Merchant power player NRG Energy (NRG) is slated to report its first-quarter earnings on May 2. According to consensus estimates, NRG will report earnings of $0.56 per share for the quarter, which ended on March 31. In the same quarter last year, NRG reported earnings of $0.87 per share.
NRG’s business mix improved over the last few years, driven by a transformation plan devised by activist shareholders. Since then, the stock has more than doubled over the last two years, outperforming broader utilities (XLU). It will be interesting to see how NRG stock reacts to its Q1 earnings.
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Based on consensus estimates, NRG will post total revenues of $2.15 billion in Q1 2019 against revenues of $2.42 billion in the same period last year, which represents a revenue fall of approximately 11% year-over-year.
NRG management has provided an adjusted EBITDA guidance range of $1.85 billion–$2.05 billion in 2019, implying an increase of 10% year-over-year. The contribution from its Retail segment increased compared to its mainstay Generation segment over the last couple of years. For 2019, NRG management expects earnings from both these segments to grow ~10% compared to 2018.
As per the transformation plan, NRG Energy trimmed down its total debt burden significantly in the last few quarters. At the beginning of 2018, the debt was close to $17 billion. At the end of the fourth quarter, NRG’s debt stood at ~$6.5 billion.
NRG Energy completed a $1.5 billion share repurchase program in 2018, and it intends to repurchase more—worth $1.0 billion shares—this year.