Biggest Deal in the Company's History! Energy Producer Signs 20-Year Electricity Contract With Microsoft. Nuclear Reactor Must be Reconnected to the Grid
In today's screening, the "Utilities" sector shot up from mid-table to second place. Consumers reached the top position thanks to the sector leader from the "Utilities - Renewable" sector (+26.89 %). Where did Constellation Energy's rapid rise come from? We get to the bottom of the story. Constellation Energy is the largest producer and supplier of clean electricity 20-year power contract signed with Microsoft for data centers Energy consumption will double by 2026 due to AI boom Constellation Energy Corp. (CEG)...
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'post_content' => 'In today\'s screening, the "Utilities" sector shot up from mid-table to second place. Consumers reached the top position thanks to the sector leader from the "Utilities - Renewable" sector (+26.89 %). Where did Constellation Energy\'s rapid rise come from? We get to the bottom of the story.
- Constellation Energy is the largest producer and supplier of clean electricity
- 20-year power contract signed with Microsoft for data centers
- Energy consumption will double by 2026 due to AI boom
Constellation Energy Corp. (CEG) is the nation\'s largest producer of reliable, clean, carbon-free energy in the United States and a leading provider of electricity and energy services to millions of homes, institutional customers and businesses. Founded in 1999 as a holding company and headquartered in Baltimore, Maryland, the company has a current market capitalization of $80.58 billion. The expected P/E ratio for 2024 is 32.21 with a P/S ratio of 3.63.
Constellation Energy aims to operate the largest fleet of clean, zero-emission power generation facilities and build them to the highest standards of safety, reliability and resilience. Constellation Energy now powers more than 20 million homes and businesses through its fleet of power plants and is helping to accelerate the transition to clean energy with more than 32,400 MW of capacity and 90% carbon-free annual output. It aims to eliminate 100% of greenhouse gas emissions by 2040 by using innovative technologies and improving its diverse mix of nuclear, wind, solar, natural gas and hydroelectric resources. Three quarters of FORTUNE 100 listed companies already rely on electricity generated by Constellation Energy to achieve their environmental goals.
Earnings forecast adjusted upwards and share buybacks for $500 million
On August 6, Constellation Energy published its annual report for the second quarter of 2024. At $5.475 billion, revenue was slightly higher than in the same quarter of 2023. Earnings per share of $2.58 were also only slightly higher than the previous year\'s figure of $2.56. The forecasts for the full year 2024 have been adjusted upwards. Earnings of $7.60-8.40 per share are now expected instead of the previous $7.23-8.03. Shares worth $500 million were bought back in the second quarter. This brings the total buybacks since 2023 to $2 billion.
Microsoft buys electricity for 20 years - nuclear reactor to be reconnected to the grid
On Friday, September 20, 2024, Microsoft (MSFT) and Constellation Energy announced a 20-year agreement for the supply of electricity for data centers. This largest power purchase agreement for Constellation Energy includes bringing the undamaged Unit 1 of the Three Mile Island nuclear power plant near Middletown, Pennsylvania, which was closed in 2019 for economic reasons, back online. Constellation Energy estimates that it will spend about $1.6 billion by early 2028 to bring the reactor back online. Three Mile Island, which suffered a meltdown in 1979 and stirred public sentiment against nuclear power, requires licenses from the Nuclear Regulatory Commission to operate.
AI boom requires huge amounts of additional energy
The planned restart of the nuclear power plant is a sign that AI technology has become a driving force behind the growing demand for electricity. Global energy consumption is set to double by 2026, according to the International Energy Agency. Amazon has already purchased the nuclear-powered data center "Cumulus Data" from Talen Energy for $650 million this year.
The share price rose by 22% on high volume to a new record high.
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