* PSEG Q2 EPS beats Street, backs full-year view
* Constellation Q2 profit lags, cuts FY forecast
* PSEG ups 2011-2013 capex by 3 pct to $6.9 bln
* El Paso Q2 profit beats; FY view narrowed
By Krishna N Das
BANGALORE, Aug 3 (Reuters) - Lower costs and an improvement in gas and electricity rates helped utility owner Public Service Enterprise Group (PSEG) post a market-beating quarterly profit and back its forecast for the year, but plant outages hurt Constellation Energy .
U.S. utilities have been hit hard in the last two years because of lower natural gas prices and weak economic conditions.
The sustained decline in natural gas prices -- which tend to set rates for electricity -- have resulted in lower margins for companies whose plants operate on nuclear and coal fuel. Profit expectations, accordingly, have been diluted.
PSEG stood by its full-year operating earnings outlook of $2.50-$2.75 a share, compared with $3.12 it earned last year.
Constellation, which has agreed to be bought by Exelon Corp , lowered its 2011 earnings forecast by 5 cents to $3.05-$3.35, largely on longer-than-anticipated outages at its nuclear joint venture facilities.
Constellation CEO Mayo Shattuck III said: "The merger (with Exelon) will provide us with a diverse and adaptable platform on which to grow market share and deliver strong results."
PSEG too sounded a desire to expand by raising its 2011-2013 capital investment program by nearly 3 percent to $6.9 billion.
"Supportive regulation at the state and federal level has been a foundation of our investments," CEO Ralph Izzo said.
Constellation reported an adjusted profit of 76 cents a share for April-June. Analysts had projected 86 cents per share excluding special items, according to Thomson Reuters I/B/E/S.
PSEG's second-quarter operating income fell 6 percent to $301 million, or 59 cents a share, beating estimates of 55 cents a share.
Smaller rival El Paso Electric Co's second-quarter net income rose 53 percent to $33 million, or 78 cents a share, easily topping Wall Street view of 63 cents.
"The increase in earnings was primarily driven by hotter than normal weather and the new seasonal rates in Texas, which were effective July 1, 2010," El Paso CEO David Stevens said.
As a result, El Paso raised the lower end of its prior full-year earnings outlook by 10 cents to $2.20-$2.50 a share. (Reporting by Krishna N Das and Vaishnavi Bala; Editing by Gopakumar Warrier)