DOW JONES NEWSWIRES Exelon Corp.'s (EXC) first-quart earnings fell 70% as costs related to the electric and gas utility's merger with Constellation Energy Group Inc. weighed on results and as margins weakened. Exelon, the largest operator of nuclear plants in the U.S., completed its acquisition of Constellation in March. The merger, an all-stock deal valued at nearly $8 billion, allows Exelon to absorb Constellation's nuclear fleet and large retail power business. However, the deal prompted Moody's Investors Service to downgrade its investment-grade rating on Exelon by a notch, noting the companied company will likely see negative free cash flow for several years. Exelon owns Illinois utility Commonwealth Edison, but its largest business is operating power plants across the U.S. an selling the electricity on the wholesale market. The recent plunge in U.S. natural gas prices has forced wholesale power prices lower, threatening Exelon's bottom line. President and Chief Executive Christopher Crane said that as expected, the latest results reflected unfavorable market conditions and mild weather. Exelon reported a profit of $200 million, or 28 cents a share, down from $668 million, or $1.01 a share, a year earlier. Excluding mark-to-market adjustments, merger-related costs and other items, earnings fell to 85 cents a share from $1.17 a share. Revenue slipped 5.4% to $4.69 billion. Analysts polled by Thomson Reuters had most recently forecast earnings of 81 cents a share on revenue of $7.67 billion. Operating margin narrowed to 7.7% from 24.3%. Total operating expenses jumped 15%. The company said the equivalent availability factor for its hydroelectric facilities fell to 96.6% from 97.8%. Exelon's generation business, which includes its nuclear operations, saw its earnings fall 66% to $168 million. Shares closed at $38.82 Thursday and were inactive premarket. -By Nathalie Tadena, Dow Jones Newswires; 212-416-3287; nathalie.tadena@dowjones.com
