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Will NRG Energy Beat Analysts’ 3Q17 Estimates?

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NRG to report on November 2

Houston-based NRG Energy (NRG) will report its third quarter financial results on November 2, 2017. Wall Street analysts expect NRG to report earnings of $0.94 per share for the quarter ended on September 30, 2017. It reported earnings of $0.64 per share in the same quarter last year.

NRG stock is up more than 100% so far this year. Its 3Q17 earnings might set the tone for the stock going forward. NRG management is working on its transformation plan, which mainly focuses on trimming down the company’s total debt and streamlining its merchant power operations. Investors might get some important insights about how the plan will be executed going forward. NRG stock zoomed 30% in a single day when the management rolled out its transformation plan in July this year.

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Earnings drivers

NRG is estimated to report total revenues of $3.5 billion in 3Q17 against revenues of $4.0 billion in the corresponding quarter last year. Management has set its guidance for adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) at $2,565 million to $2,765 million for the full-year 2017. It’s estimated to report EBITDA of $794 million in 3Q17.

NRG Energy’s transformation plan is likely to simplify its operations. Its $4 billion asset sale of its Renewables and NRG Yield (NYLD) divisions is expected to substantially cut down total debt substantially. However, NRG has been struggling for the past few years due to lower wholesale power prices and poor electricity demand growth. Lower margins and lower capacity revenues could continue to have a negative impact on NRG Energy’s quarterly earnings.

Utility giants Duke Energy (DUK) and Dominion Energy (D) will report their third quarter financial earnings on November 3 and October 30, 2017.

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