Q3 2026 · the quarter CEG reports
Sales
PricedIn$9.1B
$7.8B1 in 10$8.6B1 in 4$9.6B1 in 4$10.3B1 in 10
adjusted EPS
PricedIn$3.74
$3.051 in 10$3.451 in 4$4.101 in 4$4.501 in 10
Middlethe forecast50% range1 in 4 chance the result comes in below this bar, 1 in 4 above it. Half the time it lands inside.80% range1 in 10 chance below this line, 1 in 10 above it. These are the low and high printed by each number.The roomThe lowest 1-in-10 low and the highest 1-in-10 high among the seven analysts, as each handed them in before the round, with who holds each.
The AI analysts agree that Calpine and summer operations should lift earnings, but differ on how much gas-generation revenue survives weak prices and asset sales. Analyst A is most cautious on sales; Analyst C expects the lowest adjusted earnings, while Analyst G combines stronger revenue with better operating profitability.
The analysts expect third-quarter 2026 sales of $9.1B, with Calpine adding scale to the summer peak.
Sales$9.1B+39% on Q3 2025 ($6.6B)50% range$8.6B – $9.6B80% range$7.8B – $10.3BThe room$7.3B – $11.3B C low · D high
Adjusted EPS$3.74+23% on Q3 2025 ($3.04)50% range$3.45 – $4.1080% range$3.05 – $4.50The room$2.70 – $5.00 D low · A high
Investment and cash generation
Base case
Capital spending$1.55B
Free cash flow$850M
Free cash flow: operating cash flow less capital spending.
Fuel and plant improvements support existing output; Crane spending prepares a later restart, not this quarter's sales. Summer earnings and collections drive cash, with collateral timing a major uncertainty. Base cash capital spending is $1.6B and free cash flow is $850M. Free cash flow means operating cash flow less all capital spending, unlike the company's adjusted before-growth measure. Category allocations are analyst estimates.2 of 7
- Analyst EBase quarterly pacing of Crane, uprates and co-location infrastructure; my estimate rather than a company quarterly allocation.
- Analyst GThe form asks for operating cash flow less all capital spending, not the company's collateral-adjusted, before-growth measure.
Calpine makes this a different business from last summer: more gas-fired generation and more retail customers sit alongside the nuclear fleet. The analysts expect summer demand and higher payments for keeping plants available to lift earnings, rather than treating the spring quarter as a normal run rate.
The company raised its annual earnings outlook after strong commercial execution and share repurchases. That supports the analysts' summer forecasts, but it does not remove the risk of weak Texas power prices or costly plant outages.
Sales follow the company's operating revenues line. Changes in the accounting value of hedges can move that line sharply without an equivalent change in adjusted earnings; Analyst E assumes no additional unrealized gains or losses after June.
Analyst A expects less sales volume and price benefit from the enlarged fleet, while Analyst C leaves more room for weak gas-generation margins and outage costs. Neither forecast needs the nuclear contracts announced this summer to start early: their disclosed start dates lie beyond this page's forecast years.
Adjusted earnings per share of $3.74 rest on Calpine, summer nuclear output, capacity payments and fewer shares. Unrealized hedge movements and decommissioning-related gains are excluded, not additional sources of adjusted earnings.
Sales by quarter
Q1 2025$6.8B+10%
Q2 2025$6.1B+11%
Q3 2025$6.6B+0%
Q4 2025$6.1B+13%
Q1 2026$11.1B+64%
Q2 2026$7.5B+23%
Q3 2026$9.1B+39%
Each percent is on the same quarter a year earlier. The last row is the PricedIn forecast.
The quarter forecast, line by line
The lines as the company's statement shows them. The forecast columns are the tab's PricedIn forecast, one analyst's whole plan, the analyst nearest the middle of the seven on both sales and earnings per share, so the lines add up to the numbers above. Sales growth is the change on the same quarter a year earlier. Earnings per share is the headline's: the company's own for the reported quarter, and for a forecast quarter that analyst's own, worked from its lines with the company's adjustments. GAAP EPS is net income over diluted shares; under it, each adjustment is its effect on net income after tax, to adjusted net income and the adjusted figure: for a forecast as that analyst states it, for a reported period from the company's own table where we hold it, and — where we do not.
What it rests on
- Acquired customers
- Calpine adds retail demand as well as generation.
Calpine's retail energy platform adds approximately 62 TWhs of annual load to our business, and allows us to expand our C&I and residential customer base, creating incremental sales channels across the country.
Annual report - Outage costs
- Lost output can also require expensive replacement electricity.
When refueling outages last longer than anticipated or we experience unplanned outages, capacity factors decrease, and we face lower margins due to higher energy replacement costs and/or lower energy sales and higher operating and maintenance costs.
Annual report - Hedge accounting
- Unrealized hedge changes are excluded from adjusted operating revenues.
Adjusted operating revenues excludes the unrealized gains or losses on economic hedging activities due to the volatility and unpredictability of the future changes in commodity prices
Second-quarter presentation
Scenarios Explained: Base, Low, and High
Basethe middle forecast
Q3-2026
Sales$9.1B
Adjusted EPS$3.74
Capital spending$1.55B
Free cash flow$850M
FCF walk and spending detail
Forecast dollars. Free cash flow is operating cash flow less capital spending.
| Adjusted operating earnings attributable to common shareholders | $1.32B |
|---|
| Depreciation, amortization, accretion and other non-cash items | $1.20B |
|---|
| Receivables, inventories, payables and collateral | −$150M |
|---|
| Other operating assets, liabilities and pension | $25.0M |
|---|
| Operating cash flow | $2.40B |
|---|
| Less capital spending | −$1.55B |
|---|
| Free cash flow | $850M |
|---|
- Adjusted operating earnings attributable to common shareholders
- Base adjusted EPS of $3.74 applied to 354 million diluted shares.
- Depreciation, amortization, accretion and other non-cash items
- Estimated combined-company non-cash expenses and deferred-tax adjustments.
- Receivables, inventories, payables and collateral
- Modest seasonal working-capital use after the first-half payables outflow.
- Other operating assets, liabilities and pension
- Estimated net other operating asset, liability and pension effects.
Capital spending
Full allocation across the company's three disclosed capital-spending categories using my quarterly timing assumptions.
| Growth capital expenditures | $650M |
|---|
| acquisition of nuclear fuel | $550M |
|---|
| additions and upgrades to existing generation facilities | $350M |
|---|
| Unallocated capital spending | $0 |
|---|
| Total capital spending | $1.55B |
|---|
Growth capital expenditures Base quarterly pacing of Crane, uprates and co-location infrastructure; my estimate rather than a company quarterly allocation.
Additionally, the above estimates of capital expenditures include $3.9 billion of growth capital expenditures, including our planned restart of Crane, nuclear uprates, co-location infrastructure, and license renewals.
acquisition of nuclear fuel Estimated quarterly nuclear-fuel spending consistent with the annual plan.
Approximately 29% of projected capital expenditures is for the acquisition of nuclear fuel, which includes additional nuclear fuel to increase inventory levels in response to the potential for the continuing Russia and Ukraine conflict to impact our long-term nuclear fuel supply.
additions and upgrades to existing generation facilities Estimated quarterly additions and upgrades to existing facilities.
The remaining amounts primarily reflect additions and upgrades to existing generation facilities (including material condition improvements during nuclear refueling outages).
Free cash flows before growth (FCFbG) is cash flows from operations less capital expenditures under GAAP for maintenance and nuclear fuel, equity investments, and adjusted for changes in collateral and non-recurring costs-to-achieve (CTA)
Three ways the base case happens
These levers explain the outcome together.
- **Calpine adds summer business.** The acquired fleet and retail customers were absent from last summer's comparison. Generation and customer sales enlarge third-quarter revenue and earnings. Weak Texas prices and disposals limit the gain; no future Crane output is included.
WatchCalpine generation, customer margins and asset-sale closing dates in the next release.
Analyst reasoning
- Analyst FMy third- and fourth-quarter revenue forecasts add about $2 billion to last year's quarters, before mark-to-market swings.
- **Nuclear output earns higher capacity payments.** Summer demand rewards available plants; last summer was already strong. Reliable output supports electricity sales and avoids replacement purchases, allowing capacity revenue to contribute to adjusted earnings this quarter.
WatchGeneration volumes and planned versus unplanned outage days on 9 November 2026.
Analyst reasoning
- Analyst EThird-quarter nuclear reliability and a full quarter of higher capacity revenue support seasonally stronger adjusted EPS, but 2026's heavier planned outage schedule keeps the estimate below the high case.
- **Commercial execution and repurchases hold.** The guidance increase reflected customer margins and capital allocation. Commercial profits and fewer shares support adjusted earnings. Analyst E assumes a modest cash drain from receivables and collateral while fuel and growth spending continue.
WatchCustomer margins, diluted shares and cash tied up in collateral.
Analyst reasoning
- Analyst EThe raised guidance anchors 2026 adjusted EPS at $12.00, and completed repurchases support a declining share count. The 920-megawatt contracts begin later and do not inflate near-term revenue.
Sales of $9.1B and adjusted earnings per share of $3.74 require a normal summer contribution from Calpine, reliable nuclear output and sustained commercial margins. Repurchases help per-share earnings, while investment continues before Crane generates electricity. Cash conversion assumes only modest seasonal working-capital use in Analyst E's central case.
Highabout 1 chance in 10 of better
Q3-2026
Sales$10.3B+13% vs base
Adjusted EPS$4.50+20% vs base
Capital spending$1.25B
Free cash flow$1.45B
FCF walk and spending detail
Forecast dollars. Free cash flow is operating cash flow less capital spending.
| net income (high case) | $1.40B |
|---|
| depreciation, amortization and accretion including nuclear fuel and contract amortization | $1.15B |
|---|
| deferred income taxes | $300M |
|---|
| gains on decommissioning trust funds and fair value changes | −$150M |
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| working capital and collateral | −$1.00M |
|---|
| Operating cash flow | $2.70B |
|---|
| Less capital spending | −$1.25B |
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| Free cash flow | $1.45B |
|---|
- net income (high case)
- Adjusted earnings of $4.30 on 356 million shares, less $130 million of items
- depreciation, amortization and accretion including nuclear fuel and contract amortization
- Run rate
- deferred income taxes
- Higher with higher earnings
- gains on decommissioning trust funds and fair value changes
- Trust gains removed
- working capital and collateral
- Collateral returned as prices calm
Capital spending
Spending is fixed in the quarter whatever the earnings. The allocation is my estimate; fuel and maintenance are unallocated.
| planned restart of Crane | $200M |
|---|
| inclusion of Calpine | $400M |
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| co-location infrastructure | $100M |
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| Unallocated capital spending | $550M |
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| Total capital spending | $1.25B |
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planned restart of Crane My estimate
Cash used in investing activities was ($5,101) million and ($1,758) million for the six months ended June 30, 2026 and 2025, respectively. The change is primarily related to cash paid, net of cash acquired, for the Calpine acquisition and an increase in capital expenditures related to the planned restart of Crane, inclusion of Calpine, and co-location infrastructure. See Note 2 — Mergers, Acquisitions, and Dispositions of the Combined Notes to Consolidated Financial Statements for additional information.
inclusion of Calpine My estimate
Cash used in investing activities was ($5,101) million and ($1,758) million for the six months ended June 30, 2026 and 2025, respectively. The change is primarily related to cash paid, net of cash acquired, for the Calpine acquisition and an increase in capital expenditures related to the planned restart of Crane, inclusion of Calpine, and co-location infrastructure. See Note 2 — Mergers, Acquisitions, and Dispositions of the Combined Notes to Consolidated Financial Statements for additional information.
co-location infrastructure My estimate
Cash used in investing activities was ($5,101) million and ($1,758) million for the six months ended June 30, 2026 and 2025, respectively. The change is primarily related to cash paid, net of cash acquired, for the Calpine acquisition and an increase in capital expenditures related to the planned restart of Crane, inclusion of Calpine, and co-location infrastructure. See Note 2 — Mergers, Acquisitions, and Dispositions of the Combined Notes to Consolidated Financial Statements for additional information.
Speaker not named: We expect to invest approximately $3.9 billion during 2026 and 2027 to add new megawatts and enhanced performance and longevity of the existing fleet across all fuel types.
Three ways the high case happens
These levers explain the outcome together; each is not a separate one-in-ten event.
- **Summer dispatch exceeds the base.** Hot weather can raise demand and the value of available generation. More gas and nuclear electricity sold at stronger realized margins raises sales and adjusted earnings within the quarter.
WatchGas-generation hours and realized power margins above plan.
Analyst reasoning
- Analyst DHot weather and scarcity pricing lift nuclear and gas margins above the production tax credit floor
- **Nuclear reliability stays exceptional.** Analysts treat plant availability as the constraint on capturing peak demand. Fewer lost generation hours increase sales and reduce replacement-power and maintenance costs, strengthening quarterly earnings.
WatchStrong generation with few unplanned outages.
Analyst reasoning
- Analyst GStrong nuclear availability with efficient operating costs
- **Commercial execution and collections outperform.** Market volatility can create profitable opportunities for the customer business. Realized commercial profits and faster repurchases lift adjusted earnings. Better collections support cash; accelerated growth work consumes part of that improvement rather than producing immediate Crane earnings.
WatchCommercial margins, share repurchases and cash collections beat the central assumptions.
Analyst reasoning
- Analyst EAbove-plan commercial margins and portfolio optimization
The combined upside case reaches sales of $10.3B and adjusted earnings per share of $4.50. Strong dispatch, reliable nuclear generation and unusually profitable commercial execution must reinforce one another. Analyst D stretches furthest, with sales of $11.3B and adjusted earnings per share of $4.85: it allows more scarcity pricing and commercial gains, plus positive hedge valuation movements in sales. Those unrealized movements do not themselves create adjusted earnings. Better collections help cash even as stronger project execution raises spending.
The company's guidance increase already reflected successful commercial execution. Repeating or exceeding that performance matters more this quarter than contracts scheduled to begin years later.
The seven highs run from $9.5B (Analyst A) to $11.3B (Analyst D).
First sign9 November 2026: strong summer generation and commercial margins, accompanied by another increase in annual guidance.
Lowabout 1 chance in 10 of worse
Q3-2026
Sales$7.8B−14% vs base
Adjusted EPS$3.05−18% vs base
Capital spending$1.25B
Free cash flow$550M
FCF walk and spending detail
Forecast dollars. Free cash flow is operating cash flow less capital spending.
| net income (low case) | $1.06B |
|---|
| depreciation, amortization and accretion including nuclear fuel and contract amortization | $1.15B |
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| deferred income taxes | $200M |
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| gains on decommissioning trust funds and fair value changes | −$150M |
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| working capital and collateral | −$463M |
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| Operating cash flow | $1.80B |
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| Less capital spending | −$1.25B |
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| Free cash flow | $550M |
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- net income (low case)
- Adjusted earnings of $3.35 on 356 million shares, less the $130 million of net adjustment items
- depreciation, amortization and accretion including nuclear fuel and contract amortization
- Near the $1.17-1.20 billion a quarter reported in 2026
- deferred income taxes
- Lower than base with lower earnings; bonus depreciation keeps cash taxes low
- gains on decommissioning trust funds and fair value changes
- Trust gains are non-cash and removed
- working capital and collateral
- Collateral posting and receivables build in a weak quarter
Capital spending
Quarterly spending assumed near the first-half pace of about $1.25 billion. The company names Crane, Calpine and co-location as the drivers of the increase but gives no split, so these amounts are my estimates. The rest (nuclear fuel, maintenance, uprates) is left unallocated.
| planned restart of Crane | $200M |
|---|
| inclusion of Calpine | $400M |
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| co-location infrastructure | $100M |
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| Unallocated capital spending | $550M |
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| Total capital spending | $1.25B |
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planned restart of Crane My estimate of quarterly restart spending toward a start in the second half of 2027
Cash used in investing activities was ($5,101) million and ($1,758) million for the six months ended June 30, 2026 and 2025, respectively. The change is primarily related to cash paid, net of cash acquired, for the Calpine acquisition and an increase in capital expenditures related to the planned restart of Crane, inclusion of Calpine, and co-location infrastructure. See Note 2 — Mergers, Acquisitions, and Dispositions of the Combined Notes to Consolidated Financial Statements for additional information.
inclusion of Calpine My estimate of capital spending at the Calpine fleet
Cash used in investing activities was ($5,101) million and ($1,758) million for the six months ended June 30, 2026 and 2025, respectively. The change is primarily related to cash paid, net of cash acquired, for the Calpine acquisition and an increase in capital expenditures related to the planned restart of Crane, inclusion of Calpine, and co-location infrastructure. See Note 2 — Mergers, Acquisitions, and Dispositions of the Combined Notes to Consolidated Financial Statements for additional information.
co-location infrastructure My estimate for data center co-location work such as the Freestone substation
Cash used in investing activities was ($5,101) million and ($1,758) million for the six months ended June 30, 2026 and 2025, respectively. The change is primarily related to cash paid, net of cash acquired, for the Calpine acquisition and an increase in capital expenditures related to the planned restart of Crane, inclusion of Calpine, and co-location infrastructure. See Note 2 — Mergers, Acquisitions, and Dispositions of the Combined Notes to Consolidated Financial Statements for additional information.
Speaker not named: We expect to invest approximately $3.9 billion during 2026 and 2027 to add new megawatts and enhanced performance and longevity of the existing fleet across all fuel types.
Three ways the low case happens
These levers explain the outcome together; each is not a separate one-in-ten event.
- **Gas plants run less profitably.** Texas supply can outpace demand when summer weather is mild. Lower dispatch and realized power margins reduce quarterly sales and adjusted earnings. Lower fuel prices can also reduce sales without a matching profit decline.
WatchWeak Texas realized margins and fewer gas-generation hours.
Analyst reasoning
- Analyst AGas-fired generation dispatched well below plan in Texas and the West, so purchased power costs stay high relative to revenue
- **Nuclear outages cost more.** Refueling overruns or forced outages reduce available generation. Lost electricity sales and replacement-power purchases hurt adjusted earnings during the summer peak; maintenance spending does not disappear with lost output.
WatchMore outage days and purchased-power expense relative to sales.
Analyst reasoning
- Analyst GMore nuclear outages and higher replacement-power costs
- **Commercial profits convert poorly to cash.** Integration costs and collateral needs can persist in a weak quarter. Lower customer margins weaken earnings; receivables and collateral absorb cash while committed projects continue. Hedge valuation losses can depress sales, but are not an adjusted-earnings loss.
WatchWeaker customer margins alongside collateral posting and slower collections.
Analyst reasoning
- Analyst GIntegration, replacement power and collateral outflows reduce cash even more than adjusted earnings.
Together, weak gas dispatch, nuclear outages and poorer commercial execution explain the one-in-ten downside endpoints: sales of $7.8B and adjusted earnings per share of $3.05. Analyst C's sales reach further down to $7.3B with mild weather, weak Texas margins and adverse hedge accounting. Analyst D's adjusted earnings reach $2.70 when weak summer margins coincide with lost nuclear output and integration costs. These are combined cases, not three separate one-in-ten events. Lower profit and collateral demands reduce cash even where discretionary investment slows.
Management described Texas supply arriving ahead of demand. Nuclear outages can hurt twice: less electricity to sell and more replacement power to buy.
The seven lows run from $7.3B (Analyst C) to $8.2B (Analyst B).
First sign9 November 2026: weak realized margins, unexpected outages or poor summer cash conversion in the third-quarter release.
The odds the analysts give
Two questions each analyst answers with a probability.
Sales: the company's own normal, its year-over-year growth over the last eight quarters, −7.1% to +63.8%.
Growth above +63.8% on Q3 2025, the company's highest in eight quarters (Q1 2026)
8%the seven: 2% to 14%
On Q3 2025's $6.57B that is third-quarter sales above $10.8B.
Growth below −7.1%, the company's lowest in eight quarters (Q4 2024)
0.5%the seven: 0.5% to 3%
On Q3 2025's $6.57B that is third-quarter sales below $6.10B.
Together: 8.5% odds of a quarter outside the company's normal.
Adjusted EPS: the company's own normal, its year-over-year growth over the last eight quarters, −5.7% to +40.2%.
Growth above +40.2% on Q3 2025, the company's highest in eight quarters (Q4 2024)
16%the seven: 8% to 28%
On Q3 2025's $3.04 that is third-quarter adjusted EPS above $4.26.
Growth below −5.7%, the company's lowest in eight quarters (Q4 2025)
10%the seven: 2% to 13%
On Q3 2025's $3.04 that is third-quarter adjusted EPS below $2.87.
Together: 26% odds of a quarter outside the company's normal.
Surfaced outlier views
For Q3-2026 the seven analysts sit within 9.9% of the PricedIn number on sales and within 6.7% on adjusted EPS. The furthest, and why:
Analyst A · Q3-2026: sales $8.20B, the lowest of the seven (PricedIn $9.10B)
WhyAnalyst A relies more on nuclear profitability than gas spreads, assuming cheap gas limits power prices as well as fuel costs. Its purchased power and fuel expense is $4.1B, consistent with a smaller sales base, rather than a collapse in profitability. Its early-disposal assumption also trims acquired revenue; the later company timetable leaves those closings uncertain.
Lower gas means lower purchased power and fuel cost but also weaker power prices, so I held the fuel line at about 50 percent of revenue in the third quarter and let the margin improvement come from the nuclear fleet rather than from gas spreads.
Analyst C · Q3-2026: adjusted EPS $3.49, the lowest of the seven (PricedIn $3.74)
WhyAnalyst C caps Calpine's summer margin contribution because Texas supply is arriving before demand, and assumes a heavier but manageable refueling schedule. Its operating margin is +12%; extra gas-dispatch and retail revenue largely passes through to fuel costs instead of raising adjusted earnings.
Management expected soft ERCOT prices absent the right weather, with batteries and new supply arriving before the load; this caps the Calpine fleet's second-half contribution in my base case and drives my low case (weak Texas spark spreads plus a mild summer).
Analyst D · Q3-2026: sales $9.40B and adjusted EPS $3.75, near the PricedIn numbers of $9.10B and $3.74, by a different route
WhyAnalyst D arrives near the central earnings forecast with stronger sales but a heavier operating-cost burden. Analyst D's operating and maintenance expense is $2.2B and other income is $180M; higher sales therefore do not translate into correspondingly higher earnings.
Cheap gas and a still-building data-center load keep the base case near the guide midpoint rather than the top, and they slow 2027 growth relative to the 2026 step-up from Calpine.
The cases
The analyst with the highest 1-in-10 high argues the bull case; the one with the lowest 1-in-10 low argues the bear case. Each claim stands on a line the harness replays. The other analysts adopt a line or deny in a sentence, before their finals.
The bull case · Analyst D · Q3-2026: sales $11.3B, adjusted EPS $4.85, as the 1-in-10 high
The caseThird-quarter sales of $11.3 billion is only a small step above the $11,122 million of operating revenue already reported for the first quarter of 2026, and that quarter was not the seasonal peak. The same books put $995 million of unrealized gains inside first-half operating revenue and a $320 million unrealized loss inside the second quarter alone, so a hot summer plus a positive hedge mark of a size already printed clears $11.3 billion. Adjusted earnings of $4.85 does not come from that mark, which is removed from adjusted earnings: it needs the physical summer, with the nuclear fleet already above a 99 percent capacity factor over the July holiday, Calpine accretion of about $2 a share for the year, higher PJM capacity prices, and Texas price action that management said appears only when the weather is there.
Operating revenues include unrealized gains of $995 million and losses of $201 million for the six months ended June 30, 2026 and 2025, respectively.
Operating revenues include unrealized losses of $320 million and gains of $86 million for the three months ended June 30, 2026 and 2025, respectively.
11122000000
of July holiday, our employees delivered, achieving a nuclear capacity factor above 99%
As a reminder, our guidance included approximately $2 per share of accretion for Calpine on a full year basis.
Speaker not named: CalPine, higher capacity prices in PJM, and strong performance from our commercial business
Speaker not named: Andrew, I think, was the one that mentioned we would expect to see, depending on weather, and if you don't have the right weather, you're not going to see a lot of price action in Texas.
Verdicts: adopted by 1, denied by 5
The bear case · Analyst C · Q3-2026: sales $7.30B, adjusted EPS $3.00, as the 1-in-10 low
The caseA mild summer across PJM and ERCOT, with management itself warning that without the right weather there is little price action in Texas while battery storage and other new supply arrive on the grid earlier than the load does, holds the combined fleet's realized margins near the second quarter's run rate rather than producing the usual summer step-up; an elevated refueling schedule adds replacement-power costs and lower energy sales on top. Reported GAAP revenue falls further than adjusted earnings because the fleet hedges anticipated future sales, so unfavorable net unrealized losses on economic hedges strip several hundred million dollars of mark-to-market out of the quarter, taking the print down toward $7.3 billion. The same mild weather, outage drag and compressed Texas spreads hold adjusted operating EPS near $3.00, the bottom of the quarter's implied range.
if you don't have the right weather, you're not going to see a lot of price action in Texas
The battery storage and other things you're talking about started earlier and they're arriving on the grid earlier than the load is.
When refueling outages last longer than anticipated or we experience unplanned outages, capacity factors decrease, and we face lower margins due to higher energy replacement costs and/or lower energy sales and higher operating and maintenance costs.
•Unfavorable net unrealized losses on economic hedges;
We believe these instruments, which are either determined to be non-derivative or classified as economic hedges, mitigate exposure to fluctuations in commodity prices.
Verdicts: adopted by 0, denied by 6
Watch
9 November 2026 · before the open · 09:00 ET: compare nuclear output, gas dispatch, customer margins, diluted shares and collateral movements with the forecasts. Separate hedge valuation changes in sales from realized operating performance.
Q4 2026 · the quarter after
Sales
PricedIn$8.10B
$6.90B1 in 10$7.60B1 in 4$8.90B1 in 4$9.60B1 in 10
adjusted EPS
PricedIn$2.97
$2.351 in 10$2.651 in 4$3.351 in 4$3.801 in 10
Middlethe forecast50% range1 in 4 chance the result comes in below this bar, 1 in 4 above it. Half the time it lands inside.80% range1 in 10 chance below this line, 1 in 10 above it. These are the low and high printed by each number.The roomThe lowest 1-in-10 low and the highest 1-in-10 high among the seven analysts, as each handed them in before the round, with who holds each.
The AI analysts agree on a seasonal decline from summer while retaining a year-over-year acquisition benefit. Analyst G keeps more sales, Analyst C puts more adjusted earnings into year-end, and the largest cash disagreement concerns how much earlier working-capital use reverses.
The analysts expect fourth-quarter 2026 sales of $8.1B, as autumn demand and asset sales temper Calpine's contribution.
Sales$8.1B+33% on Q4 2025 ($6.1B)50% range$7.6B – $8.9B80% range$6.9B – $9.6BThe room$6.8B – $10.1B A low · D high
Adjusted EPS$2.97+29% on Q4 2025 ($2.30)50% range$2.65 – $3.3580% range$2.35 – $3.80The room$2.00 – $4.20 A low · A high
Investment and cash generation
Base case
Capital spending$1.60B
Free cash flow$1.74B
Free cash flow: operating cash flow less capital spending.
Year-end fuel purchases, maintenance and Crane construction continue; Crane contributes no electricity this quarter. Collections and collateral releases are decisive for cash. Base cash capital spending is $1.6B and free cash flow is $1.7B. Free cash flow subtracts all capital spending from operating cash flow, unlike the company's adjusted before-growth measure. Quarterly category allocations are analyst estimates.2 of 7
- Analyst EYear-end reversal of a substantial portion of first-half working-capital and collateral outflows.
- Analyst GThe form asks for operating cash flow less all capital spending, not the company's collateral-adjusted, before-growth measure.
The fourth quarter is a step down from the summer peak, not a reversal of the acquisition benefit. Calpine remains in the comparison with last year, while autumn refueling, milder demand and required plant disposals reduce the amount of business retained.
Sale timing is an important disagreement. Some forecasts use the older assumption that all required disposals close during the summer; the later company disclosure expects the transactions to close by year-end. The analysts' fourth-quarter figures are forecasts, not a company sales outlook.
Analyst C allocates more of the remaining annual earnings to this quarter than the others. Analyst G retains the largest sales base, but does not turn that into the highest adjusted earnings: purchased power, operating costs and tax still matter.
Cash is a separate source of disagreement. Analyst E expects a substantial year-end release of cash tied up earlier, whereas Analyst F expects winter receivables and collateral to absorb cash. A normal earnings result need not settle that cash question.
Adjusted earnings per share of $2.97 depend on autumn outage costs, retained Calpine earnings and customer margins. Repurchases support the per-share result, but cannot replace operating profit lost when plants are sold.
What it rests on
- Disposal timetable
- Required sales were expected to close by year-end.
We expect the transactions to close by the end of this year.
Quarterly acquisition note - Autumn maintenance
- Longer outages lower sales and raise replacement-power costs.
When refueling outages last longer than anticipated or we experience unplanned outages, capacity factors decrease, and we face lower margins due to higher energy replacement costs and/or lower energy sales and higher operating and maintenance costs.
Annual report - Later contract starts
- The latest nuclear agreements do not start this year.
These agreements are for 15-20 years in duration and are set to begin in 2029 through 2032.
Second-quarter release
Scenarios Explained: Base, Low, and High
Basethe middle forecast
Q4-2026
Sales$8.1B
Adjusted EPS$2.97
Capital spending$1.60B
Free cash flow$1.74B
FCF walk and spending detail
Forecast dollars. Free cash flow is operating cash flow less capital spending.
| Adjusted operating earnings attributable to common shareholders | $1.04B |
|---|
| Depreciation, amortization, accretion and other non-cash items | $1.25B |
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| Receivables, inventories, payables and collateral | $850M |
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| Other operating assets, liabilities and pension | $202M |
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| Operating cash flow | $3.35B |
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| Less capital spending | −$1.60B |
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| Free cash flow | $1.74B |
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- Adjusted operating earnings attributable to common shareholders
- Base adjusted EPS of $2.97 applied to 352 million diluted shares.
- Depreciation, amortization, accretion and other non-cash items
- Estimated combined-company non-cash expenses and deferred-tax adjustments.
- Receivables, inventories, payables and collateral
- Year-end reversal of a substantial portion of first-half working-capital and collateral outflows.
- Other operating assets, liabilities and pension
- Estimated net other operating asset, liability and pension effects.
Capital spending
Full allocation across the company's categories; third- and fourth-quarter estimates complete the annual plan when added to the first half.
| Growth capital expenditures | $700M |
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| acquisition of nuclear fuel | $550M |
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| additions and upgrades to existing generation facilities | $354M |
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| Unallocated capital spending | $0 |
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| Total capital spending | $1.60B |
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Growth capital expenditures Base year-end pacing of Crane, uprates and co-location projects; my estimate, not company guidance.
Additionally, the above estimates of capital expenditures include $3.9 billion of growth capital expenditures, including our planned restart of Crane, nuclear uprates, co-location infrastructure, and license renewals.
acquisition of nuclear fuel Estimated year-end nuclear-fuel purchases.
Approximately 29% of projected capital expenditures is for the acquisition of nuclear fuel, which includes additional nuclear fuel to increase inventory levels in response to the potential for the continuing Russia and Ukraine conflict to impact our long-term nuclear fuel supply.
additions and upgrades to existing generation facilities Estimated additions and upgrades to existing facilities, completing the annual base capital-spending plan.
The remaining amounts primarily reflect additions and upgrades to existing generation facilities (including material condition improvements during nuclear refueling outages).
Free cash flows before growth (FCFbG) is cash flows from operations less capital expenditures under GAAP for maintenance and nuclear fuel, equity investments, and adjusted for changes in collateral and non-recurring costs-to-achieve (CTA)
Three ways the base case happens
These levers explain the outcome together.
- **The retained fleet earns through autumn.** Calpine enlarges the business, but required sales remove some generating assets. Retained plants support year-over-year sales and earnings; closing dates determine how much fourth-quarter revenue remains. Disposal proceeds are not operating cash flow.
WatchConfirmed sale closing dates and retained generation.
Analyst reasoning
- Analyst ERequired asset sales temper fourth-quarter and 2027 revenue despite a full year of Calpine, and sale proceeds support liquidity but are excluded from operating cash flow and free cash flow as defined.
- **Refueling stays within plan.** Autumn is a maintenance season rather than the summer demand peak. Planned outages lower output relative to summer, but timely returns prevent extra replacement purchases and protect adjusted earnings.
WatchRefueling completion dates and purchased-power expense.
Analyst reasoning
- Analyst BWe apply our industry knowledge to project higher consolidated revenues, wider operating margins, and lower refueling outage maintenance expenses in the third quarter of 2026 compared to the second and fourth quarters of 2026.
- **Customer profits and collections hold.** The commercial business and repurchases supported the raised annual outlook. Customer margins and fewer shares sustain adjusted earnings despite lower seasonal sales. Analyst E's year-end collections fund ongoing fuel and growth spending.
WatchCustomer margins, diluted shares and the direction of collateral movements.
Analyst reasoning
- Analyst EYear-end reversal of a substantial portion of first-half working-capital and collateral outflows.
Sales of $8.1B and adjusted earnings per share of $2.97 require an orderly autumn outage season, continuing commercial profitability and no worse loss of acquired earnings than the disposal assumptions allow. Repurchases partly cushion the seasonal profit decline. The displayed cash base follows Analyst E's strong year-end collection and collateral release assumption, not a cash percentile independent of this earnings case.
Highabout 1 chance in 10 of better
Q4-2026
Sales$9.6B+19% vs base
Adjusted EPS$3.80+28% vs base
Capital spending$1.35B
Free cash flow$850M
FCF walk and spending detail
Forecast dollars. Free cash flow is operating cash flow less capital spending.
| Net income | $1.20B |
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| Depreciation, amortization, accretion and nuclear fuel | $1.15B |
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| Working capital and collateral | −$150M |
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| Operating cash flow | $2.20B |
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| Less capital spending | −$1.35B |
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| Free cash flow | $850M |
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- Net income
- A strong fourth quarter lifts profit toward $1.2 billion, consistent with adjusted earnings per share near $4.10.
- Depreciation, amortization, accretion and nuclear fuel
- Non-cash charges stay near the recent pace.
- Working capital and collateral
- Some year-end use remains, but less than in a weak book.
Capital spending
Same categories as the base case, with a faster growth pace. Unallocated is sustaining capital.
| Crane nuclear generation facility | $340M |
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| up rates | $140M |
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| new natural gas, battery, wind, and solar | $250M |
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| Nuclear fuel | $280M |
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| Unallocated capital spending | $340M |
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| Total capital spending | $1.35B |
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Crane nuclear generation facility Faster restart spending if the schedule holds.
We are actively pursuing the restart of our Crane nuclear generation facility. The restart is estimated to cost $1.6 billion and is subject to certain regulatory approvals, including the NRC comprehensive safety and environmental review, as well as permits from relevant state and local agencies.
up rates More uprate work if customer support is firm.
We have 1,100 megawatts of up rates.
new natural gas, battery, wind, and solar 2026 in-service projects finish stronger.
we are placing more than 600 megawatts of new natural gas, battery, wind, and solar capacity into service in 2026
Nuclear fuel Fuel spending does not flex much with earnings.
capital expenditures under GAAP for maintenance and nuclear fuel
We expect to invest approximately $3.9 billion during 2026 and 2027 to add new megawatts and enhanced performance and longevity of the existing fleet across all fuel types.
Three ways the high case happens
These levers explain the outcome together; each is not a separate one-in-ten event.
- **Winter demand strengthens.** Colder weather increases the need for electricity and gas. More dispatch and wider realized margins raise sales and adjusted earnings during the quarter.
WatchHigher winter generation and customer demand.
Analyst reasoning
- Analyst BHotter-than-normal summer and colder-than-normal winter weather driving elevated wholesale power prices, wider natural gas spark spreads, and commercial portfolio optimization gains above plan
- **Plants return promptly.** Autumn refueling determines how much capacity is ready for winter. Timely returns increase saleable output and avoid expensive replacement electricity, improving earnings without relying on an early Crane restart.
WatchRefueling completion on or ahead of schedule.
Analyst reasoning
- Analyst GStrong nuclear availability with efficient operating costs
- **Commercial profits fund faster work.** Better market opportunities and collections can reinforce one another. Realized customer profits lift earnings, while collections improve cash conversion. Analyst E accelerates growth and fuel purchases, so some additional cash is reinvested.
WatchCommercial margins and collections improve while project payments remain on schedule.
Analyst reasoning
- Analyst EStrong year-end collections and reversal of collateral and payables outflows.
Sales of $9.6B and adjusted earnings per share of $3.80 require stronger winter dispatch, timely plant returns and commercial outperformance together. Analyst D extends furthest to sales of $10.1B and adjusted earnings per share of $4.10, allowing a larger operating-profit response to stronger prices and commercial execution. Its high case still absorbs year-end working capital and spends more on growth projects; better earnings do not make every cash obligation vanish.
Capacity payments and the acquired customer business support the quarter, but future nuclear contracts cannot be treated as current sales. The upside must come from operations already available.
The seven highs run from $8.9B (Analyst A) to $10.1B (Analyst D).
First sign9 November 2026: stronger remaining-year guidance and healthy autumn availability; subsequent winter dispatch and collections confirm the direction.
Lowabout 1 chance in 10 of worse
Q4-2026
Sales$6.9B−15% vs base
Adjusted EPS$2.35−21% vs base
Capital spending$1.30B
Free cash flow$0
FCF walk and spending detail
Forecast dollars. Free cash flow is operating cash flow less capital spending.
| net income (low case) | $697M |
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| depreciation, amortization and accretion including nuclear fuel and contract amortization | $1.17B |
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| deferred income taxes | $100M |
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| gains on decommissioning trust funds and fair value changes | −$100M |
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| working capital and collateral | −$567M |
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| Operating cash flow | $1.30B |
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| Less capital spending | −$1.30B |
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| Free cash flow | $0 |
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- net income (low case)
- Adjusted earnings of $2.45 on 354 million shares, less $170 million of items
- depreciation, amortization and accretion including nuclear fuel and contract amortization
- Run rate
- deferred income taxes
- Lower earnings
- gains on decommissioning trust funds and fair value changes
- Trust gains removed
- working capital and collateral
- Winter collateral and receivables build
Capital spending
Fourth-quarter spending is typically a little higher than the third. The allocation is my estimate; the remainder is unallocated.
| planned restart of Crane | $200M |
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| inclusion of Calpine | $400M |
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| co-location infrastructure | $100M |
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| Unallocated capital spending | $600M |
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| Total capital spending | $1.30B |
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planned restart of Crane My estimate
Cash used in investing activities was ($5,101) million and ($1,758) million for the six months ended June 30, 2026 and 2025, respectively. The change is primarily related to cash paid, net of cash acquired, for the Calpine acquisition and an increase in capital expenditures related to the planned restart of Crane, inclusion of Calpine, and co-location infrastructure. See Note 2 — Mergers, Acquisitions, and Dispositions of the Combined Notes to Consolidated Financial Statements for additional information.
inclusion of Calpine My estimate
Cash used in investing activities was ($5,101) million and ($1,758) million for the six months ended June 30, 2026 and 2025, respectively. The change is primarily related to cash paid, net of cash acquired, for the Calpine acquisition and an increase in capital expenditures related to the planned restart of Crane, inclusion of Calpine, and co-location infrastructure. See Note 2 — Mergers, Acquisitions, and Dispositions of the Combined Notes to Consolidated Financial Statements for additional information.
co-location infrastructure My estimate
Cash used in investing activities was ($5,101) million and ($1,758) million for the six months ended June 30, 2026 and 2025, respectively. The change is primarily related to cash paid, net of cash acquired, for the Calpine acquisition and an increase in capital expenditures related to the planned restart of Crane, inclusion of Calpine, and co-location infrastructure. See Note 2 — Mergers, Acquisitions, and Dispositions of the Combined Notes to Consolidated Financial Statements for additional information.
Speaker not named: We expect to invest approximately $3.9 billion during 2026 and 2027 to add new megawatts and enhanced performance and longevity of the existing fleet across all fuel types.
Three ways the low case happens
These levers explain the outcome together; each is not a separate one-in-ten event.
- **Winter demand disappoints.** Mild weather and low gas prices can restrain power revenue. Lower dispatch and weaker customer margins reduce fourth-quarter sales and adjusted earnings; lower fuel pass-through also compresses revenue.
WatchSoft early-winter demand and weak realized gas-generation margins.
Analyst reasoning
- Analyst CA mild summer and early winter across PJM and ERCOT
- **Autumn outages run long.** Unavailable plants need replacement power to meet customer commitments. Less generation lowers sales while repair and replacement costs depress adjusted earnings. Routine fuel and maintenance spending remain necessary.
WatchRefueling overruns and higher replacement purchases.
Analyst reasoning
- Analyst BUnplanned nuclear or natural gas forced outages or extended refueling outage durations requiring costly spot market replacement power purchases and higher maintenance expenses
- **Disposals and integration squeeze the remainder.** Closing dates and remaining costs change the earnings retained after summer. Lost plant contribution and integration expenses weaken earnings; year-end collateral and payables consume cash. Slower discretionary work only partly cushions free cash flow.
WatchClosing notices, integration costs and cash used by collateral.
Analyst reasoning
- Analyst DDivestiture timing and integration costs weigh on the second half
The downside combines weak winter demand, costly outages and disappointing retained-fleet margins, producing sales of $6.9B and adjusted earnings per share of $2.35. Analyst F's sales fall furthest, to $6.8B, with lower gas prices reducing fuel-related revenue. Analysts A and D share the lowest adjusted earnings endpoint of $2.15 for Analyst A and adjusted earnings per share of $2.15 for Analyst D. Analyst A weights early plant disposals heavily; Analyst D combines weak operations with integration and year-end cash pressure. These levers describe a combined case, not independent events. Winter collateral needs reduce cash while committed investment continues.
The later disposal timetable does not require all plants to have left in September. Weak winter operations can nevertheless reduce earnings from the assets that remain.
The seven lows run from $6.8B (Analyst F) to $7.5B (Analyst B).
First sign9 November 2026: the annual outlook and autumn outage update show less earnings left for year-end; winter demand then tests the case.
The odds the analysts give
Two questions each analyst answers with a probability.
Sales: the company's own normal, its year-over-year growth over the last eight quarters, −7.1% to +63.8%.
Growth above +63.8% on Q4 2025, the company's highest in eight quarters (Q1 2026)
6%the seven: 1% to 12%
On Q4 2025's $6.07B that is fourth-quarter sales above $9.95B.
Growth below −7.1%, the company's lowest in eight quarters (Q4 2024)
0.2%the seven: 0.2% to 5%
On Q4 2025's $6.07B that is fourth-quarter sales below $5.64B.
Together: 6.2% odds of a quarter outside the company's normal.
Adjusted EPS: the company's own normal, its year-over-year growth over the last eight quarters, −5.7% to +40.2%.
Growth above +40.2% on Q4 2025, the company's highest in eight quarters (Q4 2024)
34%the seven: 20% to 42%
On Q4 2025's $2.30 that is fourth-quarter adjusted EPS above $3.22.
Growth below −5.7%, the company's lowest in eight quarters (Q4 2025)
4%the seven: 2% to 11%
On Q4 2025's $2.30 that is fourth-quarter adjusted EPS below $2.17.
Together: 38% odds of a quarter outside the company's normal.
Surfaced outlier views
For Q4-2026 the seven analysts sit within 6.2% of the PricedIn number on sales and within 11.1% on adjusted EPS. The furthest, and why:
Analyst G · Q4-2026: sales $8.60B, the highest of the seven (PricedIn $8.10B)
WhyAnalyst G retains a larger acquired generation and customer-sales contribution, without extrapolating the unusually strong first-quarter revenue. It explicitly recognizes that the final required disposal may close only by year-end. Analyst G's purchased power and fuel expense is $4.6B, so the larger sales base is not all additional profit.
My fourth-quarter downside does not require every sale to have closed in September, nor does my base assume all depreciation and fixed costs of sold plants remain forever.
Analyst C · Q4-2026: adjusted EPS $3.30, the highest of the seven (PricedIn $2.97)
WhyAnalyst C puts more of the remaining annual earnings into the fourth quarter, relying on capacity revenue, commercial margins and fewer diluted shares. It also assumes more second-half recognition of Illinois credits, rather than treating spring credit timing as the year-end run rate. Its high adjusted earnings are therefore a timing and earnings-mix call, not a high-sales forecast.
This shapes my Q3/Q4 split (more second-half recognition) and is a modest 2027 headwind already reflected in my flat-to-up FY2027 middle.
The cases
The analyst with the highest 1-in-10 high argues the bull case; the one with the lowest 1-in-10 low argues the bear case. Each claim stands on a line the harness replays. The other analysts adopt a line or deny in a sentence, before their finals.
The bull case · Analyst D · Q4-2026: sales $10.1B, adjusted EPS $4.10, as the 1-in-10 high
The caseFourth-quarter sales of $10.1 billion sits below the $11,122 million already printed in the first quarter, a winter quarter that included winter storm Fern, when the grid operator called operating reserves and the business still ran. The company defines very cold winter weather as favorable because it raises demand for electricity and natural gas, and the Brazos sale is one 606-megawatt plant expected to close by year-end, too small to pull a cold, well-positioned quarter under $10 billion if hedge marks turn positive as they did in the first half. Adjusted earnings of $4.10 is the margin version of that quarter, not the mark-to-market: Fern showed volume can arrive with a higher cost to serve, so this tail needs the commercial book to keep the spreads, on top of the higher PJM capacity prices and customer-margin optimization that already lifted the second quarter.
11122000000
While the business performed well operationally through the storm, the extended nature of the event caused the grid operator to call on operating reserves to support system reliability.
With respect to the electric business, very warm weather in summer months and, with respect to the electric and natural gas businesses, very cold weather in winter months is generally referred to as “favorable weather conditions” because those weather conditions result in increased demand for electricity and natural gas.
a 606 MW natural gas-fired plant in ERCOT for $860 million before closing adjustments
We expect the transaction to close by the end of this year.
Operating revenues include unrealized gains of $995 million and losses of $201 million for the six months ended June 30, 2026 and 2025, respectively.
Speaker not named: CalPine, higher capacity prices in PJM, and strong performance from our commercial business
Verdicts: adopted by 0, denied by 6
The bear case · Analyst A · Q4-2026: sales $6.80B, adjusted EPS $2.00, as the 1-in-10 low
The caseThe fourth quarter is the first quarter of the merged year with no summer behind it: the PJM and ERCOT units that management now assumes close inside the third quarter stop producing revenue, while the purchase-accounting depreciation and the fixed operating cost they carried do not leave, and the company's own deck concedes that its 2026 figures still include earnings from assets to be divested in the second half. A mild start to winter costs the fleet twice over, because the annual report says plainly that mild weather reduces demand, and Texas gas economics are already sliding, with the company's reference ERCOT North spark spread at $16.16 a megawatt hour for 2027 against $21.85 for 2026. Adjusted earnings have also been leaning on fair-value marks that reverse as easily as they arrive, as the $340 million after-tax gain booked in the second quarter shows, so a fourth quarter that shades the other way takes earnings down with sales. That is how fourth-quarter revenue reaches about $6.8 billion and adjusted earnings per share about $2.00, both far below what the second half of the raised full-year range requires.
2026 disclosures include earnings contribution from assets to be divested in 2H 2026
Conversely, mild weather reduces demand.
$21.85$16.16ERCOT – N ATC Spark Spread ($/MWh)
$0.94$340Unrealized (Gain) Loss on Fair Value
Verdicts: adopted by 0, denied by 6
Watch
9 November 2026 · before the open · 09:00 ET: watch the remaining-year earnings outlook, autumn refueling progress and disposal dates. Through year-end, follow winter dispatch, customer margins and whether collections release cash or collateral absorbs it.