Constellation Energy shares slide as regulatory decision outpaces earnings decline

Shares of Constellation Energy (CEG) plunged Monday morning despite an earnings beat as a recent regulatory decision weighed on nuclear energy stocks.

Visible Alpha estimates Constellation posted third-quarter revenue of $6.55 billion, up about 7% from a year ago and about $1 billion above analysts’ expectations. Profit also rose compared to the same period last year, almost doubling analyst estimates at $1.2 billion.

The company also raised the low end of its forecast range for full-year adjusted earnings per share (EPS), expecting it to be between $8.00 and $8.40, up from $7.60 to $8.40 US dollars previously.

Talen, Amazon denial slows nuclear stocks

However, shares of Constellation fell about 8% on Monday morning despite the earnings decline, as a decision by the Federal Energy Regulatory Commission on Friday raised concerns about the nuclear energy industry. The agency ruled against a partnership between Amazon (AMZN) and Talen Energy (TLN) that would result in an Amazon data center receiving additional power from a nearby Talen nuclear facility Reuters.

The members of the committee, Reuters reported that the agreement could restrict electricity and increase prices for residents of surrounding areas. Talen, Constellation and other nuclear stocks fell on Monday as markets grappled with questions about whether nuclear partnerships with Big Tech companies can survive similar challenges.

Constellation last month announced a deal with Microsoft (MSFT) to restart a unit of the Three Mile Island nuclear power plant in Pennsylvania to power Microsoft’s data centers and artificial intelligence (AI) efforts.

Shares of Constellation and Talen each fell at market open, but have still doubled in value since the start of 2024.