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News & Events
Constellation Energy Reports Strong Quarterly Earnings:
04/28/2004
Constellation Energy (NYSE: CEG) today reported earnings per share for the three months ending March 31, 2004 of $0.66 excluding special items, an increase of 83% compared to earnings per share of $0.36 excluding special items in the same period last year. These results were within the company's earnings guidance range provided on January 30, 2004, of $0.55 to $0.70 per share. Including special items of ($0.27) per share related to the sale of its Hawaiian geothermal facility, Constellation earned $0.39 per share for the three months ending March 31, 2004. The company also raised its guidance range for 2004 earnings excluding special items by $0.05 per share to $3.05 to $3.20 per share. "This is the tenth consecutive quarter in which this management team has met or exceeded earnings guidance. Constellation continues to execute as planned, turning in another strong quarterly performance despite extreme January weather conditions in the northeast and volatile commodity markets during the first quarter of 2004," said Mayo A. Shattuck III, Constellation Energy's chairman, president and chief executive officer. "Through an exceptional performance in our wholesale load business, including winning almost one-third of the load up for bid in the recent Mid-Atlantic auctions, we have meaningfully added to our backlog of future earnings and overall earnings visibility. We also continued to optimize our generation fleet, divesting a non-core legacy asset. The renegotiation and extension of our ownership stake in a South Carolina synfuel facility creates significant value for our shareholders. These actions result in an improved earnings outlook for the year. Accordingly, we are raising earnings guidance for 2004 by five cents to a range of $3.05 to $3.20 per share. We continue to believe that, as our reputation for earnings consistency and operational execution builds, our investors should benefit from our unique combination of earnings growth and stability." For the first quarter of 2004, our merchant energy business earned $0.23 per share. These results were in line with our January earnings guidance and compared favorably to a loss excluding special items of ($0.12) per share during the first quarter of 2003. Factors contributing to the year-over-year quarterly increase in 2004 results include: less outage time at our Calvert Cliffs Nuclear Power Plant which replaced the steam generator in unit 2 in the first quarter of 2003; growth in our competitive supply business; earnings from our California High Desert Plant which began operations in the second quarter of 2003; the absence of the unfavorable impact related to economic hedges which did not qualify for hedge accounting treatment in the first quarter of 2003 and the favorable impact of hedge ineffectiveness in the first quarter of 2004; and, earnings from our South Carolina synfuel plant's first quarter 2004 production (see addendum for discussion of treatment of South Carolina synfuels). These favorable items were partially offset by costs at our Nine Mile Point nuclear facility primarily associated with our planned January outage and inflationary and other cost increases. "Results in recent competitive auctions demonstrate that our investment in marketing talent and technology is paying off. In wholesale competitive auctions where price is a key determinant of success, we won significant load volumes while maintaining our historic margins," said Shattuck. "We were also able to lock in prices for most of the output of our Mid-Atlantic fleet through 2006 at very attractive levels. We remain committed to maintaining a highly hedged commodity profile in the near term. This positioning means that our results will be driven by competitive supply success and operational effectiveness rather than commodity price volatility." The March 2004 Financial Statements and selected supplemental information are attached. Earnings Excluding Special Items Constellation Energy presents earnings excluding special items in addition to its reported earnings per share in accordance with generally accepted accounting principles (reported GAAP EPS). Earnings excluding special items is a non-GAAP financial measure that differs from reported GAAP EPS because it excludes the cumulative effects of changes in accounting principles, losses from discontinued operations, gains or losses on the sale of non-core assets, and other special items (which we define as items that are not related to our ongoing, underlying business or which distort comparability of results) included in operations. We present earnings excluding special items because we believe that it is appropriate for investors to consider results excluding these items in addition to our results in accordance with GAAP. We believe such a measure provides a picture of our results that is comparable among periods since it excludes the impact of items such as gains or losses on sales of non-core investments and workforce reduction costs, which may recur occasionally, but tend to be irregular as to timing, thereby distorting comparisons between periods. However, investors should note that these non- GAAP measures involve judgments by management (in particular, judgments as to what is or is not classified as a special item). These non-GAAP measures are also used to evaluate management's performance and for compensation purposes. Constellation Energy also provides its earnings guidance in terms of earnings excluding special items. Constellation Energy is unable to reconcile its 2004 earnings guidance excluding special items to GAAP earnings per share because we do not predict the future impact of special items due to the difficulty of doing so. The impact of special items could be material to our operating results computed in accordance with GAAP. SEC Filings The Company plans to file its Form 10-Q for the three months ended March 31, 2004 on or about May 7, 2004. Forward-Looking Statements We make statements in this news release that are considered forward- looking statements within the meaning of the Securities Exchange Act of 1934. These statements are not guarantees of our future performance and are subject to risks, uncertainties, and other important factors that could cause our actual performance or achievements to be materially different from those we project. For a full discussion of these risks, uncertainties, and factors, we encourage you to read our documents on file with the Securities and Exchange Commission, including those set forth in our Form 10-K under the forward- looking statements section. Conference Call April 28, 2004 Constellation Energy will host a conference call at 8 a.m. Eastern Daylight Time on April 28, 2004, to review its results. To participate, investors, analysts, and members of the media in the United States may dial 1-800-862-9098 shortly before 8 a.m. The international dial-in number is 1-785-424-1051. The conference call host is Constellation Energy, and the password is CEG. A replay of the call will be available for one week. The replay number is 1-800-753-4652; the number for international callers is 1-402-220-4235. A live audio webcast of the conference call, as well as presentation slides and the first quarter 2004 earnings press release will be available on the Investor Relations page of the company Web site, www.constellation.com. The reference to our Web site is an active textual reference and the contents of our Web site are not part of this press release. Constellation NewEnergy, a member of Constellation Energy (NYSE: CEG), is a leading competitive supplier of electricity, natural gas and energy related services to commercial and industrial customers throughout North America. Constellation NewEnergy operates in all competitive energy markets throughout Canada and the United States, providing products that enable customers to effectively manage and control energy costs. Constellation NewEnergy's regional expertise coupled with its national presence provide customers with customized energy products and services while leveraging the assets of one of the strongest integrated energy companies in North America. Constellation NewEnergy, based in Baltimore, serves more than 8,000 commercial and industrial customers throughout 31 states and 3 Canadian provinces representing more than 12,000 megawatts of peak load and more than 300 billion cubic feet of annual natural gas consumption. Constellation Energy, a FORTUNE 200 company based in Baltimore, is the nation's largest competitive supplier of electricity to large commercial and industrial customers and the nation's largest wholesale power seller. Constellation Energy also manages fuels and energy services on behalf of energy intensive industries and utilities. It owns a diversified fleet of more than 100 generating units located throughout the United States, totaling approximately 12,000 megawatts of generating capacity. The company delivers electricity and natural gas through the Baltimore Gas and Electric Company (BGE), its regulated utility in Central Maryland. In 2004, the combined revenues of the integrated energy company totaled $12.5 billion. |
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