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What's in Store for NRG Energy (NRG) This Earnings Season?

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NRG Energy, Inc. (NRG - Free Report) is scheduled to report third-quarter 2018 results on Nov 8, before market opens. In the last reported quarter, the company’s reported earnings of 31 cents missed the Zacks Consensus Estimate of 86 cents by 63.95%. Let’s see how things are shaping up for this earnings season.

Factors to Consider

NRG Energy’s three-year transformation plan, which was launched in July 2017, is making significant progress and is believed to be on track to meet all targets. The company expects to progress on margin enhancement program and results to be reflected in the second half of 2018. We believe to see reflections in the third quarter as well. We expect the company to gain from share buyback programs which will raise shareholders’ value.

During the third quarter, NRG Energy completed the sale of its renewables platform to Global Infrastructure Partners under the transformation plan. This deal contributed $1.3 billion in cash proceeds to the company and reduced $6.7-billion debt from its balance sheet.

The Zacks Consensus Estimate for earnings is pegged at 87 cents, reflecting a surge of 42.62% year over year.

Earnings Whisper

Our proven model does not conclusively show that NRG Energy  will beat estimates this season. This is because it does not have the right combination of two key ingredients. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings ESP: The company’s Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

NRG Energy, Inc. Price and EPS Surprise

NRG Energy, Inc. Price and EPS Surprise | NRG Energy, Inc. Quote

Zacks Rank: NRG Energy has a Zacks Rank #3. The company’s favorable Zacks Rank, when combined with 0.00% ESP, lowers the possibility of an earnings beat this season.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

Stocks to Consider

Here are some companies from the industry that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Pattern Energy Group Inc. is expected to release third-quarter results on Nov 5. It has an Earnings ESP of +100.00% and a Zacks Rank #3.

Pinnacle West Capital Corp. (PNW - Free Report) is expected to release third-quarter results on Nov 8. It has an Earnings ESP of +2.00% and a Zacks Rank #3.

Alliant Energy Corp. (LNT - Free Report) is expected to release third-quarter results on Nov 6. It has an Earnings ESP of +1.19% and a Zacks Rank #3.

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