Constellation Energy (CEG) revealed on Friday a narrowed first-quarter profit on weaker performances in two of its three business units, though it express optimism that it will be able to widen its customer base this year and close on a proposed merger with Exelon, sending its shares higher in morning trade.

Revenue for the Baltimore-based energy company was $3.57 billion, down slightly from $3.58 billion a year ago, short of average analyst estimates polled by Thomson Reuters of $4.12 billion.

For the three months ended March 31, Constellation posted net income of $70.4 million, or 35 cents a share, compared with $191.5 million, or 95 cents a share, in the same quarter last year. Excluding one-time costs, the company said it earned 63 cents a share, still short of Wall Street estimates.

An increase in Constellation's BGE segment was offset by a lower generation profit and a new energy loss of 8 cents a share, due primarily to the timing of certain contract assignment related to its divested international commodities operation.

But the company expressed optimism that it will be able to meet full-year goals despite near-term challenges. 

Constellation began integrating Boston Generating’s fleet of gas plants during the quarter and continued with its expansion into the residential competitive electric market in Illinois. In March the company announced a 20-year agreement to provide electricity to the U.S. State Dept.

“Our continuing strategy to grow assets and expand our industry-leading, customer-driven business got off to a fast start in 2011,” Constellation CEO Mayo Shattuck said in a statement.

Constellation said it sees significant opportunity to accelerate the growth of its customer base and execute the proposed merger announced last week with Exelon (EXC). The company reaffirmed its fiscal guidance in the range of $3.10 to $3.40 a share. Analysts are predicting a profit of $3.24 a share.

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