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Friday, October 29, 2010

Constellation Energy Group Has 3Q Loss of $1.4 Billion

Constellation Energy Group reported a net loss of $1.4 billion after taking large write-downs to reflect the reduced value of its nuclear power business and its new nuclear development venture which it abandoned this week. The loss was $6.99 per share in the three months ending Sept. 30, compared with a profit of $137.6 million, or 69 cents per share, in the year-ago period.

Also earlier this week, Constellation and EDF agreed to a deal that gives EDF full ownership of its new nuclear development called Unistar, which is seeking to build a third reactor at Calvert Cliffs. Constellation withdrew from negotiations with the Department of Energy over a federal loan guarantee deemed crucial for the $9.6 billion project. Constellation took a write-down of $86.3 million, or 43 cents per share, for its Unistar investment.

Under the agreement reached with EDF on Tuesday, Constellation will sell its 50 percent stake in Unistar nuclear development company to the French company for $140 million. Constellation owns the nuclear plants with its French partner EDF Group, which bought nearly half of that business two years ago amid a financial crisis

Constellation reaffirmed its 2010 earnings guidance range of $3.05 per share to $3.45 per share. (The Baltimore Sun, 10/29/2010)

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