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A Look at NRG Energy’s 4Q16 Revenues

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NRG Energy’s revenues

One of the largest independent power producers, NRG Energy (NRG) reported its 4Q16 and fiscal 2016 results on February 28, 2017. NRG reported total revenues of ~$2.5 billion for 4Q16, compared with its 4Q15 revenues of $3.0 billion.

NRG Energy’s performance in 4Q16 was negatively affected by lower margins and lower capacity prices, which were partially offset by lower operating costs.

NRG rev

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Revenue drivers

NRG Energy (NRG) reported total revenues of $12.3 billion in fiscal 2016, compared with its fiscal 2015 revenues of $14.6 billion, posting a fall of 15.8% year-over-year. NRG Energy’s total power generation in 4Q16 fell 2%, compared to its total power generation in 4Q15. Along similar lines, its total power generation fell 14% in fiscal 2016 when compared with fiscal 2015.

Merchant power producers in the US, including NRG Energy, have seen weakness in the past several quarters due to weaker power demand and lower wholesale power prices.

The total operating capacity of NRG Energy’s Renewables portfolio rose 6.4% in 4Q16, compared with 3Q16. NRG’s Renewables and NRG Yield segments are performing relatively well, which offset the weakness in the company’s Merchant Power segment to some extent.

NRG Energy stock lost 1.3% on its earnings day and closed at $16.56. The stock has gained 35% so far this year. Comparatively, peer merchant power players Dynegy (DYN) and Calpine (CPN) have traded more or less flat year-to-date.

In the next article, we’ll take a look at NRG Energy’s 4Q16 earnings and its earnings drivers.

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