Exelon Generation on Thursday reported a net income increase, on a generally accepted accounting principles basis, to $178 million in the second quarter of 2018, compared to a net loss of $235 million in the same period of 2017. Operating earnings were up year over year from $217 million to $331 million.
Exelon Generation is the nuclear plant-owning subsidiary of Chicago-based power company Exelon Corp., which reported net income of $539 million, $0.56 per diluted share, in the latest quarter. That was a massive leap from $95 million, $0.10 per share, in 2017.
Exelon Generation earned $0.34 per share in the second quarter, which was better the expected due to gains in Exelon’s nuclear decommissioning trust funds, Exelon Chief Financial Officer said Joe Nigro during a Thursday teleconference with analysts.
Part of the company’s overall earnings boost derived from momentum from a zero-emissions credit law passed in 2016 in Illinois that benefits nuclear plants, CEO Christopher Crane told financial analysts. Exelon operates six nuclear power plants in the state, and earlier in 2016 had said its Clinton and Quad Cities reactors would close absent financial assistance from the state.
Overall, Exelon Corp.’s revenue in the second quarter landed at $8.076 billion, compared to $7.665 billion in the same quarter in 2017, according to a company news release. Exelon Generation appears to be a major contributor to those numbers. The subsidiary’s latest filing with the U.S. Securities & Exchange Commission showed revenue of $4.579 billion in the second quarter, compared to $4.216 billion in the same quarter of 2017.
“Our financial footing is sound, and we continue to gain momentum,” Crane said during the call.
Nether the teleconference nor the news release mentioned Tuesday’s announcement that Exelon plans to sell its Oyster Creek nuclear plant in New Jersey to Holtec international by the third quarter of 2019. Holtec would partner with engineering company SNC-Lavalin of Montreal to decommission the facility, saying it can complete the job in eight years.
Entergy Earnings Fall in 2Q
Power company Entergy on Wednesday announced a steep drop in earnings for the second quarter, even as it unveiled plans to unload two soon-to-close nuclear power plants, also to Holtec.
As-reported earnings fell from $410 million ($2.27 per share) in second-quarter 2017 to $245 million ($1.34 per share) in the latest reporting period. Operational earnings, on a non-generally accepted accounting principles basis, dropped from $561 million ($3.11 per share) to $327 million ($1.79 per share) on a year-over-year basis.
The driver of the earnings reduction was the Entergy Wholesale Commodities business, which owns and operates several nuclear power units. The business lost $57 million ($0.31 per share) in the latest quarter on an as-reported basis, and was in the black by $25 million ($0.14 per share) on an operational basis. Both were drastically lower than their corresponding 2017 quarterly numbers: earnings of $223 million ($1.24 per share) on an as-reported basis and $375 million ($2.08 per share) on an operational basis.
The key difference between the two reports was a second-quarter 2017 reduction in income taxes that boosted earnings by $373 million ($2.07 per share).
Entergy Wholesale owns the Pilgrim nuclear power plant in Massachusetts and Palisades facility in Michigan, both of which as of Wednesday it plans to sell to Holtec International after they close in coming years. When the deals are complete, the joint venture of Holtec and SNC-Lavalin will be in charge of decommissioning the facilities.
Entergy already aims by the end of this year to close the sale of its Vermont Yankee nuclear plant, shuttered in 2014, to New York-based NorthStar Group Services for decommissioning.
During the company’s earnings conference call Wednesday, one analyst noted that the remaining operational Entergy Wholesale Commodities plant, Indian Point in New York state, was not included in the latest deal. That facility is due to close in April 2020.
“[I]f you recall, at up until a little while ago, Palisades was going to be the first plant that we will close. Since that didn’t come to fruition we continued on the path of the package deal with Pilgrim and Palisades because they were originally … the next two in line,” Entergy Chairman and CEO Leo Denault said.
