Wednesday, February 16, 2011

NRG Energy Inc. (NYSE: NRG): Q4 Earnings Preview 2010

NRG Energy Inc. (NYSE: NRG) is scheduled to release fourth-quarter earnings before the market open on Tuesday, February 22, 2011. Analysts, on average, expect the company to report earnings of 40 cents per share on revenue of $2.93 billion. In the year-ago period, the company reported earnings of 11 cents per share on revenue of $2.14 billion.

NRG Energy owns and operates one of USA’s largest and most diverse power generation portfolios. The company's power plants provide 25,000 megawatts of generation capacity--enough to supply approximately 20 million homes. NRG's retail businesses, Reliant Energy and Green Mountain Energy Company, combined serve more than 1.8 million residential, business, commercial and industrial customers. 

In the preceding third quarter, the Princeton, New Jersey-based company's net income was $221 million, or 87 cents per share, compared with a profit of $272 million, or $1.02 per share, in the year-earlier quarter. Operating revenues decreased to $2.685 billion from $2.916 billion. Analysts, on average, expected the company to report earnings of 89 cents per share on revenue of $2.97 billion.  

At its last earnings call in November, NRG Energy lifted its full-year 2010 EBITDA guidance to a range of $2.50 billion a $2.55 billion, compared with its prior forecast range of $2.45 billion to $2.55 billion.

Late in November, the company reduced its fiscal 2011 EBITDA outlook. NRG Energy Inc. said that it expects 2011 adjusted EBITDA in a range of $1.75 billion to $1.95 billion. Free cash flow before growth investments is expected to be $825 million to $1.025 billion. The company said that it amended its 2011 guidance to adjust for exclusion of 3,884 megawatts of gas assets in California and Maine as a result of Dynegy's shareholder vote against Blackstone Group L.P.'s buyout offer and termination of the operative  acquisition deals. The company guided down its free cash flow before growth investments for 2011 to a range of $825 to $1,025 million from a band of $950 million to $1,150 million. The free cash expectation for 2011 was lowered to the range of $425 million to $625 million from the previous range of $550 million to $750 million.

Large power producers like NRG Energy have been spending consistently over the past decades to keep up with environmental reforms. The company has initiated a wide range of investments in emerging technologies in solar, wind and nuclear power. In November, NRG Energy Inc. said that it's teaming up with Walgreens (NYSE: WAG) to offer electric vehicle charging stations at 10 Walgreens stores in Houston, as a centerpiece of a $10 million investment by NRG. NRG is billing the effort as the U.S.'s first privately funded, comprehensive electric vehicle infrastructure. 

In December, NRG Energy agreed to acquire the 290-megawatt (MW) Agua Caliente solar project from First Solar. The project is scheduled to be completed by 2014 and has a 25-year power purchase agreement with Pacific Gas and Electric Company. When completed, Agua Caliente is expected to be the largest operational photovoltaic (PV) site in the world. In Janaury, NRG Energy Inc., General Electric Co. (NYSE: GE), and ConocoPhillips (NYSE: COP) announced a joint venture with a committed capital of $300 million that will invest in and collaborate to promote emerging energy technology. The new entity, to be called Energy Technology Ventures, will operate primarily in the United States, Europe and Israel. The joint venture is expected to financially support up to 30 venture- and growth-stage companies over the next four years, with a focus on technologies relating to innovative energy production as also cleaner and more efficient usage of current energy sources.

Full Disclosure: None.
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