U.S. utility Constellation Energy CEG-Q on Friday narrowed the upper end of its full-year forecast, after missing third-quarter estimates on higher operating expenses.
Shares of the company based in Baltimore, Md., fell 4 per cent in premarket trading following the results.
Higher operating expenses, driven by infrastructure investments and maintenance, tend to squeeze margins for utilities such as Constellation Energy.
Due to the rapid growth in power consumption following the expansion of artificial-intelligence data centres, rising domestic production and the electrification of industries, U.S. utilities have been arguing for higher customer electricity costs.
Utilities have been seeking to raise customer power bills to fund infrastructure upgrades, as the country’s electrical grids face extreme weather events and growing demand due to industry electrification and data centre expansions.
Constellation now expects full-year adjusted operating earnings in the range of US$9.05 to US$9.45 per share, from a prior view of US$8.90 to US$9.60 per share.
Economic uncertainties fuelled by U.S. President Donald Trump’s tariff policies could prompt companies to rethink how they spend the billions of dollars earmarked for developing AI infrastructure.
Investors are also becoming skeptical about tech companies spending billions of dollars on AI infrastructure, as the returns are slower than expected.
Constellation’s total operating expenses rose 7.8 per cent to US$5.48-billion in the July-September quarter.
It reported total quarterly operating revenue of US$6.57-billion, up from US$6.55-billion a year earlier.
The utility posted adjusted profit of US$3.04 per share for the three months ended Sept. 30, compared with analysts’ average estimate of US$3.12 per share, according to data compiled by LSEG.