Exelon warns 2010 profit may decline on power prices

Exelon Corp., the largest U.S. owner of nuclear power plants, said per-share profit may fall next year on lower electricity prices.

Profit excluding some one-time items will be $3.60 to $4 a share, Exelon said in slides filed with the U.S. Securities and Exchange Commission for an industry investment conference in Hollywood, Florida. That compares with $3.99, the average of 15 analyst estimates compiled by Bloomberg.

Exelon is based in Chicago with operations in Warrenville,

Profit on that basis this year will be $4 to $4.10 a share, Exelon said on Oct. 23. The expectation is $4.08, the average of 15 analyst estimates.

Wholesale prices in PJM Interconnection LLC, the largest U.S. power market, averaged $40.25 per megawatt-hour during the third quarter, down 58 percent from a year earlier. Earnings may not climb until electricity prices increase, Chief Executive Officer John Rowe said in September.

Exelon, which operates 10 nuclear power plants comprised of 17 reactors, said it will cut operating costs by $350 million next year. Reductions include 500 job cuts and a freeze on executive pay announced in June.

Capital spending will be about $3.38 billion, the same as planned for 2009, the company said.

Exelon’s third-quarter net income rose 8.1 percent to $757 million, or $1.06 a share, on gains in the value of forward sales contracts and the value of funds held in trust to decommission nuclear reactors. Excluding those items, profit fell 10 percent to 96 cents a share.

The forecast was released before regular trading began on U.S. markets. Exelon fell 96 cents, or 2 percent, to $46.96 on Oct. 31 in New York Stock Exchange composite trading. Before today, the shares had fallen 16 percent this year. They have 10 by ratings and 8 holds from analysts.