Constellation Reports "Strong" Results In Commercial Business, Drivers More Than Offset Higher Residential Bad Debt

Constellation Energy Corporation today reported financial results for the third quarter of 2022

In doing so, Dan Eggers, chief financial officer of Constellation, said, "The commercial business continues to post better-than-expected results."

"Strong" results in the commercial business (which includes wholesale and retail) reflected favorability in the 2022 third quarter from customer load serving obligations, effective portfolio management, and successful load auctions. Constellation said that this favorability more than adsorbed the drag from (1) margin shaping issues in retail contracts that resulted in 2022 headwinds for fixed price customer contracts, "that have compelling economics over the term of the contract," and (2) higher bad debt expense from residential customers

On a consolidated basis, Constellation reported Adjusted EBITDA for the third quarter of 2022 of $592 million, down from $967 million in the third quarter of 2021, due to decreased capacity revenues, increased labor, contracting and material costs and the absence of gains on CTV investments realized in the prior year.

Partially offsetting these negative drivers were, "Effective portfolio management through summer volatility and successful load auction wins," Constellation said

Constellation reported Q3 2022 Electric Retail Load Served by Region (TWh) as follows:

Midwest                          10
Mid-Atlantic                     12
ERCOT                             4
New York                          4
Other/New England/South/West      9

Constellation narrowed its guidance range for full year 2022 Adjusted EBITDA (non-GAAP) from $2,350 million - $2,750 million to $2,450 million - $2,650 million

Constellation reported that its issuer credit rating was upgraded by Standard & Poor’s (S&P) from BBB- to BBB while maintaining positive outlook