About a month has gone by since the last earnings report for NRG Energy, Inc. (NRG - Free Report) . Shares have added about 1.8% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
NRG Energy Beats Q2 Earnings Estimates, Revenues Lag
NRG Energy reported earnings of 36 cents in the second quarter of 2017, surpassing the Zacks Consensus Estimate of a loss of 5 cents.
NRG Energy's quarterly operating revenues of $2,701 million lagged the Zacks Consensus Estimate of $3,032 million by 10.9%. However, revenues were up 20.2% from $2,248 million reported in the second quarter of 2016.
Highlights of the Release
Total operating costs and expenses in the quarter increased 17.2% to $2,402 million from $2,050 million a year ago.
The company’s adjusted EBITDA was $685 million in the second quarter of 2017, down 1.9% from $698 million a year ago.
The company incurred interest expenses of $247 million in the quarter, up 5.3% from $237 million in the year-ago quarter.
Highlights of the Release
As of Jun 30, NRG Energy had cash and cash equivalents of $752 million compared with $938 million as of Dec 31, 2016.
The company’s long-term debt and capital leases (excluding current portion) were $15,842 million compared with $15,957 million as of Dec 31, 2016.
The company’s net cash provided in operating activities in the first half of 2017 was $74 million against $811 million in the prior-year period.
Capital expenditure in second-quarter 2017 was $542 million, up 22.6% from $442 million in the year-ago period.
NRG reaffirmed its 2017 adjusted EBITDA guidance in the range of $2,565–$2,765 million and free cash flow before growth investments of 1,290–$1,490 million.
NRG Energy's announced $1B Transformation Plan to Help In Debt Reduction, effective cost saving initiatives to save $590 million in 2017 and strengthen its balance sheet.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.
At this time, NRG Energy's stock has an average Growth Score of C, a grade with the same score on the momentum front. The stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is primarily suitable for value investors while also being suitable for those looking for growth and momentum.
The stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.