NRG Posts Wider Q1 Loss, Beats Revs - Analyst Blog
07 May 2014 - 12:52AM
Zacks
NRG Energy, Inc. (NRG) reported first-quarter
2014 loss of 18 cents per share, wider than the Zacks Consensus
Estimate of a loss of 12 cents per share. The company posted a loss
of $1.03 per share in the prior-year quarter.
Revenue
In first-quarter 2014, NRG Energy's total operating revenues were
$3,486 million, surpassing the Zacks Consensus Estimate of $2,059
million by 69.3%. Reported revenues surged 67.5% from $2,081
million a year ago.
Highlights of the Release
In the quarter under review, NRG Energy's adjusted earnings before
interest, taxes, depreciation, and amortization (EBITDA) were $816
million, up 113.1% year over year on favorable performances from
the Retail, Wholesale - Gulf Coast - South Central, Wholesale -
Gulf Coast - East, Wholesale - Gulf Coast - West, NRG Yield and
Corporate segments. These were partially offset by decreases in
adjusted EBITDA from Wholesale - Gulf Coast - Texas, Other
Conventional and Alternate Energy segments.
The company’s total operating expenses escalated 41.7% year over
year to $3,325 million, primarily due to higher cost of operations
and depreciation expenses.
Quarterly operating income was $180 million compared with an
operating loss of $266 million a year ago.
NRG Energy's free cash flow (before growth investments) in
first-quarter 2014 was $487 million, up substantially from $141
million in the prior-year quarter.
Interest expenses increased 30.1% year over year to $255 million
primarily due to a higher debt level.
Financial Update
NRG Energy's cash and cash equivalents, as of Mar 31, 2014, were
$3,187 million versus $2,254 million as of Dec 31, 2013.
As of Mar 31, 2014, long-term debt and capital leases was $16,803
million versus $15,767 million as of Dec 31, 2013.
Net cash provided from operating activities during the first three
months of 2014 was $391 million versus net cash used by operating
activities of $124 million in the year-ago comparable period.
In first-quarter 2014, the company’s capital expenditures were $237
million, down from $813 million in the prior-year comparable
period.
Dividend Update
On Apr 21, 2014, NRG Energy announced that it will distribute
quarterly dividend of 14 cents per share, up 16.7% from the
previous pay out. The company will pay incremental dividend on May
15, 2014, to stockholders of record as of May 1. On an annualized
basis, the dividend rate will increase to 56 cents from 48
cents.
Guidance
NRG Energy increased its 2014 adjusted EBITDA guidance to the range
of $3,200 - $3,400 million from the previous projection of $2,700 -
$2,900 million.
The company’s 2014 free cash flow (before growth investments)
guidance is in the range of $1,200 - $1,400 million, up from the
earlier estimate of $950 -$1,150 million.
Other Earnings Releases
Public Service Enterprise Group Inc. (PEG)
reported first-quarter 2014 earnings of $1.01 per share, beating
the Zacks Consensus Estimate of 97 cents by 4.1%.
Our View
Despite reporting strong top-line results, a rise in the number of
shares outstanding and higher operating expenses led to unfavorable
earnings performance in first-quarter 2014.
NRG Energy completed several significant deals in the first few
months of 2014. The company acquired Edison
International’s (EIX) subsidiary Edison Mission Energy,
the competitive retail electricity business of Dominion
Resources, Inc. (D) and a residential solar company Roof
Diagnostics Solar. These transactions will enable the company to
increase its scale of operations besides expanding renewable
portfolio.
In addition to strengthening operations, the company is also
pursuing a practice to pay regular dividends, thereby maximizing
shareholder value.
NRG Energy currently has a Zacks Rank #1 (Strong Buy).
DOMINION RES VA (D): Free Stock Analysis Report
EDISON INTL (EIX): Free Stock Analysis Report
NRG ENERGY INC (NRG): Free Stock Analysis Report
PUBLIC SV ENTRP (PEG): Free Stock Analysis Report
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