Constellation Energy misses first-quarter profit estimates hit by higher operating costs
May 6 (Reuters) - U.S. utility Constellation Energy (CEG.O), opens new tab missed Wall Street expectations for first-quarter profit on Tuesday, hurt by higher operating and interest expenses, sending its shares down nearly 5% in premarket trading.
The company's net income fell around 87% from a year earlier to $118 million in the reported quarter.
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Higher-for-longer interest rates can weigh on utilities as it makes investing in the construction and maintenance of critical infrastructure such as electrical grids more expensive.
Constellation Energy said interest expenses rose nearly 15% from a year earlier to $146 million in the January-March quarter, while total operating expenses rose 18.5% to $6.34 billion.
The company also said its $16.4 billion acquisition of privately held natural gas and geothermal company, Calpine, a deal which faced backlash from consumer groups, was on track to be completed by the end of the year.
The utility had defended its planned acquisition of Calpine to the regulators last month.
The Baltimore, Maryland-based utility, posted an adjusted profit of $2.14 per share for the three months ended March 31, missing analysts' estimates of $2.22 according to data compiled by LSEG.
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