Constellation Raises 2026 Adjusted EPS Outlook After Q3 Earnings Jump

Constellation Energy Corporation (Nasdaq: CEG) raised and narrowed its full-year 2026 adjusted operating earnings guidance after third-quarter profit increased sharply, supported by Calpine’s contribution, commercial performance and higher capacity revenue. The company now expects adjusted operating earnings of $12.50 to $12.80 per share, compared with its previously revised range of $11.50 to $12.50.

For the three months ended Sept. 30, Constellation reported GAAP net income attributable to common shareholders of $1.84 billion, or $5.19 per diluted share, up from $930 million, or $2.97 per share, a year earlier. Adjusted operating earnings rose to $1.79 billion, or $5.06 per share, from $952 million, or $3.04 per share.

The third-quarter per-share figures were based on 354 million average diluted shares, compared with 313 million in the prior-year period. The revised full-year outlook assumes 356 million average diluted shares and has a midpoint of $12.65 per share.

Constellation attributed the full-year outlook to Calpine’s contribution, strong commercial performance and higher capacity revenue, partly offset by lower nuclear production tax credit revenue. For the third quarter, the company said commercial outperformance in a volatile market was partially offset by higher operating and maintenance expense associated with that performance.

Adjusted operating earnings exclude items including unrealized fair-value changes, decommissioning-related activity and Calpine merger and integration costs. Third-quarter adjustments included a $127 million unrealized fair-value gain, $73 million of merger and integration costs and $39 million of amortization related to acquired commodity contracts.

Long-term contracts expand

Constellation said it had entered into about 8,500 megawatts of long-term agreements during the first nine months of 2026. Approximately 4,560 MW was contracted with three customers in the third quarter, including about 270 MW through Peak+, an offering that combines new capacity for peak demand with energy products tailored to customers.

The company said more than 90 million megawatt-hours of expected annual nuclear and geothermal generation are now supported by long-term agreements. Those contracts are expected to cover 45% of its clean baseload fleet by 2032 and extend into the 2040s. Since its March business update, Constellation has signed agreements covering 43 million additional annual MWh.

Management presented the contracts as a way to increase the visibility of base earnings and reduce exposure to market prices. Customers supporting the nuclear agreements also carry relatively strong credit ratings, with 91% rated AA- or better and the remainder rated between BBB+ and A+.

Peak+ is intended to help connect large electricity users while supporting investment in capacity needed during limited periods of peak demand. Constellation cautioned, however, that regulatory rules governing the connection of large loads remain unfinished.

Nuclear fleet supports summer reliability

Constellation’s nuclear fleet recorded a 97.2% capacity factor in the third quarter while completing 20 planned refueling outage days. During the June-through-August summer period, the fleet achieved a 99.2% capacity factor as PJM experienced record peak loads.

The company is also pursuing 1,165 MW of nuclear uprates at an estimated project cost of about $4.3 billion. Targeted additions include 110 MW in 2027 and 2028, 605 MW in 2029 and 2030, and 450 MW in 2031 and 2032. Completion dates remain subject to PJM deliverability requirements.

A conditional $5 billion loan commitment from the U.S. Department of Energy would cover as much as 80% of eligible uprate costs incurred from 2023 through 2035. The financing would have a 30-year tenor at Treasury rates plus 37.5 basis points and could provide approximately $40 million of annual pre-tax savings based on the company’s illustrative assumptions.

About $1.3 billion of uprate investment is already included in Constellation’s 2026 and 2027 growth-capital guidance. The company expects about $3 billion of additional growth capital for uprate projects between 2028 and 2032. It said committed projects require little or no incremental fuel or operating and maintenance expense.

Capital deployment and longer-term targets

Constellation deployed about $3 billion on share repurchases during the first nine months of the year, buying approximately 11 million shares. About $2 billion remains under its $5 billion authorization.

The company also entered into an agreement to acquire the Rhode Island State Energy Center, a 609 MW combined-cycle natural gas plant. The presentation did not provide financial terms or a closing timetable.

Constellation maintained its target for more than 20% base earnings-per-share growth through 2029 and a longer-term goal of at least 10% growth over rolling three-year periods. Its 2029 outlook includes announced nuclear and natural-gas offtake agreements, a nuclear production tax credit based on 2% inflation, average commercial margins and current forward market-price expectations. It excludes potential contributions from additional long-term contracts, higher gas-plant utilization, wider commercial margins and future capital allocation.

The company reported $19.5 billion of total long-term debt as of Sept. 30, including $14.5 billion associated with Constellation and $4.9 billion associated with Calpine. It maintained a targeted debt-to-EBITDA range of 2.00 to 2.25 times and cited $14 billion of credit facilities.

Constellation’s outlook remains exposed to commodity-price movements, commercial margins, nuclear tax-credit revenue, plant performance and the execution of long-term contracts and growth investments. The company also noted uncertainties involving the Calpine integration, regulatory decisions and the timing and deliverability of nuclear uprates. Its forward-looking non-GAAP guidance cannot be reconciled with comparable GAAP measures because future fair-value changes in derivatives and nuclear decommissioning trust assets cannot be reliably projected.