QUOTE AND NEWS
Benzinga  Dec 12  Comment 
Below are the diversified utilities stocks on the NYSE and the NASDAQ in terms of revenue. The trailing-twelve-month revenue at Exelon (NYSE: EXC) is $26.34 billion. Exelon's profit margin for the same period is 7.97%. The...
Benzinga  Dec 10  Comment 
NRG Energy (NYSE: NRG) shares jumped 12.39% to $31.29 in pre-market trading. On Tuesday, NRG Energy announced a $100 million stock buyback program. American Airlines Group (NASDAQ: AAL) shares gained 1.76% to $49.16 in the pre-market trading...
MarketWatch  Dec 9  Comment 
NRG Energy Inc. said on Tuesday it has launched a $100 million stock repurchase program. The electricity producer said the repurchases will be made with available cash, and with no defined time frame. "We have a lot of exciting opportunities to...
Forbes  Dec 3  Comment 
In afternoon trading on Wednesday, Utilities stocks are the worst performing sector, showing a 0.3% loss. Within that group, NRG Energy (NYSE: NRG) and Exelon (NYSE: EXC) are two large stocks that are lagging, showing a loss of 6.2% and 2.1%,...
Jutia Group  Dec 2  Comment 
[Business Wire] - The Coca-Cola Company has partnered with NRG eVgo, a subsidiary of NRG Energy, Inc., to join Governor Jerry Brown’s call to have 1.5 million zero-emission vehicles on California’s roads by 2025. Read more on this. The...
New York Times  Nov 20  Comment 
The company, which operates coal and other conventional power plants, plans for a reduction of 50 percent by 2030 and 90 percent by 2050.
newratings.com  Nov 13  Comment 
WASHINGTON (dpa-AFX) - NRG Energy Inc. (NRG) said it has appointed Steve McBee as the first-ever President and CEO of NRG Home, effective December 1, 2014. David Crane, President and CEO of NRG Energy said, "Steve McBee has a proven ability to...
TheStreet.com  Nov 7  Comment 
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.  TheStreet Ratings quantitative algorithm...
TheStreet.com  Nov 7  Comment 
NEW YORK (TheStreet) -- RATINGS CHANGES AbbVie was downgraded at BMO to market perform from outperform ABBV downgraded to Market Perform from Outperform, said BMO. Stock price reflects high expectations on Hep-C opportunity. HollyFrontier ...




 

NRG Energy (NYSE: NRG) is an independent power producer with generation operations in three countries. The company engages in the ownership, development, construction and operation of power generation facilities; the trading fuel and transportation services; trading of energy related products; and the supply of electricity to retail electricity customers in deregulated markets through its retail subsidiaries Reliant Energy and Green Mountain Energy. A majority of the company's revenues come from North America. As an energy producer, the company's earnings are susceptible to commodity prices and electricity demand.


Business Growth

The company earned $477 million on 2010 revenues of $8.84 billion, compared to $942 million on 2009 revenues of $8.95 billion. Contributing factors to the decline in net income are the sustained drop in natural gas prices and overall electricity demand. Also as a result of low gas prices, some of NRG's hedging positions that have hurt margins. NRG has acquired several companies in the renewable energy industry, which have the potential providing sources of future growth and of diversifying operations away from natural gas dependence.

Trends and Forces

Operations Are Tied Directly to Fuel Prices

NRG Energy's operations benefit from low, stable fuel prices (coal, oil, natural gas, nuclear fuel).[1] Because NRG's power station portfolio possess a fleet of diverse fuel sources,[2] price fluctuations in one of any of the above fuels affects NRG operating costs. Some specific trends to track include rising coal prices,[3] and rising oil prices.

To offset volatile natural gas prices and declines in electricity demand, NRG has several hedge positions on commodity prices.[4] When commodity prices fell rapidly in 2008, NRG reported record earnings partially as a result of their hedges.[5] However, these hedges have the potential of straining cash flows when commodity prices remain stable at historical lows.[6]

Additionally, NRG has acquired several renewable energy companies.[7] By diversify its operations, NRG's revenues become less dependent on commodity prices.[8]

Governmental Regulation Incurs Costs and Affects Revenue

Base rates on long-term electricity sales contracts directly impact NRG Energy's revenue.[9] The company's ability to maximize sale prices on contracts especially in California, Texas, and New England depends on local government demand and negotiation for the company's electricity.[10] NRG's competitiveness in these areas of high population density rests in its ability to sustain efficient, consistent operations relative to other area electric utilities.[11]

Additionally, environmental restrictions affect several aspects of NRG's (and the rest of the industry's) operations.[12] Regulation on coal, oil, and natural gas production and sales raises fuel prices.[13]Carbon emission regulation raises NRG's operating costs by forcing expenditures to clean up fossil fuel emissions from coal and oil-based power stations.[14]

Competition

Since NRG is a utility, the company has little competition. Utilities are typically monopolies that are regulated to ensure they are charging fair prices. Income comes from the utility company's contractual sales agreements with local and state governments. NRG competes with the following companies for contracts:



References

  1. 2007 10K, NRG Energy, Part 1, Item 2
  2. 2007 10K, NRG Energy, Part 1, Item 1A
  3. Coal prices seen rising 3 fold, to hit record; Reuters Business News
  4. Foxbusiness.com: S&P Lowers NRG Energy Outlook On Hedges, Low Prices
  5. Foxbusiness.com: S&P Lowers NRG Energy Outlook On Hedges, Low Prices
  6. Foxbusiness.com: S&P Lowers NRG Energy Outlook On Hedges, Low Prices
  7. renewableenergyworld.com: NRG Energy To Develop 500 MW of Solar Thermal
  8. renewableenergyworld.com: NRG Energy To Develop 500 MW of Solar Thermal
  9. NRG 10K SEC Filings 2010
  10. NRG 10K SEC Filings 2010
  11. NRG 10K SEC Filings 2010
  12. Seekingalpha.com:NRG Energy Testifies Before the Senate Committee on Energy and Natural Resources on Reducing Oil Consumption through Electric Vehicle Adoption
  13. Seekingalpha.com:NRG Energy Testifies Before the Senate Committee on Energy and Natural Resources on Reducing Oil Consumption through Electric Vehicle Adoption
  14. Seekingalpha.com:NRG Energy Testifies Before the Senate Committee on Energy and Natural Resources on Reducing Oil Consumption through Electric Vehicle Adoption
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