) unit Constellation has received a 2-year electricity supply
contract, worth $46.8 million, from the U.S. Defense Logistics
Agency ("DLA"). This contract has been awarded following a
competitive bidding procedure. The electricity-offering is
expected to start from December 2012.
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Per the contract, the company will provide up to 780,600
megawatt-hours ("MWh") of electricity to the six U.S. Navy
facilities in the District of Columbia ("D.C.") area. The
facilities are Joint Base Anacostia Bolling, Naval Maritime
Intelligence Center, Naval Surface Warfare Center Carderock, the
Navy Medical Center Bethesda, the U.S. Naval Observatory
Washington and Washington Navy Yard.
The Defense Logistics Agency is a part of the U.S. Department of
Defense. It provides combat support including logistics,
acquisition and technical services to the U.S. Army, Navy, Air
Force and Marine Corps, other several civilian and federal
agencies, and allied forces in both peacetime and wartime.
It is evident from Exelon's past contracts that it has a strong
rapport with the U.S government agencies for the last 20 years.
In November, 2012, Texas Public Power Pool chose Constellation to
deliver low-cost electricity to its members for 3 years.
Currently, Constellation is providing customized services to
approximately 380 federal government sites and 4,000 government
customers in 47 states.
Utility providers' performance depends on the strength of their
electricity-contract-pipeline. We consider the current contract
as a positive step for Exelon's future operating as well as
financial results. These types of agreements ensure a steady
future cash-inflow while subsequently enabling Exelon to improve
its upcoming top and bottom line numbers.
Exelon merged with Constellation earlier this year and has
experienced positive impacts related to this merger in the third
quarter of 2012. Riding on Constellation's strong contribution,
the company's quarterly revenue increased 34.6% year over year to
$7.02 billion. We expect Exelon to realize further synergies
However, we expect Exelon's fourth-quarter and full-year 2012
results to some extent be negatively impacted by the Hurricane
Chicago, Illinois-based Exelon Corporation engages in generation,
transmission, distribution and sale of electricity to the
residential, commercial, industrial and wholesale customers.
With a market capitalization of $25.57 billion, the company has
19,267 full time employees. Like its peer
), Exelon Corporation also has a short-term Zacks #3 Rank (Hold