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What to Expect from NRG Energy (NRG) in Q3 Earnings?

NRG Energy, Inc. NRG will report third-quarter 2017 results before the market opens on Nov 2. Last quarter, this company delivered a positive surprise of 820%. Let’s see how things are shaping up for this earnings season.

Factors to Consider

NRG Energy announced its ambitious transformation plan in July which is aimed to save more than $1 billion through recurring cost cuts and margin improvements. With this plan, the company aimed to divest its assets in the range of $2.5–$4 billion to strengthen its balance sheet by repayment of a debt of $13 billion.

The company expects to continue with its cost-saving initiatives throughout 2017. NRG Energy expects to save $590 million in 2017 through its initiatives and we expect the benefits from this initiative will be felt in third quarter.

The Zacks Consensus Estimate for current quarter revenue is currently pegged at $2,937 million reflecting 8.7% sequential increase. Additionally the Zacks Consensus Estimate for current quarter earnings is pegged at 85 cents, reflecting a sequential rise of 136.1%.

Earnings Whisper

Our proven model does not conclusively show that NRG Energy is going to beat estimates this season. This is because it does not have the right combination of two key ingredients. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks ESP: The company’s Earnings ESP is 0.00%. This is because Most Accurate Estimate and the Zacks Consensus Estimate are both pegged at 92 cents.

Zacks Rank: NRG Energy currently carries a Zacks Rank #3. The combination of the company’s favorable Zacks Rank and 0.00% ESP lowers the possibility of earnings beat this season.

Conversely, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

NRG Energy, Inc. Price and EPS Surprise

Stocks to Consider

NRG Energy is not the only company in the space looking up this earnings season. We can expect earnings beats from these companies as well.

Fortis Inc. FTS has an Earnings ESP of +3.60%. It carries Zacks Rank #3 and is expected to report third-quarter 2017 earnings on Nov 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Exelon Corporation EXC has an Earnings ESP of +0.48%. It carries Zacks Rank #3and is expected to report third-quarter 2017 earnings on Nov 2.

American States Water Company AWR has an Earnings ESP of +0.29%. It carries Zacks Rank #2 and is expected to report third-quarter 2017 earnings on Nov 6.

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Exelon Corporation (EXC): Free Stock Analysis Report
 
NRG Energy, Inc. (NRG): Free Stock Analysis Report
 
Fortis Inc. (FTS): Free Stock Analysis Report
 
American States Water Company (AWR): Free Stock Analysis Report
 
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