TOSBF Toshiba Corp (PK)

Constellation Energy Nuclear Group, LLC awarded a $300 million contract to Global Nuclear Fuel-Americas, a joint venture of General Electric Company (GE), Toshiba Corporation (TOSBF) and Hitachi Ltd. (HIT). Per the contract, Constellation Energy Nuclear will be provided with fuel and related services for its Nine Mile Point nuclear facility in New York state.

Constellation Energy Nuclear is a joint venture of Constellation Energy Group Inc. (CEG) and Électricité de France Group. The joint venture is a leading producer of safe and reliable nuclear power. The company owns and operates five nuclear reactors at three sites in New York and Maryland.

Constellation Energy Group Inc. is a diversified energy company with regulated and merchant businesses. The visibility of its underlying earnings strength is enhanced by a geographically-disparate customer base and a diversified power generation portfolio, as well as a strong balance sheet and stable regulated earnings.

All these positives are, however, offset by significant Maryland exposure, risks in the merchant power space, and pending regulatory cases for its ongoing merger proceedings. Constellation Energy announced at the fag end of April that it would be acquired by Exelon Corporation (EXC) for about $7.9 billion. The merger has been approved by the shareholders of both the companies and the union is subject to overcoming some regulatory hurdles. The companies expect to close the transaction by early 2012.

Constellation Energy presently retains a short-term Zacks #4 Rank (Sell). We however have a long-term Neutral recommendation on the stock.

Baltimore-based Constellation Energy Group Inc. is a diversified holding company for a group of energy businesses focused on wholesale power marketing and merchant generation. It owns a diversified fleet of generating units, totaling approximately 12,000 megawatts of generating capacity, and is a leading advocate for clean, environmentally sustainable energy sources, such as solar power and nuclear energy.

 
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