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Which Factors Could Drive NRG Energy’s 2Q17 Earnings?

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NRG Energy: Earnings

Princeton, New Jersey–based NRG Energy (NRG) is set to report its 2Q17 financial results on August 3, 2017. Analysts expect NRG to report a loss of $0.09 per share for the quarter ended June 30, 2017. For 2Q16, NRG reported a loss of $0.25 per share.

NRG Energy stock has risen nearly 50% in the last ten trading sessions. Its upcoming quarterly results could set the tone for the stock going forward. NRG surged 30% on July 12, 2017, after its management released the company’s transformation plan.

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Earnings drivers

According to analyst estimates, NRG Energy is expected to report total revenues of $3.0 billion for the quarter ended June 30, 2017. This indicates an increase of 15% in revenues year-over-year compared to its revenues of $2.6 billion in 2Q16.

NRG Energy’s management is planning an asset sale of nearly $4 billion of its Renewables and NRG Yield (NYLD) divisions to cut down the total amount of debt. NRG Energy’s renewables and yieldco are relatively better-performing segments compared to its core business. We could see some useful insights on NRG Energy’s transformation plan from the company’s management during its earnings announcement.

Weak wholesale power prices

NRG Energy (NRG) is the country’s largest merchant power producer. It has been struggling for the last several quarters due to weak wholesale power prices and lower electricity demand growth. Lower margins and lower capacity revenues could negatively impact NRG Energy’s quarterly earnings.

US utility giant Duke Energy (DUK) plans to report its 2Q17 financial results on August 3. Southern Company (SO), a regulated utility giant located in Georgia, plans to report its quarterly earnings on August 2, 2017. You can read about Southern Company and how it is placed ahead of its earnings in What’s in Store for Southern Company’s 2Q17 Earnings?

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