NRG Energy Inc.
) announced its preliminary Earnings before Interest, Tax,
Depreciation and Amortization ("EBITDA") and Free Cash Flow
before Growth Investments outlook following the closure of its
GenOn acquisition on Dec 14, 2012.
For 2013, NRG Energy maintained its EBITDA guidance in the
range of $2,535 million to $2,735 million of which wholesale is
expected to bring in around $1,685 million to $1,800 million
while retail's contribution is estimated to be in the band $650
million to $725 million. NRG Energy anticipates lucrative returns
from its various solar programs and expects the EBITDA
contribution to be between $200 million and $210 million.
For 2014, NRG Energy estimates EBITDA in the range $2,700
million to $2,900 million. Wholesale is anticipated to fetch
around $1,705 million to $1,820 million. The retail business is
expected to pitch in about $675 million to $750 million while
solar programs offerings are expected in the range of $320
million to $330 million.
The company's Free Cash Flow before growth investments is
anticipated in the range of $900 million to $1,100 million both
in 2013 and 2014.
The revision in guidance includes an updated outlook on the
company's hedging position, expenditures of the joint portfolio
post GenOn merger and an estimated decline in environmental
costs. We note that the prior guidance was made on a standalone
basis during the announcement of the GenOn merger deal in Jul
So the new guidance reflects the benefit the company will
accrue from the merger in terms of estimated increase in EBITDA
in 2014 as well as rise in Free Cash Flow before Growth
Investments in 2013 and 2014.
The GenOn purchase boosted the company's total generation
portfolio to roughly 47,000 megawatts. We believe the
commencement of the Tucson Solar Unit would offer a major thrust
to the company's renewable program especially in the long term
given the U.S. government's decision to step up green energy
production in the power sector.
Natural gas prices are also projected to kick back and move
upwards in the near term which will substantially benefit NRG
Energy's fossil fuel business. Moreover, the coal market is
likely to make a positive comeback and will maintain the momentum
till 2017. This will further act as a potential growth catalyst
for NRG Energy. Currently, NRG Energy retains a Zacks Rank #2
Other companies in the energy sector who have recently
unveiled operational and financial outlooks are
Peabody Energy Corp.
CONSOL Energy Inc.
Stone Energy Corp.
Anadarko Petroleum Corporation
). The former two companies expect a soft start to 2013 with both
providing unfavorable production outlook owing to idling of coal
mines. The latter two however, are expected to ride high on their
exploration and production programs.
Headquartered in Princeton, New Jersey, NRG Energy along with
its subsidiaries operates as an integrated wholesale power
generation and retail electricity company.
ANADARKO PETROL (APC): Free Stock Analysis
PEABODY ENERGY (BTU): Free Stock Analysis
CONSOL ENERGY (CNX): Free Stock Analysis
NRG ENERGY INC (NRG): Free Stock Analysis
STONE ENERGY CP (SGY): Free Stock Analysis
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