By Hannah Levitt
NRG Energy Inc. stock remained stable Tuesday although the company missed analysts’ expectations for the fourth quarter of 2016.
The Princeton, N.J.- and Houston, Texas-based utility reported a net loss of $1.1 billion, or $3.33 per diluted share, for the three months ended Dec. 31. This is 83 percent narrower than its loss of $6.4 billion, or $19.63 per diluted share, in the same period in 2015. Analysts expected a loss of 46 cents, according to Bloomberg.
“We are in a much better position today to benefit from market opportunities than we were one year ago,” NRG President and CEO Mauricio Gutierrez said on a conference call. He cited weak commodity markets as a continuing challenge for NRG.
Morningstar analyst Travis Miller said in an interview that NRG performed well in the fourth quarter despite market conditions.
“What we saw in the fourth quarter was a continuation of the theme we’ve seen throughout the year, and that is good cost controls and optimizing the portfolio of businesses that they have,” Miller said.
Miller pointed to the company’s Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and cash flow as indications of cost control and portfolio optimization.
NRG reported an Adjusted EBITDA of $492 million for the fourth quarter, slightly lower than $582 million in 2015 due to lower realized energy margins, lower capacity prices and increased spending on customer growth initiatives, according to its press release.
Cash flow improved due to debt reduction, preferred stock redemption and extension of maturities at lower interest rates, stated the release.
“Just one year ago I made a commitment to simplify our business, to strengthen our platform, and restore confidence in our direction and decision-making,” Gutierrez said. “Today, NRG is in a much better place to continue executing on our multi-year strategic plan to solidify our position as a premier integrated power company.”
NRG reported a net loss of $891 million, or $2.22 per share, for the full year 2016, 86 percent narrower than its loss of $6.4 billion, or $19.46 per share, in 2015.
The stock closed at $16.56, down 21 cents or 1.3 percent.