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Key Takeaways
- Constellation Energy and other nuclear stocks fell Monday as markets reacted to a new decision from regulators.
- A partnership between Amazon and Talen was rejected by regulators who said it could raise energy prices for customers in the surrounding area.
- Constellation also reported an earnings beat Monday, as the company will also likely face regulatory questions over its partnership with Microsoft.
Shares of Constellation Energy (CEG) tumbled Monday morning despite an earnings beat as a recent regulatory decision dragged nuclear energy stocks.
Constellation posted $6.55 billion in revenue for the third quarter, up about 7% year-over-year and about $1 billion above what analysts had expected, according to estimates compiled by Visible Alpha. Profits also rose from the same time last year, nearly doubling analyst estimates at $1.2 billion.
The company also lifted the bottom end of its projected range for full-year adjusted earnings per share (EPS), expecting the metric between $8.00 and $8.40, up from $7.60 to $8.40 previously.
Talen, Amazon Denial Drags Nuclear Stocks
However, Constellation shares were down about 8% Monday morning despite its earnings beat as a Friday decision from the Federal Energy Regulatory Commission raised concerns about the nuclear energy industry. The agency ruled against a partnership between Amazon (AMZN) and Talen Energy (TLN) that would see an Amazon data center receive additional power from a nearby Talen nuclear facility, according to Reuters.
The panel’s members, Reuters reported, said the agreement could limit power and raise prices to residents in the surrounding area. Talen, Constellation, and other nuclear stocks fell Monday as markets grappled with whether nuclear partnerships with Big Tech companies can survive similar challenges.
Constellation announced a deal with Microsoft (MSFT) last month to restart one unit of the Three Mile Island nuclear power plant in Pennsylvania to provide power for Microsoft’s data centers and artificial intelligence (AI) efforts.
Constellation and Talen shares were each down as markets opened, but have both still doubled in value since the start of 2024.