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Analyzing NRG Energy before Its Q4 Earnings

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NRG Energy

NRG Energy (NRG) is scheduled to report its fourth-quarter and fiscal 2018 earnings on February 28. According to analysts’ estimates, NRG Energy will report an EPS of $0.03 for the quarter ending December 31. The company reported an EPS of $0.25 in the fourth quarter of 2017.

NRG Energy stock is trading close to its 52-week high. The stock has rallied almost 70% over the past 12 months and significantly outperformed broader utilities (XLU). We’ll have to see if the quarterly numbers fuel the company’s upward march.

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Earnings highlights

According to analysts’ estimates, NRG Energy will report total revenues of $1,873 million for the quarter ending December 31. In the same quarter in 2017, the company reported revenues of $2,497 million. NRG Energy seems to be on track with its transformation plan. The plan focuses on streamlining NRG Energy’s business and reducing its total debt. The plan also includes asset sales of NRG Yield and the renewables business, which was closed in the third quarter.

According to the plan, NRG Energy has reduced its total debt burden in the last few quarters. At the beginning of 2018, the debt was close to $17 billion. At the end of the third quarter, the debt was ~$6.5 billion.

NRG Energy has given an adjusted EBITDA guidance range of $1.7 billion–$1.8 billion for 2018 and $1.85 billion–$2.05 billion for 2019, which represents 11% growth year-over-year.

NRG Energy cut its dividends per share 79% in the second quarter of 2016 when cash retention became vital. NRG Energy has beat its peers in terms of returns in the last few years. The company has almost quadrupled in the last two and a half years.

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