Thursday, power generation company NRG Energy, Inc. (NRG) reported a sharp decline in third quarter profit from a year ago, despite an increase in revenues, reflecting higher operating costs. The company said it intends to complete the remaining $250 million of repurchases during the fourth quarter.
The Princeton, New Jersey-based company's third-quarter income available for NRG Energy common stockholders plunged to $272 million or $1.02 per share from $765 million or $2.81 per share in the year ago quarter. Ten analysts polled by Thomson Reuters expected the company to report earnings of $1.14 per share for the quarter. Analysts' estimates typically exclude special items.
NRG said its current quarter benefited from Reliant Energy's results which contributed $393 million in pre-tax income, while the year ago quarter results benefited from $824 million of pre-tax net mark-to-market gains on asset-backed hedges.
Total operating revenues rose to $2.916 billion for the quarter from $2.612 billion in the prior year period. Five analysts had consensus revenue estimate of $ 2.18 billion for the quarter.
Total generation declined 8% in the quarter, compared to 2008, which included a 13% decline in baseload generation.
The company noted that maintenance and unplanned outages during the quarter, primarily in Texas, contributed to the lower generation and impacted the quarter's results.
Commenting on the results, David Crane, NRG president and chief executive officer said, " "NRG's record financial performance has been achieved in the most challenging commodity price and economic environment NRG has ever experienced."
Operating expenses for the quarter rose to $2.305 billion from $1.241 billion a year ago.
Year-to-date, the company reported net income attributable to common stockholders of $882 million or $3.58 per share, down from $913 million or $3.87 per share in the corresponding period last year. Total operating revenues advanced to $6.811 billion from $5.23 billion a year ago.
Additionally, the company said it intends to complete the remaining $250 million of share repurchases during the fourth quarter of 2009. During the third quarter of 2009, the company purchased 8,919,100 of its common shares at a volume weighted average cost of $28.01 per share, for a total of $250 million.
Looking ahead, for full year 2009, the company expects adjusted EBITDA of $2.575 billion, a $75 million increase from the prior guidance.
For fiscal 2010, NRG anticipates adjusted EBITDA of $2.200 billion. The company added that Reliant Energy's outlook for 2010 will be lower than 2009 results due to lower margins as a result of the two price reductions that occurred in the summer of 2009, increased supply costs as gas prices are expected to be higher in 2010 versus 2009, and normalized weather conditions.
NRG is trading at $24.43, down $0.38 or 1.53%, on a volume of about 5.51 million shares.
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