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NRG Energy (NRG) Q1 Earnings Impress Yet Revenues Weak

NRG Energy, Inc. NRG reported earnings of 24 cents in the first quarter of 2016, while the Zacks Consensus Estimate was a loss of 17 cents, resulting in a positive surprise of 241.2%. The company reported a loss of 37 cents in the year-ago quarter.

Revenues

NRG Energy's operating revenues of $3,229 million in the first quarter of 2016 lagged the Zacks Consensus Estimate of $3,580 million by 9.8% and decreased 15.7% from $3,829 million in the first quarter of 2015.

Highlights of the Release

Total operating costs and expenses in the first quarter of 2016 decreased to $2,785 million from $3,767 million a year ago.

The company’s operating income was $476 million in the first quarter of 2016, up sharply from $76 million in the year-ago quarter.

The company incurred $284 million of interest expenses compared with $301 million a year ago.

Financial Condition

As of Mar 31, 2016, NRG Energy had cash and cash equivalents of $1,659 million compared with $1,518 million as of Dec 31, 2015. The company’s long-term debt and capital leases (excluding current portion) were $18,677 million as of Mar 31, 2016, compared with $18,983 million as of Dec 31, 2015.

Total liquidity was $3,383 million as of Mar 31, 2016, compared with $3,305 million as of Dec 31, 2015.

In first-quarter 2016, NRG Energy’s net cash from operating activities was $554 million, up from $260 million in the prior-year quarter.

Capital expenditure during the first quarter of 2016 was $279 million, up 10.7% from $252 million in first-quarter 2015.

NRG Energy's free cash flow before growth investments in first-quarter 2016 was $249 million, down from $364 million in the year-ago period.

Guidance

For 2016, NRG Energy reiterated its adjusted EBITDA and free cash flow (before growth investments) guidance in the range of $3,000–$3,200 million and $1,000–$1,200 million, respectively.

Other Peer Releases

American Electric Power Co., Inc. AEP reported first-quarter 2016 operating earnings of $1.02 per share, missing the Zacks Consensus Estimate of $1.06 by 3.8%.

Dominion Resources Inc. D reported first-quarter 2016 operating earnings of 96 cents per share, in line with the Zacks Consensus Estimate.

DTE Energy Company DTE reported first-quarter 2016 operating earnings per share of $1.52, in line with the Zacks Consensus Estimate

Zacks Rank

NRG Energy currently has a Zacks Rank #3 (Hold).

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