NRG Energy Posts Profit In Q3; Lowers Top End Of 2013 Adj. EBITDA Outlook Range

(RTTNews) - Electric utility NRG Energy, Inc. (NRG) on Tuesday reported a turnaround to profit in the third quarter on strong revenue growth, helped by the company's acquisition of GenOn Energy Inc. The latest quarter's results also reflect narrower hedging losses compared to the prior-year period.

Looking ahead to fiscal 2013, the company lowered the top end of its guidance range for adjusted earnings before interest, tax, depreciation and amortization, or EBITDA, and also lowered its outlook for fiscal 2014 adjusted EBITDA.

David Crane, president and chief executive officer of NRG said, "NRG has been intensely focused on delivering exceptional performance during the critical third quarter and I am pleased to report that our hard work produced satisfactory financial results notwithstanding the moderate summer weather, which led to little scarcity pricing and a weakened forward price curve."

Crane added, "We also were able during the quarter to build our strategic platform with the GenOn integration and the Gregory acquisition, the successful IPO of NRG Yield, and through the purchase of demand-side firm Energy Curtailment Specialists."

NRG Energy's net income available to common stockholders for the third quarter was $122 million or $0.37 per share, compared to net loss of $3 million or $0.01 per share in the year-ago period.

The latest quarter's results include market-to-market losses on economic hedges of $53 million, while the prior-year quarter's results include loss on debt extinguishment of $41 million and market-to-market losses on economic hedges of $259 million.

On average, four analysts polled by Thomson Reuters expected the company to report earnings of $0.83 per share for the quarter. Analysts' estimates typically exclude one-time items.

The company recorded adjusted EBITDA of $1.00 billion for the latest quarter, with Wholesale contributing $741 million, Retail contributing $176 million and NRG Yield contributing $83 million. This compared to adjusted EBITA of $678 million in the same period last year.

Total operating revenues for the quarter grew 50 percent to $3.49 billion from $2.33 billion in the year-ago period. Analysts had a consensus revenue estimate of $3.08 billion for the quarter.

Total operating costs and expenses increased 32 percent to $2.96 billion from $2.25 billion in the prior-year period.

Looking ahead to fiscal 2013, NRG Energy now forecasts adjusted EBITDA in a range of $2.55 billion to $2.60 billion, compared to the prior range of $2.55 billion to $2.70 billion.

In addition, NRG Energy lowered its outlook for 2014 adjusted EBITDA to a range of $2.70 billion to $2.90 billion, from the prior range of $2.85 billion to $3.05 billion. The company said that the reduction in its outlook for 2014 was primarily due to the decline in forward curves across all of its core Wholesale regions over the past few months due to the lack of scarcity pricing during the summer of 2013.

NRG closed Monday's regular trading at $28.04, down $0.28 on the NYSE.