Constellation Energy Group, Inc. (NYSE:CEG) missed analysts’ estimates by a mile.
Fourth quarter EPS was $0.03 compared Wall Street consensus estimates of $1.24. For the full year, Constellation was expected to earn $4.84, but came in at $3.54. Revenue for the fourth quarter was lower than a year ago by about $400 million, and annual revenue was down by about $1.38 billion. Not a very good showing.
On a GAAP basis, the merger dance with Berkshire Hathaway Inc.(NYSE:BRKA) subsidiary Mid-American Holdings and Electricite de France cost shareholders $6.72/share for 2008. Constellation also took an impairment charge of $3.04/share on its upstream properties, merchant energy goodwill, and “other investments adversely impacted by events in the financial markets.”
Going forward, the company set EPS guidance for 2009 at $2.90-$3.20, and for 2010 at $3.05-$3.45. According to MarketWatch, the average estimate for 2009 EPS is $3.30. Constellation expects the EDF deal to close in the third quarter of this year. The earlier sales of its international commodities unit and its gas trading platform in Houston are expected to close in the second quarter.
Constellation apparently believes that it has positioned itself for the coming year by shedding all that value in the fourth quarter. That seems counter-intuitive, but maybe its right. The stock is trading up more than 2.5% in pre-open trading.
Paul Ausick
February 18, 2009
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