Dive Brief:
- NRG Energy Inc. third quarter 2014 profit was $168 million, and $0.48 per share, up 41% from Q3 2013’s profit of $119 million, and $0.36 per share. Q3 2014 net income was $168 million, a gain from Q3 2013’s net income of $119 million.
- The Q3 2014 Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), a performance measure, was $1.014 billion, up from Q3 2013’s $1 billion, according to MarketWatch. The full year 2014 EBITDA was reduced from between $3.2 billion and $3.4 billion to between $3.1 billion and $3.2 billion. The full year 2014 free cash flow (FCF) before growth investments was reduced from between $1.2 billion and $1.4 billion to between $950 million and $1.050 billion.
- Expenses increased 36% to $4.02 billion while revenue increased only 31% to $4.57 billion, below analysts’ $3.46 billion revenue expectation.
Dive Insight:
NRG Energy, one of the biggest U.S. electricity producers, recently reorganized into three high growth business divisions, NRG Business, NRG Home, and NRG Renew, as it moved toward renewables and away from the volatility of the wholesale electricity market.
The reductions in forecasted performance measures were attributed to lower power prices and sales driven by mild weather, winter fuel inventory investments, interest on debt incurred in the $870 million purchase of the 947 megawatt Alta Wind project and other expenditures, and a $50 million loss in the NRG Home Solar division.
“While NRG's financial performance was constrained in the third quarter by an absence of summer weather events, NRG's underlying performance across our wholesale and retail operations was quite strong,” President/CEO David Crane said, according to MarketWatch.
Besides its Q3 purchase of Alta Wind, North America’s biggest wind facility, NRG also acquired Edison International coal plants, wind farms and other assets out of bankruptcy for $2.65 billion.
