due to lower energy prices and favorable hedging.

• Effective tax rate for Q2 2024 was 16.0%, down from 29.2% in Q2 2023, reflecting non-taxable nuclear PTCs and state tax benefits.

Outlook and guidance

• Full-year 2024 adjusted operating earnings guidance raised to $7.60–$8.40 per share, reflecting strong commercial performance and higher margins.

• Long-term base EPS growth projected at 10%+ CAGR from 2024–2028, supported by the federal nuclear PTC and organic growth.

• Enhanced earnings expected from higher capacity prices in the 2025/2026 PJM auction, with estimated EPS uplift of $0.25 in 2025 and $1.25 in 2026.

• Nuclear PTCs under the IRA are expected to provide significant recurring revenue through 2032, with $712 million recognized in the first half of 2024.

• Management expects sufficient liquidity from operating cash flows, credit facilities, and capital markets to meet future obligations.