NRG Energy posts Q3 core profit beat, raises annual forecast

NRG Energy beat third-quarter core profit estimates on Friday due to lower supply costs across its service territories, and raised its 2024 profit outlook, sending its shares up over 3% before the bell.

U.S. natural gas prices fell in the quarter compared to the previous year, making it cheaper to supply the fuel across NRG's service territory.

The utility, however, reported a loss of $767 million in the third quarter, compared with a year-ago profit of $343 million due to setbacks on its economic hedges. NRG said declining ERCOT forward power prices in Texas led to a hit of $1.63 billion on net profit.

Hedging can help companies reduce risk and protect energy traders from unexpected or adverse price fluctuations.

The Houston, Texas-based utility said it now expects the 2024 adjusted profit forecast to be between $5.95 and $6.75 per share, from a prior outlook of $5.00-$6.30 per share.

In 2025, the company expects annual adjusted profit of $6.75-$7.75 per share, the midpoint of which is higher than analysts' expectations of $6.80 per share, according to data compiled by LSEG.

NRG Energy reported adjusted earnings before interest, taxes, depreciation and amortization of $1.06 billion for the three months ended Sept. 30, compared with expectations of $997.9 million.

However, adjusted earnings per share of $1.90 missed analysts' estimates of $2 per share.