Constellation Energy Group?s financial performance stacks up well against regional utilities, although such comparisons are not easy to make.
“Energy companies in regulated markets cannot be fairly compared to those operating in unregulated markets,” said Horacio Marquez, an utility analyst with Baltimore-based Investmentu.com.
“Depreciation is also a big factor to consider when comparing utility companies,” he said.
Because energy companies can write off millions in yearly depreciation for power plants and equipment, unless they are writing off the same amounts, an accurate comparison is difficult.
Mark Sadeghian, a utility analyst with Chicago-based Morningstar Inc., said one measure of a company?s potential is its revenue growth rate over a period of time.
Constellation has scored well in this category.
Its average revenue growth rate for the past five years is 11.93 percent, according to Dow Jones Inc. This is better than the 10.90 percent five-year revenue growth for its merger partner, Florida-based FPL Group, and easily beats the 2.75 percent revenue growth rate over the same period for Allegheny Energy Inc., based in Greensburg, Pa.
Still, Washington-based Pepco Holdings Inc. ranked highest with an average five-year revenue growth of 21.96 percent.
Another way to compare the efficiency of energy companies is look at the average income generated by each employee, Marquez said.
“A lower number can reflect less efficiency and higher costs,” Marquez said, but it can also mean the company is expanding and hiring more workers.
Each Constellation employee generated about $62,481 income for fiscal 2005, according to DowJones Inc. The income per employee for FPL was $80,601 during the same period, while Allegheny?s income per employee was $15,845. Pepco?s income per employee was $65,379 for fiscal 2005.
