Constellation Energy beats profit estimates on strong power demand

Feb 24 (Reuters) - Major U.S. power company Constellation Energy CEG.O beat Wall Street estimates for fourth-quarter adjusted profit on Tuesday, helped by rising electricity demand from data centers.

Shares of the company rose 1.4% in premarket trading.

After setting a second straight record high in 2025, U.S. power consumption is expected to rise through this year and the next, the Energy Information Administration said in its Short-Term Energy Outlook last month.

Much of the demand surge stems from rapid build-out of data centers for artificial intelligence services and cryptocurrency, besides a shift by homes and businesses toward electric heating and transport.

"With the nation's largest nuclear fleet at the core of our strategy, we're pairing the grid's most reliable power with flexible resources to meet accelerating demand driven by electrification and the data economy," CEO Joe Dominguez said.

Last month, Constellation signed an agreement with Dallas-based CyrusOne to connect and serve a new data center adjacent to the Freestone Energy Center in Texas.

The utility also has agreements with Meta META.O to keep one of its reactors in Illinois operating for 20 years, and with Microsoft MSFT.O to restart a nuclear reactor at a Pennsylvania plant, formerly known as Three Mile Island.

The company's nuclear fleet produced 45,459 gigawatt-hours (GWh), down from 45,494 GWh a year ago, due to higher planned refueling and non-refueling outage days compared with last year.

Constellation closed its $16.4 billion acquisition of natural gas and geothermal company Calpine Corporation in January.

Total quarterly operating revenue was reported at $6.07 billion, from $5.38 billion last year.

However, Constellation's total operating expenses rose 22.3% to $5.48 billion in the October-December quarter, while interest expenses were up 25.6% at $113 million.

The Baltimore, Maryland-based company posted an adjusted profit of $2.30 per share for the three months ended December 31, compared with the average of analysts' estimates of $2.23 per share, according to data compiled by LSEG.