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Why Is NRG (NRG) Up 1.9% Since Last Earnings Report?

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A month has gone by since the last earnings report for NRG Energy (NRG - Free Report) . Shares have added about 1.9% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is NRG due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

NRG Energy Earnings Rise Y/Y, Revenues Top Estimates

NRG Energy posted earnings of 87 cents per share in 2018, against a loss of $6.79 a year ago.

Revenues

NRG Energy posted revenues of $2,091 million in the quarter under review, which beat the Zacks Consensus Estimate of $1,977 million by 5.7%.

In 2018, the company generated revenues of $9.47 billion that beat the Zacks Consensus Estimate of 9.20 billion by 3%. The top line improved from $9,074 million in 2017.

Highlights of the Release

Fourth-quarter Adjusted EBITDA was $273 million compared with $297 million a year ago.

The company realized $532 million of its 2018 cost savings target and $32 million in margin enhancement, as part of the Transformation Plan.

During the quarter, NRG Energy completed $250 million of the additional $500 million share repurchase program that was announced during the third quarter of 2018 earnings call.

Financial Highlights

As of Dec 31, 2018, NRG Energy had cash and cash equivalents of $563 million compared with $770 million as of Dec 31, 2017.

As of Dec 31, 2018, the company’s long-term debt and capital leases amounted to $6,449 million compared with $9,180 million as of Dec 31, 2017.

The company’s net cash provided operating activities at the end of 2018 was $1,377 million compared with $1,610 million at the end of 2017.

Capital expenditure at the end of Dec 31, 2018, was $388 million compared with $254 million at the end of Dec 31, 2017.

Guidance

The company expects 2019 adjusted EBITDA guidance in the range of $1,850-$2,050 million and free cash flow before growth investments in the range of $1,250-$1,450 million.
 

How Have Estimates Been Moving Since Then?

Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -27.98% due to these changes.

VGM Scores

Currently, NRG has a subpar Growth Score of D, a grade with the same score on the momentum front. However, 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.

Outlook

NRG has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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