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What's in the Cards for NRG Energy (NRG) in Q2 Earnings?

Zacks Equity Research

NRG Energy, Inc. NRG is scheduled to report second-quarter 2019 results on Aug 7, before market open. In the last reported quarter, the company recorded negative earnings surprise of 12.82%

Let’s see how things are shaping up for this earnings season.

Factors to Consider

NRG Energy is on track with its transformation plan, which is expected to drive results in the quarter to be reported. The company has been focused onmargin-enhancement initiatives throughout 2019.The company has completed the first half of its $1-billion 2019 share buyback program. We expect decline in outstanding shares to make a positive impact on second-quarter results.

The company is also striving to reduce its long-term debts, which will strengthen balance sheet and lower its interest expenses. These initiatives are expected to drive margins and profitability in the quarter to be reported.

Q2 Estimates

The Zacks Consensus Estimate for second-quarter earnings is pegged at 78 cents, which indicates a decline of 42.64% in the past 60 days.

NRG Energy, Inc. Price and EPS Surprise

 

NRG Energy, Inc. Price and EPS Surprise

NRG Energy, Inc. price-eps-surprise | NRG Energy, Inc. Quote

 

Earnings Whisper

Our proven model does not show that NRG Energy will beat estimates in the quarter to be reported. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: The company’s Earnings ESP is -21.49%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: NRG Energy has a Zacks Rank #5 (Strong Sell).

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

Stocks to Consider

Investors can consider stocks from the same industry, which have the right combination of elements to beat estimates in the to-be-reported quarter.

Pinnacle West Capital Corporation PNW has an Earnings ESP of +0.06% and a Zacks Rank #3. The company is expected to release second-quarter 2019 results on Aug 8.

Black Hills Corporation BKH has an Earnings ESP of +0.75% and a Zacks Rank #3. The company is scheduled to report second-quarter 2019 results on Aug 5.

The Southern Company SO has an Earnings ESP of +0.46% and a Zacks Rank #3. The company is expected to release second-quarter 2019 results on Jul 31.

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