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NRG Energy Q3 Earnings Beat Estimates on LS Power Asset Gains
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Key Takeaways
NRG's Q3 earnings of $4.68 per share beat estimates by 36.05%, while revenues jumped 24% to $9.47 billion.
LS Power asset contributions, higher East capacity prices & stronger Texas margins fueled NRG's earnings.
NRG announced a $4B asset sale, reaffirmed 2026 guidance and projected 2027 EPS of $8.05-$10.05.
NRG Energy, Inc. (NRG - Free Report) reported third-quarter 2026 adjusted earnings of $4.68 per share, which surpassed the Zacks Consensus Estimate of $3.44 by 36.05%. The bottom line increased 68.3% from $2.78 in the year-ago quarter.
This improvement was driven by contributions from acquired LS Power assets, higher capacity prices in the East and stronger Texas margins.
Revenues of NRG Energy
Revenues increased 24% year over year to $9.47 billion, beating the consensus estimate of $6.73 billion by 40.63%. Total revenues rose from $7.64 billion in the third quarter of 2025, supported by the company's expanded generation portfolio and retail operations.
On a segment-level adjusted basis, Texas revenues reached $3.73 billion compared with $3.38 billion a year earlier. East revenues increased to $4.46 billion from $3 billion, while West/Other revenues were $692 million compared with $674 million.
Vivint Smart Home generated revenues of $609 million, up from $552 million in the prior-year quarter.
NRG Energy, Inc. Price, Consensus and EPS Surprise
Adjusted EBITDA increased 67.1% year over year to $2.01 billion from $1.21 billion. Adjusted net income rose to $983 million from $537 million, reflecting stronger operating contributions, partially offset by higher financing and depreciation expenses.
Total operating costs and expenses increased 16.1% to $8.38 billion. Cost of operations rose to $7.24 billion from $6.24 billion, while depreciation and amortization increased to $510 million from $360 million.
Selling, general and administrative expenses were $619 million compared with $612 million a year earlier. Operating income climbed to $1.08 billion from $414 million, while interest expenses increased to $302 million from $187 million.
NRG Energy's Segment Performance
Texas adjusted EBITDA increased 26.1% to $1.02 billion from $807 million. The improvement reflected higher retail margins and favorable weather conditions during the quarter.
East adjusted EBITDA surged to $614 million from $107 million, benefiting from acquired generation assets, CPower contributions and higher realized capacity prices. West/Other adjusted EBITDA totaled $64 million compared with $13 million, primarily reflecting lower operating expenses following a lease expiration.
Vivint Smart Home adjusted EBITDA increased 14% to $317 million from $278 million. Higher new customer additions and improved monthly recurring service margins per customer supported the segment's performance.
NRG Advances Asset Sale and Data Center Plans
NRG entered into a definitive agreement to sell six natural gas-fired generation assets totaling 4.9 gigawatts to LS Power for $4 billion in cash, subject to adjustments. The transaction is expected to close in the second quarter of 2027, pending regulatory approvals.
The company will retain its entire PJM portfolio and CPower business acquired in January 2026. Proceeds are expected to support additional share repurchases, debt reduction and potential growth investments.
NRG's previously announced 1.2-GW Bring Your Own Power data center project remains on track. The initiative aims to support growing electricity demand by developing dispatchable generation alongside new large-load customers.
NRG Energy's Financial Highlights
As of Sept. 30, 2026, cash and cash equivalents totaled $148 million compared with $4.71 billion at the end of 2025. Long-term debt and finance leases increased to $21.84 billion from $16.41 billion.
Total liquidity was $6.03 billion compared with $9.63 billion at year-end 2025, primarily reflecting funding for the LS Power acquisition.
Cash provided by operating activities reached $2.05 billion during the first nine months of 2026 compared with $1.79 billion a year earlier. Capital expenditures totaled $1.18 billion compared with $849 million.
Free cash flow before growth investments increased to $2.20 billion from $2.04 billion during the nine-month period.
NRG Reaffirms 2026 Guidance, Initiates 2027 View
NRG Energy reaffirmed its 2026 adjusted earnings guidance of $7.90-$9.90 per share. Adjusted net income is expected to be $1.69-$2.12 billion, while adjusted EBITDA is projected at $5.33-$5.83 billion. Free cash flow before growth investments is anticipated at $2.80-$3.30 billion.
For 2027, the company initiated adjusted earnings guidance of $8.05-$10.05 per share. Adjusted EBITDA is expected to range from $5.50 billion to $6 billion, while free cash flow before growth investments is projected at $2.90-$3.40 billion. These estimates exclude the anticipated impact of the announced asset sale.
NRG's 2027 base capital allocation plan includes $1 billion each for debt reduction and share repurchases. The company also plans to increase its annual common dividend by 8% to $2.05 per share.
Following the asset sale, NRG expects additional debt reduction and increased shareholder returns, including incremental share repurchases beginning in the fourth quarter of 2026.
IDACORP, Inc. (IDA - Free Report) reported third-quarter 2026 earnings of $2.73 per share, which surpassed the Zacks Consensus Estimate of $2.51 by 8.8%. The bottom line also increased 20.8% from $2.26 in the year-ago quarter. The year-over-year improvement was primarily driven by higher Idaho base rates, continued customer growth and increased revenues from large contract customers.
Total revenues in the third quarter of 2026 were $608 million, outpacing the Zacks Consensus Estimate of $561 million by 8.4%. The top line also rose 15.9% from $524.4 million in the year-ago quarter.
PG&E Corporation (PCG - Free Report) reported third-quarter 2026 adjusted earnings per share (EPS) of 41 cents, which missed the Zacks Consensus Estimate of 42 cents by 2.4%. The bottom line also declined 18% from the year-ago quarter’s figure of 50 cents.
PCG reported third-quarter total revenues of $6.19 billion, down 1% from $6.25 billion registered in the year-ago period. The top line also missed the Zacks Consensus Estimate of $6.59 billion by 6%.
CMS Energy Corporation (CMS - Free Report) reported third-quarter 2026 adjusted earnings of $1.44 per share, which surpassed the Zacks Consensus Estimate of $1.34 by 7.5%. The bottom line increased 54.8% from 93 cents in the year-ago quarter.
Operating revenues totaled $2.183 billion, which beat the Zacks Consensus Estimate of $2.178 billion by 0.2%. The top line also increased 8% from $2.02 billion in the prior-year quarter.
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NRG Energy Q3 Earnings Beat Estimates on LS Power Asset Gains
Key Takeaways
NRG Energy, Inc. (NRG - Free Report) reported third-quarter 2026 adjusted earnings of $4.68 per share, which surpassed the Zacks Consensus Estimate of $3.44 by 36.05%. The bottom line increased 68.3% from $2.78 in the year-ago quarter.
This improvement was driven by contributions from acquired LS Power assets, higher capacity prices in the East and stronger Texas margins.
Revenues of NRG Energy
Revenues increased 24% year over year to $9.47 billion, beating the consensus estimate of $6.73 billion by 40.63%. Total revenues rose from $7.64 billion in the third quarter of 2025, supported by the company's expanded generation portfolio and retail operations.
On a segment-level adjusted basis, Texas revenues reached $3.73 billion compared with $3.38 billion a year earlier. East revenues increased to $4.46 billion from $3 billion, while West/Other revenues were $692 million compared with $674 million.
Vivint Smart Home generated revenues of $609 million, up from $552 million in the prior-year quarter.
NRG Energy, Inc. Price, Consensus and EPS Surprise
NRG Energy, Inc. price-consensus-eps-surprise-chart | NRG Energy, Inc. Quote
Highlights of NRG's Q3 Earnings Release
Adjusted EBITDA increased 67.1% year over year to $2.01 billion from $1.21 billion. Adjusted net income rose to $983 million from $537 million, reflecting stronger operating contributions, partially offset by higher financing and depreciation expenses.
Total operating costs and expenses increased 16.1% to $8.38 billion. Cost of operations rose to $7.24 billion from $6.24 billion, while depreciation and amortization increased to $510 million from $360 million.
Selling, general and administrative expenses were $619 million compared with $612 million a year earlier. Operating income climbed to $1.08 billion from $414 million, while interest expenses increased to $302 million from $187 million.
NRG Energy's Segment Performance
Texas adjusted EBITDA increased 26.1% to $1.02 billion from $807 million. The improvement reflected higher retail margins and favorable weather conditions during the quarter.
East adjusted EBITDA surged to $614 million from $107 million, benefiting from acquired generation assets, CPower contributions and higher realized capacity prices. West/Other adjusted EBITDA totaled $64 million compared with $13 million, primarily reflecting lower operating expenses following a lease expiration.
Vivint Smart Home adjusted EBITDA increased 14% to $317 million from $278 million. Higher new customer additions and improved monthly recurring service margins per customer supported the segment's performance.
NRG Advances Asset Sale and Data Center Plans
NRG entered into a definitive agreement to sell six natural gas-fired generation assets totaling 4.9 gigawatts to LS Power for $4 billion in cash, subject to adjustments. The transaction is expected to close in the second quarter of 2027, pending regulatory approvals.
The company will retain its entire PJM portfolio and CPower business acquired in January 2026. Proceeds are expected to support additional share repurchases, debt reduction and potential growth investments.
NRG's previously announced 1.2-GW Bring Your Own Power data center project remains on track. The initiative aims to support growing electricity demand by developing dispatchable generation alongside new large-load customers.
NRG Energy's Financial Highlights
As of Sept. 30, 2026, cash and cash equivalents totaled $148 million compared with $4.71 billion at the end of 2025. Long-term debt and finance leases increased to $21.84 billion from $16.41 billion.
Total liquidity was $6.03 billion compared with $9.63 billion at year-end 2025, primarily reflecting funding for the LS Power acquisition.
Cash provided by operating activities reached $2.05 billion during the first nine months of 2026 compared with $1.79 billion a year earlier. Capital expenditures totaled $1.18 billion compared with $849 million.
Free cash flow before growth investments increased to $2.20 billion from $2.04 billion during the nine-month period.
NRG Reaffirms 2026 Guidance, Initiates 2027 View
NRG Energy reaffirmed its 2026 adjusted earnings guidance of $7.90-$9.90 per share. Adjusted net income is expected to be $1.69-$2.12 billion, while adjusted EBITDA is projected at $5.33-$5.83 billion. Free cash flow before growth investments is anticipated at $2.80-$3.30 billion.
For 2027, the company initiated adjusted earnings guidance of $8.05-$10.05 per share. Adjusted EBITDA is expected to range from $5.50 billion to $6 billion, while free cash flow before growth investments is projected at $2.90-$3.40 billion. These estimates exclude the anticipated impact of the announced asset sale.
NRG's 2027 base capital allocation plan includes $1 billion each for debt reduction and share repurchases. The company also plans to increase its annual common dividend by 8% to $2.05 per share.
Following the asset sale, NRG expects additional debt reduction and increased shareholder returns, including incremental share repurchases beginning in the fourth quarter of 2026.
NRG’s Zacks Rank
NRG Energy has a Zacks Rank #4 (Sell) at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Releases
IDACORP, Inc. (IDA - Free Report) reported third-quarter 2026 earnings of $2.73 per share, which surpassed the Zacks Consensus Estimate of $2.51 by 8.8%. The bottom line also increased 20.8% from $2.26 in the year-ago quarter. The year-over-year improvement was primarily driven by higher Idaho base rates, continued customer growth and increased revenues from large contract customers.
Total revenues in the third quarter of 2026 were $608 million, outpacing the Zacks Consensus Estimate of $561 million by 8.4%. The top line also rose 15.9% from $524.4 million in the year-ago quarter.
PG&E Corporation (PCG - Free Report) reported third-quarter 2026 adjusted earnings per share (EPS) of 41 cents, which missed the Zacks Consensus Estimate of 42 cents by 2.4%. The bottom line also declined 18% from the year-ago quarter’s figure of 50 cents.
PCG reported third-quarter total revenues of $6.19 billion, down 1% from $6.25 billion registered in the year-ago period. The top line also missed the Zacks Consensus Estimate of $6.59 billion by 6%.
CMS Energy Corporation (CMS - Free Report) reported third-quarter 2026 adjusted earnings of $1.44 per share, which surpassed the Zacks Consensus Estimate of $1.34 by 7.5%. The bottom line increased 54.8% from 93 cents in the year-ago quarter.
Operating revenues totaled $2.183 billion, which beat the Zacks Consensus Estimate of $2.178 billion by 0.2%. The top line also increased 8% from $2.02 billion in the prior-year quarter.