NRG Energy Inc. (NYSE:NRG) will release second-quarter 2016 financial results before market open on Aug 9. Last quarter, this integrated power company came out with a positive earnings surprise of 241.2%. Let’s see how things are shaping up at the company prior to this announcement.
Factors to Consider
NRG Energy continues with its deleveraging program and has retired $229 million of corporate debt through May 4, 2016, leading to annualized cash interest savings of $16 million. We expect NRG Energy to continue with its debt reduction initiative this year to further strengthen its balance sheet.
NRG has a diverse portfolio spread over the East, Gulf and West. Warmer-than-expected temperatures that prevailed in the U.S. during the second quarter are expected to boost electric sales.
Earnings Whispers
Our proven model does not conclusively show that NRG Energy is likely to beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. But, that is not the case here as you will see below.
Zacks ESP: The Most Accurate estimate is pegged at 2 cents compared with a breakeven Zacks Consensus Estimate, resulting in an Earnings ESP of 0.00%.
Zacks Rank: Though NRG Energy’s Zacks Rank #3 increases the predictive power of the ESP, its 0.00% ESP makes a beat uncertain this quarter.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Other Utility Releases
American Electric Power Co., Inc. (NYSE:AEP) reported second-quarter 2016 operating earnings of 95 cents per share, beating the Zacks Consensus Estimate of 90 cents by 5.6%.
NextEra Energy, Inc. (NYSE:NEE) reported second-quarter 2016 adjusted earnings of $1.67 per share, outpacing the Zacks Consensus Estimate of $1.58 by 5.7%.
Duke Energy Corporation (NYSE:DUK) reported second-quarter 2016 adjusted earnings of $1.07 per share that came in above the Zacks Consensus Estimate of $1.01 by 5.9%
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