Vistra Jumps While Constellation Energy Stalls. Why the Power Giants Split.

Constellation Energy reported better-than-expected adjusted operating earnings and operating revenue in the second quarter. (Andrew Caballero-Reynolds/AFP via Getty Images)

Power plant owners Constellation Energy and Vistra went in opposite directions after reporting earnings on Thursday morning.

Constellation stock was flat after initially falling, while Vistra rose 4.6%. Vistra’s increase may have to do with comments the CEO made on its earnings call, telling investors that he’s confident the company can sign big deals this year for the electricity from its power plants, including a nuclear plant in Texas known as Comanche Peak.

Constellation has already signed deals for power from the nuclear reactors it owns, including one with Microsoft for power from a shuttered reactor at Three Mile Island, but investors may be looking for even more announcements. Its shares are already up 37% this year—so the bar is high for them to rise even more.

Vistra’s net income of $327 million beat Wall Street expectations for $301 million. The company also reaffirmed its full-year guidance. Initially that didn’t seem to be enough for investors. Before the market opened, the stock was down sharply.

One likely reason the stock reversed is that Vistra’s executives are optimistic they’ll sign lucrative deals for electricity by the end of this year. Investors want them to sell power to tech companies for their AI data centers. CEO Jim Burke told an analyst that “there’s been a ton of interest in Comanche Peak” nuclear plant, and that the company is also fielding interest for other projects. If deal is indeed signed by the end of the year, it could point to much higher earnings growth for Vistra.

Constellation also beat earnings expectations for the second quarter, though its guidance may have disappointed investors.

The company reported adjusted operating earnings per share of $1.91, beating the $1.84 analysts had anticipated, according to FactSet. Operating revenue of $6.1 billion handily topped the $4.9 billion Wall Street had forecast.

Constellation also reaffirmed its full-year adjusted operating earnings per share guidance range of $8.90 to $9.60. But analysts polled by FactSet were looking for earnings per share of $9.39, above the midpoint of the range that Constellation released.

Both stocks have soared this year, and the bar to impress investors is getting much higher. On Thursday, it appears that only Vistra did enough to hurdle that bar.

Write to Avi Salzman at avi.salzman@barrions.com and Mackenzie Tatananni at mackenzie.tatananni@barrons.com