2026 05 11 Earnings CEG Q1 2026

Summary

CEG Q1 2026: adjusted EPS $2.74 vs. $2.14 prior year; Calpine accretion $0.60/share in Q1 alone. FCF guidance: $8.4B 2026-2027, rising to $11.5-$13B 2028-2029. PJM targeting June FERC submission for new capacity market rules. Crane/TMI capacity interconnection rights (CIR) transfer FERC response expected June-July — the gate that determines the 2027 vs. 2031 timeline. Dominguez: "light now clearly visible at end of the tunnel." Hyperscaler capex +75% YoY and still being revised upward.

Transcript

Joseph Dominguez (CEO): Our outlook is arguably conservative through 2029 with quantifiable upside opportunities not included in base guidance.

[On earnings:] Q1 GAAP EPS: $4.49 per share. Q1 Adjusted Operating EPS: $2.74 per share, up $0.60 year-over-year. Full-year guidance affirmed at $11-$12 per share. The company repurchased approximately 1.2 million shares at an average price of $285 per share for $335 million.

[On nuclear operations:] Nuclear fleet generated 40 million megawatt-hours at 92.3% capacity factor. Combined cycle fleet generated 23 million megawatt-hours at 47.1% capacity factor.

[On PJM:] The light now is clearly visible at the end of the tunnel. PJM targeting June submission to FERC for new capacity market rules.

[On data center demand:] Projected spending levels for 2026 are nearly 75% higher than last year and continue to be revised upward.

[On ERCOT valuation:] The market is "undervalued," particularly for 2028-2029 periods.

Shane Smith (CFO): Calpine integration contributed approximately $0.60 per share of EPS accretion in Q1. Free cash flow of $8.4 billion projected for 2026-2027, rising to $11.5-$13 billion for 2028-2029 — approximately 45% growth at the midpoint.

[On capital allocation:] Both buybacks and organic investments will proceed opportunistically. Company will pursue investments at 10%+ IRR thresholds while repurchasing shares if valuations appear attractive.

David Dardis (EVP General Counsel): [On Crane/TMI:] Transfer of Capacity Interconnection Rights from Eddystone to Crane expected to facilitate 2027 capacity credit, with FERC response anticipated in June-July timeframe.

[On PJM market design:] Option B and differential reliability...raises real legal questions.

Q&A Highlights

[Analyst on PJM capacity market]: Forward market appears to anticipate only 10,000-15,000 MW of load growth, despite over 400,000 MW in the queue.

Dominguez: ERCOT market undervalued particularly for 2028-2029 periods.

[Analyst on nuclear uprates]: Byron and Braidwood uprates are "well in plan," with EPS accretion expected in 2030 at the earliest.

Key financial metrics