Los Angeles Times

Exelon's first-quarter profit drops 70 percent

Exelon Corp. reported Friday a 70 percent drop in quarterly profit because of warmer-than-normal winter weather, lower power prices and costs related to its acquisition of Constellation Energy Group.

The Chicago-based company earned $200 million, or 28 cents per share, for the three months ending March 31, compared with $668 million, or $1.01 per share, a year earlier.

Exelon's earnings include results from Constellation and its regulated utility, Baltimore Gas and Electric Co., from March 12, when the $7.9 billion merger closed, to March 31.

Exelon CEO Christopher M. Crane said in a statement that the "integration activities are progressing extremely well."

Exelon's first-quarter results were hurt by $113 million in costs related to the merger and $227 million associated with the company's financial commitments to Maryland as part of the deal. A one-time $100 rate credit to BGE's residential customers, expected this month, was among dozens of conditions that the companies agreed to provide as part of a settlement with state regulators and Gov. Martin O'Malley.

Exelon also incurred $172 million in costs related to Constellation's settlement with the Federal Energy Regulatory Commission to resolve allegations of market manipulation. The $245 million that Constellation agreed to pay was the largest settlement of its kind.

Excluding the acquisition costs and other one-time expenses, Exelon said adjusted net income was $603 million, or 85 cents per share.

"As expected, our lower operating earnings for the first quarter 2012 reflected unfavorable market factors and mild weather," Crane said.

BGE lost $66 million from March 12 to March 31. The loss included after-tax costs of $83 million as part of its commitments to Maryland and $1 million for merger and integration activities.

The merger between Exelon and Constellation created the largest nonutility energy provider in the United States.

While the combined company is headquartered in Chicago, Exelon will base its retail power sales and green energy business in Baltimore, where it will build a new office building at Harbor Point.

The merger is expected to lead to the elimination of about 630 positions across both companies, with job reductions felt mostly in Baltimore.

Exelon shares fell 30 cents to close at $38.52 Friday.


Copyright © 2015, Los Angeles Times
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