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Why Is NRG (NRG) Down 14.7% 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 lost about 14.7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is NRG due for a breakout? 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 drivers.

NRG Energy's Q1 Earnings Miss, Revenues Beat Estimates    

NRG Energy delivered earnings of 34 per share in first-quarter 2019, which missed the Zacks Consensus Estimate of 39 cents by 12.8%. The figure declined 61.8% on a year-over-year basis.

Revenues

NRG Energy generated revenues of $2,165 million in the quarter, which beat the Zacks Consensus Estimate of $2,072 million by 4.5%. The top line increased 5% from the year-ago quarter’s figure.

Highlights of the Release

First-quarter Adjusted EBITDA was $333 million compared with $336 million in the year-ago quarter.

As part of the Transformation Plan, the company realized $131 million of its 2019 cost savings target.

During the quarter, NRG Energy completed $500 million of the $1-billion 2019 share repurchase program.

Financial Highlights

As of Mar 31, 2019, the company had cash and cash equivalents of $859 million compared with $563 million as of Dec 31, 2018.

As of Mar 31, 2019, the company’s long-term debt and capital leases amounted to $6,366 million compared with $6,449 million as of Dec 31, 2018.

The company’s net cash used in operating activities in the first quarter was $127 million compared with $350 million cash provided by operating activities in the year-ago quarter.

Capital expenditure in the first quarter was $49 million compared with $155 million in the prior-year quarter.

Guidance

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

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

Currently, NRG has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. 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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