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.

Bed Bath & Beyond, Inc. (NASDAQ: BBBY): Q3 Earnings Preview

Bed Bath & Beyond, Inc. (NASDAQ: BBBY) is scheduled to release its third-quarter earnings after the closing bell on Wednesday, December 22, 2010. Analysts, on average, expect the company to report earnings of 65 cents per share on revenue of $2.11 billion. In the year ago period, the company reported earnings of 58 cents per share on revenue of $1.98 billion.

Bed Bath & Beyond Inc., together with its subsidiaries, operates a chain of retail stores. As of August 28, 2010, the Company had a total of 1,111 stores, including 972 Bed Bath & Beyond stores in 50 states, the District of Columbia, Puerto Rico and Canada, 61 Christmas Tree Shops stores, 33 buybuy BABY stores and 45 stores under the names of Harmon or Harmon Face Values. During the fiscal second quarter, the Company opened five Bed Bath & Beyond stores, including the first store in its 50th state, Hawaii, and two buybuy BABY stores. Consolidated store space as of August 28, 2010 was approximately 34.1 million square feet.  In addition, the Company is a partner in a joint venture, which operates two stores in the Mexico City market under the name Home & More.

In the preceding fiscal second-quarter, the New Jersey-based company's net income was $181.6 million, or 70 cents a share, compared to $135.5 million, or 52 cents a share, in the prior-year quarter. Revenue grew to $2.14 billion from $1.91 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of 63 cents per share on revenue of $2.10 billion. 

At its last earnings call in September, the company raised its fiscal 2010 earnings guidance. The company said that it now expects net earnings per share to increase by about 20%, which implies earnings of $2.76 per share. Previously, the company anticipated earnings to grow by about 15%. The company expects the total number of new stores openings across all of its concepts to be in the mid-to-high 40s range in fiscal 2010. Further, it expects to continue its program of expanding, renovating, remodeling and/or relocating a number of its stores in fiscal 2010.

The company anticipates fiscal third quarter net income to be in the range of approximately 61 cents to 65 cents per share.

Bed Bath represents a strong brand with solid growth opportunities. A brisk expansion strategy, debt-free balance sheet and strong cash position augur well for the company’s future operating performance. However, intense competition from department stores, specialty stores and mass merchandisers will likely  to continue hurt BBBY’s growth.

In terms of stock performance, BBBY shares have gained nearly 24% since the beginning of the year. 

Full Disclosure: None.

Red Hat, Inc. (NYSE: RHT): Q3 Earnings Preview

Red Hat, Inc. (NYSE: RHT) is scheduled to release its third-quarter financial results after the market close on Tuesday, December 21, 2010. Analysts, on average, expect the company to report earnings of 20 cents per share on revenue of $227.27 million. In the year ago quarter, the company reported earnings of 17 cents per share on revenue of $194.35 million.

Red Hat, Inc., together with its subsidiaries, provides open source software solutions to enterprises worldwide. The Company employs an open source software development and licensing model that uses the collaborative input of an international community of contributors to develop and enhance software.

In the precedent fiscal second-quarter, the Raleigh, North Carolina based company's net income was $23.7 million, or 12 cents a share, compared to $28.9 million, or 15 cents a share, in the year-earlier quarter. On an adjusted basis, the company earned 19 cents per share in the latest quarter.  Revenue rose 20% to $219.8 million from $183.63 million. Analysts, on average, expected the company to report earnings of 14 cents per share on revenue of $211.49 million.

At its last earnings call in September, the company raised its revenue guidance for the full year from $835 million to $850 million to a tighter range of $877 million to $885 million. The company expects to grow non-GAAP operating income by 22% to 24% year-over-year, while continuing to invest in growth initiatives. The company expects non-GAAP EPS to be in the range of 76 cents to 77 cents per share. The company continues to expect operating cash flow for the full year between $280.0 million and $290.0 million.

For the third quarter, revenue is estimated to be approximately $226 million to $228 million. Operating margin is estimated to be between 24.5% to 25% and non-GAAP EPS for the third quarter is estimated to be $0.19 to $0.20 assuming the same 35% tax rate.

Red Hat remains focused on managing discretionary costs effectively while increasing investments simultaneously in growth areas such as middleware, virtualization and cloud computing. 

During the quarter in review, Red Hat acquired Makara, a developer of deployment and management solutions for applications in the cloud. Makara's technologies will accelerate the development of Red Hat's comprehensive Platform-as-a-Service (PaaS) solution as part of its Cloud Foundations portfolio.

Among other development, Red Hat announced a partnership with Eucalyptus Systems, creators of the Eucalyptus private cloud platform, to offer cross-cloud compatibility and expanded platform choice in the cloud. The two companies are working together to provide Eucalyptus support for Red Hat Enterprise Virtualization and Eucalyptus compatibility with the Apache Deltacloud application programming interface (API).

In terms of stock performance, Red Hat shares have gained nearly 55% since the beginning of the year. 

Full Disclosure: None.