Constellation Energy beats profit estimates on robust power demand

Aug 7 (Reuters) - Major U.S. power company Constellation Energy CEG.O on Thursday beat Wall Street estimates for second-quarter adjusted profit, helped by rising power demand from data centers and lower interest expenses.

Independent power companies like Constellation have reaped the benefits of record high electricity demand, which is being propelled further by the expansion of Big Tech's energy-intensive data centers.

Over the year, Constellation has signed long-term power agreements for data centers owned by giant technology companies, including with Meta META.O and a separate agreement with Microsoft MSFT.O that will involve re-opening the former Three Mile Island nuclear power plant in Pennsylvania.

The company is in ongoing talks with data center developers about striking similar deals, Constellation CEO Joe Dominguez said on an earnings call.

"We're seeing a continued acceleration of interest," Dominguez said.

Constellation, which is the country's biggest operator of nuclear power plants, is in the process of expanding its natural gas-fired power plant fleet.

In January, Constellation agreed to buy natural gas and geothermal company Calpine for $16.4 billion, marking one of the biggest U.S. power industry acquisitions.

The deal has received regulatory approvals from states and the Federal Energy Regulatory Commission (FERC) for its previously announced $16.4 billion acquisition of Calpine Corporation.

It is awaiting the go-ahead from the Department of Justice.

"I'm hopeful we will get the last one shortly," Dominguez said.

Constellation's total operating expenses rose 17.7% to $5.15 billion in the April-June quarter, compared with $4.38 billion a year earlier.

The company's nuclear fleet produced 45,170 gigawatt-hours (GWh), down from 45,314 GWh a year ago, due to higher non-refueling outage days compared to last year.

Constellation Energy said it expects to see continued bipartisan legislative support for nuclear energy.

U.S. President Donald Trump in May signed executive orders directing the nation's independent Nuclear Regulatory Commission to cut down on regulations and fast-track new licenses for reactors and power plants.

Constellation Energy reported total quarterly operating revenue of $6.10 billion, up from $5.48 billion a year earlier. Analysts, on average, had expected $4.83 billion, according to data compiled by LSEG.

Its interest expenses fell to $118 million from $142 million.

The Baltimore, Maryland-based utility posted an adjusted profit of $1.91 per share for the three months ended June 30, compared with analysts' average estimate of $1.85.