Onetime losses and higher costs drove down Constellation Energy Group?s first-quarter income and earnings according to company executives who said they look to move Maryland?s energy debate forward following a settlement with the state signed into law last month.
Constellation on Wednesday reported a first-quarter net income of $145.7 million, or 81 cents per share, down 25.5 percent from $195.7 million, or $1.07 per share, during the same period last year. First-quarter revenues fell 6 percent to $4.8 billion from $5.1 billion last year.
Constellation stock closed Wednesday down $1.66, or 1.92 percent, to $84.65 per share.Constellation subsidiary Baltimore Gas and Electric saw its earnings increase to 41 cents per share from 36 cents per share during the first quarter of 2007.
Constellation?s largest losses were in its merchant energy business, which sells electricity in nonregulated markets. Earnings in that sector fell 40 percent to 40 cents per share, down from 67 cents per share last year.
Chief Financial Officer John Collins attributed the slide to defaults of two of the company?s coal suppliers, higher interest costs, and recession worries pushing some commercial and industrial customers into month-to-month, rather than long-term, contracts.
Last month, Gov. Martin O?Malley signed into a law a settlement with Constellation that ended a state agency?s investigation into the company in exchange for a onetime $170 credit to all BGE ratepayers.
Constellation President and CEO Mayo Shattuck said the settlement gave meaningful gains to all parties and ended the company?s dispute with the state.
“At Constellation we fully recognize that the expression of many different views and concerns about Maryland?s future energy policy will continue and is likely to spark rather intensive debates,” Shattuck said. “However, we are confident that we can go about these discussions in a constructive manner now that the past has been laid to rest.”
Constellation?s earnings fell within analysts? expectations, according to Paul Justice, an analyst with Chicago-based investment research firm Morningstar.
“The good point brought up by Constellation is that energy prices haven?t gone up as much as some other commodities,” he said. “Combined with limited generation ability, that could lead to higher energy prices down the road, which would be good for Constellation.”
