NRG

A month has gone by since the last earnings report for NRG Energy (NRG). Shares have lost about 8% in that time frame, underperforming the S&P 500. Will the recent negative trend continue leading up to its next earnings release, or is NRG due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts. NRG Energy Q2 Earnings Lag Estimates, Revenues Increase Y/YNRG Energy, Inc. reported second-quarter 2026 adjusted earnings of $1.49 per share, which missed the Zacks Consensus Estimate of $1.66 by 10.2%. The bottom line also declined 11.3% from $1.68 in the year-ago quarter. Total revenues were $7.48 billion, which beat the Zacks Consensus Estimate of $5.89 billion by 27%. The top line also increased 11% from the prior-year quarter’s level of $6.74 billion. The company recorded adjusted EBITDA of $1.22 billion in the second quarter, up 33.9% from $0.91 billion registered a year ago.Total operating costs and expenses were $6.54 billion, down 2.9% from $6.74 billion in the year-ago quarter.Operating income in the second quarter totaled $976 million.Through July 31, 2026, NRG completed $932 million in share repurchases and distributed $202 million in common stock dividends. In 2026, the company plans to return $1 billion through share repurchases and common stock dividends of around $407 million. NRG advanced its Bring Your Own Power strategy with a global cloud and artificial intelligence hyperscaler. The parties are aligned on principal commercial terms for developing a 1.2-gigawatt combined-cycle natural gas generation facility in Texas, subject to final documentation and approvals.The company also achieved commercial operations at the 415-megawatt T.H. Wharton facility. Its two other Texas Energy Fund projects remained on schedule and within budget. As of June 30, 2026, NRG had cash and cash equivalents worth $0.16 billion compared with $4.71 billion as of Dec. 31, 2025.As of June 30, 2026, long-term debt and finance leases amounted to $21.74 billion compared with $16.41 billion as of Dec. 31, 2025.Cash provided by operating activities totaled $0.95 billion in the first six months of 2026, compared with $1.31 billion in the same period of 2025.Capital expenditures amounted to $655 million in the first six months of 2026, compared with $595 million in the same period of 2025.Total liquidity was $5.28 billion, down from $9.63 billion, primarily due to funding the acquisition of generation assets and CPower from LS Power. NRG Energy expects its 2026 adjusted net income to be in the range of $1.685-$2.115 billion.The company expects its 2026 adjusted EPS to be in the range of $7.90-$9.90. The Zacks Consensus Estimate stands at $8.60, slightly below the midpoint of the company’s guidance range.Free Cash Flow before Growth for 2026 is anticipated to be in the range of $2.8-$3.3 billion.NRG expects 2026 adjusted EBITDA in the band of $5.325-$5.825 billion. It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -6.16% due to these changes. At this time, NRG has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a score of B on the value side, putting it in the top 40% for this investment strategy. Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, NRG has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NRG Energy, Inc. (NRG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Make better investment decisions with Simply Wall St's easy, visual tools that give you a competitive edge. NRG Energy stock has more than tripled over the past three years, yet the current checks suggest it is no longer a clear bargain and now looks closer to fairly priced on market multiples. NRG Energy has delivered a 214.2% return over three years, which puts extra focus on whether today’s price still offers an attractive entry point. Growth tied to the LS Power assets and the Vivint Smart Home segment can support earnings expectations, while execution risks around the large Texas data center generation project may weigh on how much investors are willing to pay for the stock. The company scores just 2 out of 6 on our valuation checks. This leans more toward expensive than clearly undervalued on the broader set of metrics. For investors, the debate is whether NRG Energy’s recent pullback has reset the price enough after such a strong three year run, or if the stock is still pricing in much of the good news already. Find out why NRG Energy's -21.8% return over the last year is lagging behind its peers. The P/E multiple is a useful way to look at NRG Energy because earnings remain a key focus for this type of utility and energy services business. NRG Energy currently trades on a P/E of about 30.0x, which is higher than the electric utilities industry average of 20.3x and also above the peer group average of 18.0x. The company’s model based fair P/E ratio is 29.5x, which is very close to where NRG Energy trades today. Despite the recent positive attention around LS Power, Vivint Smart Home and the Texas data center project, the current valuation already aligns closely with what this framework suggests investors might pay given its profile. On this P/E view the stock does not screen as a clear bargain or as especially expensive relative to its own fundamentals. Overall, NRG Energy looks priced roughly in line with what the tailored P/E multiple suggests is fair right now. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for NRG Energy pick up where the valuation puzzle leaves off and explain which assumptions on growth, margins and earnings would need to hold for the stock to trade meaningfully higher or lower than today’s level. Each narrative links its number to a specific view of how NRG Energy's growth, profitability and risks could change. You can revisit these views on the Community page as new information becomes available. One of the top community narratives on NRG Energy: 7% undervalued Read one of the top narratives on NRG Energy Do you think there's more to the story for NRG Energy? Head over to our Community to see what others are saying! For NRG Energy, the current picture points to a stock that the market already prices roughly in line with its tailored P/E framework rather than a clear bargain. The key question for you is whether projects like the LS Power assets, Vivint Smart Home and the Texas data center generation build can progress without eroding returns through higher risk, delays or extra capital strain. If you believe execution will run smoothly and earnings will justify a premium to peers, today’s valuation may still feel acceptable. If not, the stock’s cleaner upside case looks less obvious after the strong three year run. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NRG. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Tuesday, Aug. 4, 2026 at 9:00 a.m. ET Head of Investor Relations - Brendan Mulhern President and Chief Executive Officer - Robert Gaudette Operator: Good day, and thank you for standing by. Welcome to NRG Energy, Inc.'s Second Quarter 2026 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Brendan Mulhern, Head of Investor Relations. Please go ahead. Brendan Mulhern: Thank you. Good morning, and welcome to NRG Energy's Second Quarter 2026 Earnings Call. This morning's call is being broadcast live over the phone and via webcast. The webcast presentation and earnings release can be located in the Investors section of our website at www.nrg.com under Presentations and Webcast. Please note that today's discussion may contain forward-looking statements, which are based upon assumptions that we believe to be reasonable as of this date. Actual results may differ materially. We urge everyone to review the safe harbor in today's presentation as well as the risk factors in our SEC filings. We undertake no obligation to update these statements as a result of future events, except as required by law. In addition, we'll refer to both GAAP and non-GAAP financial measures. For information regarding our non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures, please refer to our earnings release and the non-GAAP reconciliations and supplemental data file located in the Investors section of our website. With that, I will now turn the call over to Robert Gaudette, NRG's President and Chief Executive Officer. Robert Gaudette: Good morning, and thank you for joining us. From the beginning, we've been focused on serving the next wave of power demand the right way. For the largest new loads, new demand should be matched with new generation with the customer supporting the investment. That's how growth at this scale should work. It protects existing customers, strengthens the grid and creates durable value for the communities we serve and for our shareholders. The developments in Texas over the last 24 hours reinforce why that approach matters. States want the economic growth that data centers can bring, but they also expect new demand to bring new supply, support the infrastructure it requires and strengthen, not strain the power systems and the communities that make it possible. The environment has changed. Our strategy has not. In fact, the direction of policy is moving toward the model we've been building from the beginning. We have the commercial structure, the equipment and the capabilities to deliver it at scale. Today, we'll walk you through the commercial framework we are pursuing, the 1.2 gigawatt project advancing under it and the broader opportunity in front of us. We are aligned on the principal commercial terms with the leading global cloud and AI hyperscaler, including their capital commitment to support 1.2 gigawatts of new generation in Texas with the potential to expand to 2.4 gigawatts. This is expected to be our first Bring Your Own Power project and reflects our strategy for large load growth. We believe it should be the industry standard, supporting economic growth, meeting our customers' expanding power needs and protecting families and small businesses. The commitment will be long term. The credit quality is strong. The economics support both the investment and our targeted return. This is disciplined growth at meaningful scale, structured around a large investment-grade customer and a clear path to do more. We also delivered solid second quarter results and are reaffirming our 2026 financial guidance. Bruce will cover the quarter in detail. As I mentioned, we're advancing a 1.2 gigawatt project in Texas with a leading global cloud and AI hyperscaler. We're aligned on the principal commercial terms with negotiations and remaining land-related matters progressing in parallel. The customer has made a financial commitment to advance the project. Importantly, the project is designed to bring more new generation to Texas than the data center is expected to require. We believe its design positions it well to meet the state's power and reliability objectives. Any final investment decision will be subject to the customary conditions, including required internal approvals. These are highly complex transactions with work to be done, but we're confident in the way we've structured and what we expect to deliver with our partner. NRG plans to develop, own and operate the new combined cycle gas plant. The facility is planned to support a 1-gigawatt data center load with additional Texas development opportunities that could expand the relationship to as much as 2.4 gigawatts. The project is supported by the turbine and EPC capacity we secured through GE Vernova and Kiewit. This investment also has to work for the surrounding community. We expect more than 1,400 high-paying construction jobs, 30 permanent roles at the plant and significant new tax revenue for local governments and schools. NRG has operated power plants in Texas for decades and our employees live in these communities. We know that water matters, and we and our customers are committed to responsible water stewardship and working closely with local stakeholders as development advances. We also understand the broader concerns surrounding data center growth. Communities expected growth to be -- that growth to be responsible to respect local resources and to create real lasting benefits. That's how we're approaching this opportunity. The project's initial term is at least 15 years from commercial operation with potential for extensions. Based on the current development schedule, commercial operations is targeted for late 2029 with full run rate earnings thereafter. At full operation, we expect $500 million of annual adjusted EBITDA and $375 million of annual free cash flow before growth. Those figures reflect the 1.2 gigawatt project and do not include the potential expansion. These are high-quality, long-duration earnings supported by an exceptional investment-grade counterparty. The project is expected to deliver attractive returns that achieve our required investment hurdles on a stand-alone basis and are even more compelling on a risk-adjusted basis. It also represents a build multiple below where NRG trades today. The contemplated facility is expected to require $3.2 billion of investment. Bruce will provide more detail on the capital requirements and how we're thinking about funding the project. But let me be clear. Our commitment to return at least $1 billion to shareholders through share repurchases each year is unchanged. We have the financial flexibility to fund this project as it advances, manage our path to target leverage and continue executing our capital allocation framework. The economics are compelling, and our commercial structure is what gives us confidence in their durability. Now let me walk you through it. On Slide 6, the commercial framework has 2 components. The capacity payment is designed to recover the capital we invest and deliver the return we require. A separate operating payment covers natural gas and plant operating costs. Put simply, we're paid for the megawatts we build and make available, not for how much the data center runs. That distinction is critical. The commercial structure provides for 95% of the project's free cash flow to be supported by capacity payments over the term, independent of data center utilization. Fuel and operating costs are recovered separately and the customer's commitment will be supported by an investment-grade parent guarantee. The result is durable, visible cash flow. Our return is established upfront and is not dependent on merchant power prices or natural gas prices. The more important point is that this structure is not unique to one project. We do not need to reinvent the model each time. The customer, location and project size may change, but the fundamentals remain the same. The commercial structure supports the investment, NRG develops, owns and operates the generation and the economics are established before construction begins. What differentiates NRG is our ability to bring the full solution together. We provide an integrated path to power from bridge solutions through permanent combined cycle generation with the flexibility to operate in island mode, grid-connected or transition between the two. Pairing generation with a load can also reduce the amount of incremental transmission infrastructure required to serve that demand, another important benefit of the BYOP model. We also bring the in-house capabilities to develop, engineer, interconnect, commission and operate the assets across their full life cycle. That gives the customer one experienced partner accountable from initial design through decades of operation. It reduces handoffs and helps lower execution risk across a highly complex power development. We've built those capabilities over decades and are proving them today. Our 1.5 gigawatt Texas Energy Fund portfolio remains on track, including T.H. Wharton, which we delivered on time and on budget. We moved early to secure both turbine and EPC capacity through GE Vernova and Kiewit, giving us the equipment and the execution capability required to continue building at scale. Few companies can bring all of those elements together. I am proud to say that NRG can. That is why this opportunity came to us and why we're positioned to do it again. On the next slide, the market setup is increasingly compelling. Across ERCOT and PJM, projected demand growth is materially ahead of the supply currently expected to come online. We do not need every forecasted project to materialize for both markets to require substantial new generation. That imbalance is changing the market. Customers need executable power solutions. Policymakers are pushing towards growth -- pushing growth towards customer-backed supply, and the value is moving toward companies with real development positions and the ability to deliver. Our BYOP framework answers the reliability and affordability concerns of elected officials and regulators. Our ability to design, build, own and operate a power plant for decades is a differentiator for our solutions. We have a history of working in and living in the community. We are a responsible operator and community member. In today's world, that matters. That's where NRG is positioned today. Now let me put the scale of the opportunity into perspective. The 1.2 gigawatt project discussed today is the first step in bringing the full potential into perspective. It represents the first 1.2 gigawatts of the 5.4 gigawatts of turbine and EPC capacity we've secured through 2032, with line of sight to the critical labor required to execute that build-out. Our broader development pipeline is more than twice the 5.4 gigawatts of capacity we have secured with every turbine slot tied to an active customer discussion. Customers recognize the value and scarcity of the development position we have assembled and our technical expertise and capabilities. And as you'd expect, engagement across that pipeline continues to build. Potential capital partners also recognize the value of what we've assembled, providing additional pathways to advance the broader opportunity through capital-efficient structures while preserving balance sheet flexibility and continuing our disciplined and consistent return of capital to shareholders. We also have about 2 gigawatts of upgrade opportunities across our PJM fleet. Together, that gives us a substantial runway to apply the model we just described. Let me be clear about how we will pursue that opportunity. We will not trade discipline for scale. Each project must stand on its own, meet our risk-adjusted return thresholds and be supported by the commercial and credit protections appropriate to the capital we deploy. Combining the established base with the 1.2 gigawatt BYOP project creates an illustrative '23 -- sorry, 2030 contracted free cash flow opportunity of $1.2 billion. For purposes of this illustration, we hold current capacity auction prices constant through 2033. That is an assumption, not a forecast of future auction outcomes. If we're successful in bringing this project to fruition, and I strongly believe we will be, then together with contracting the remaining new build opportunities and executing the uprates, the free cash flow supported by long-term agreements and capacity revenues can reach 95% of the midpoint of our company-wide 2026 free cash flow guidance by 2033. And that would only be one part of NRG. The rest of the business would continue to generate cash flow and create value alongside it. As a reminder, before any data center opportunities, our core business is expected to deliver 14-plus percent adjusted EPS CAGR through 2030. That is the opportunity to materially expand NRG while fundamentally improving the quality of its cash flow. We intend to help build the power infrastructure behind America's digital economy while protecting communities and customers, both large and small, all while creating a larger, stronger and higher quality NRG in the process. This is an important step. We intend for it to be the first of many. Bruce, over to you. Bruce Chung: Thank you, Rob. Turning to Slide 10. NRG delivered a solid quarter with adjusted EBITDA of $1.2 billion, up $308 million or 34% from the prior year period. Adjusted net income was $315 million compared to $339 million a year ago, and adjusted EPS was $1.49 compared to $1.73. Free cash flow before growth was $1.025 billion, up $111 million year-over-year. This was our first full quarter with the portfolio we acquired from LS Power, and we are exceptionally pleased with the quality of the assets and the contribution they are making to the business. The year-over-year increase in adjusted EBITDA was driven primarily by the acquired portfolio, higher PJM capacity values and continued growth in Smart Home. Adjusted net income and adjusted EPS were modestly lower as acquisition-related interest expense and D&A offset the higher EBITDA contribution. That is the expected near-term net income and EPS profile during the deleveraging period. As we reduce debt and associated interest expense, more of the portfolio's earnings contribution will flow through to EPS. Turning to segment results. Texas adjusted EBITDA declined $131 million year-over-year, primarily reflecting lower load and power prices. ERCOT Houston around-the-clock prices averaged $33 per megawatt hour during the quarter, 8% lower than last year and well below our 2026 planning assumption of $52. With prices low and volatility limited, our fleet had fewer opportunities to run and our commercial team had fewer opportunities to optimize the portfolio. East adjusted EBITDA increased $370 million year-over-year, driven primarily by the contribution from the portfolio acquired from LS Power. Energy margins from those assets did not fully realize the increase in PJM power prices because some pre-existing hedges were in place when we closed the transaction. Results also reflected higher supply costs in our retail businesses. One additional item in the East is Virginia's return to the Regional Greenhouse Gas Initiative or RGGI. After we acquired the portfolio from LS Power, Virginia enacted legislation requiring the state to rejoin the program effective July 1. That change applies to the 1.2 gigawatts of Virginia assets in the acquired portfolio and creates an estimated $70 million of incremental cost in 2026 that was not included in our underwriting. In the West, adjusted EBITDA increased $27 million year-over-year, primarily due to lower operating expenses following the expiration of a facility lease last year. Smart Home adjusted EBITDA increased $42 million, driven by continued customer growth and higher recurring service margin per customer. The business ended the quarter with 2.45 million customers, up 8% year-over-year and continues to deliver growth well ahead of the pace assumed in our long-term outlook. With solid second quarter results, we are reaffirming our 2026 guidance ranges. Through the first half of 2026, softer load and power prices in Texas and higher regional power supply costs incurred during Winter Storm Fern have us tracking below the midpoint of the ranges. While PJM prices have strengthened, pre-existing hedges on the acquired portfolio and higher RGGI costs have limited the near-term benefit. Our first half results largely reflect the impacts of weather and market conditions, not a change in the underlying performance of the business. We plan for outcomes like these when establishing our guidance ranges and actively manage the portfolio to align expected supply with committed customer load to ensure we deliver results within those guidance ranges. As a result, as we move through the balance of the year, we have limited unhedged exposure, and our outlook does not rely on a material recovery in commodity prices, thereby giving us confidence that we will deliver within our guidance ranges. Moving to Slide 11. We have updated our 2026 capital allocation plan to incorporate the initial investments in the 1.2 gigawatt Texas data center new build project Rob discussed. As you can see from the chart, aside from the reallocation of a portion of planned liability management to the new build investment, all other elements of our 2026 capital allocation remain unchanged. Importantly, this investment does not change our previously announced commitment to repurchase at least $1 billion of shares annually. The primary update is a new data center new build investment category, reflecting $721 million of expected project investment in 2026. Of that amount, $40 million was previously included in plant and other investments and has been reclassified, so the full project investment is presented in one place. The remaining $681 million is the incremental change to the plan and will be funded through lower liability management, resulting in less net debt reduction in 2026 than previously planned. It is important to note that the vast majority of the expected spend in 2026 relates to equipment-related procurement. Not only is this spend critical to the currently contemplated project, but it is also critical to the preservation of the increasingly valuable option the equipment represents given the prominence that new generation will have in the data center build-out. Since this spend is largely equipment related, it represents spend that can be pointed to other viable projects and therefore, is not sunk cost. Our approach to facilitating the data center build-out, combined with the pipeline of prospective opportunities we are pursuing, gives us confidence that these are prudent investments that will drive appropriate returns. As a reminder, in April, we advanced our post-acquisition deleveraging plan through a series of refinancing transactions. We retired substantially all of the $1.5 billion of Lightning senior secured notes we assumed in the acquisition and repaid a portion of the revolver borrowings used to fund the transaction. These actions extended our average maturities, reduced secured debt and are expected to generate more than $10 million of annual interest savings. Our long-term leverage target of 3x remains unchanged. We are also executing against our 2026 return of capital plan. Throughout the first half, we completed $921 million (sic) [ $932 million ] of share repurchases and paid $202 million in common dividends. For the full year, we continue to expect $1 billion of share repurchases and $407 million of common dividends. Turning to Slide 12. Rob covered the contemplated commercial structure. Let me focus on what it means financially and how we plan to fund the project. The commercial structure of the new build project protects the return we underwrite through an availability-based capacity payment, separate recovery of fuel and operating costs and limited commodity exposure. The customer is investment grade and its obligations will be backed by appropriate credit support. At full operation, the initial 1.2 gigawatt project is expected to generate at least $500 million of annual adjusted EBITDA and approximately $375 million of annual free cash flow before growth. On $3.2 billion of total investment, we expect the project to deliver a pretax unlevered IRR within our 12% to 15% target range. At the expected run rate EBITDA, that implies a build multiple of approximately 6x. These earnings are not included in the long-term framework we provided earlier this year. That framework, including our expectation for 14% plus adjusted EPS CAGR through 2030 is supported by the base business alone. This project represents substantial additional earnings power. We plan to fund the project through operating cash flow and balance sheet capacity, including lower liability management, resulting in less net debt reduction than previously planned over the construction period. We remain committed to long-term net leverage of 3x, which we believe is consistent with investment-grade credit metrics. We believe the expected cash flows and counterparty credit quality are constructive from a credit and ratings perspective. The funding plan preserves the capital allocation commitments we have previously made as we expect to continue to execute at least $1 billion of annual share repurchases through the construction period. Lastly, we expect the project to qualify for bonus depreciation upon COD. COD thereby further extending our cash tax runway. Moving to the next slide. Total investment for the 1.2 gigawatt project is expected to be $3.2 billion or $2,700 a kW, with capital deployed over 4 years and the largest outlays following key development and construction milestones. Cumulative investment through the end of 2026 is expected to be $0.8 billion, including previously made reservation payments. From there, we expect to invest $1 billion in 2027, $1.1 billion in 2028 and the remaining $0.3 billion in 2029 ahead of the expected late 2029 COD. 60% of the investment relates to EPC and the remainder relates to turbine equipment and other project costs. The investment profile is deliberately phased. Capital follows project progress with the largest outlays occurring after key milestones. We retain meaningful flexibility throughout development and construction. As I mentioned earlier, much of the 2026 spend relates to equipment, which, if necessary, could be redeployed at other viable projects. As such, we see this investment as less project-specific and more an investment in NRG's unique capabilities to deliver solutions that work for customers. Our current plan assumes NRG funds and owns the project. As development advances, we will evaluate opportunities to improve capital efficiency, including financial partners, while preserving the economics and strategic value of the investments. In closing, we delivered solid second quarter results and reaffirmed our 2026 guidance. The data center new build project adds a substantial new stream of contracted earnings beyond our existing framework with returns protected by a robust commercial structure and a funding plan that preserves the commitments we have made to shareholders. With that, I'll hand it back to Rob. Robert Gaudette: Thank you, Bruce. Let me close with where we stand. We delivered solid second quarter results, reaffirmed our 2026 guidance and made significant progress on our large load strategy through the 1.2 gigawatt BYOP opportunity discussed today. At the start of the year, we said we were targeting at least 1 gigawatt of large load agreements in 2026. We are advancing an opportunity that would deliver that objective with principal commercial terms aligned and negotiations and remaining land-related matters progressing. Any final investment decision will be subject to customary conditions, including required internal approvals. As I said at the outset, the environment has changed. Our strategy has not. Texas has made it clear that how large load growth is served matters. New demand must bring the power infrastructure required to support it, strengthen the system and avoid shifting the investment burden to families and small businesses. That direction plays directly to the model we have built. This project is designed to bring more generation than the data center is expected to require, reduce the need for incremental transmission and place the investment burden on the customer. That's why we believe the project is well positioned in Texas and why NRG is well positioned to lead. There is still work ahead. We will stay focused on advancing the project, executing across the broader business and maintaining the discipline that brought us to this point. We have made meaningful progress against what we set out to do. We are going to keep our heads down and finish the work. Operator, we're now ready to open the line for questions. Operator: [Operator Instructions] Our first question comes from the line of Julien Dumoulin-Smith of Jefferies. Julien Dumoulin-Smith: Congratulations, guys, on getting this across the finish line. Nicely done, Rob and gang. Yes, absolutely. So you know what I'm going to always ask here. So nicely done here, I'm very curious about an expansion of this site. I mean it seems that some of your sites have the opportunity to expand to that full 2.4 gigawatt. How are you thinking about the timeline to make it happen? I noticed, not to nitpick on the slides, it looks like it could be up to 18 months between the first and the second in terms of the COD. So how do you think about just setting expectations on the cadence around these incremental 1.2 gigawatt chunks, whether at that site or elsewhere? And then also, if you can, can you speak to the returns? Is this kind of a build multiple, shall we say, the new norm as to how you think about what these other projects are going to be? Or are they going to be slightly less favorable given that this is the first one and potentially the cheapest? Robert Gaudette: Yes. So there's a lot in there, Julien. So thank you. I'm going to try to answer everything you said. Let's start with returns. So the returns that we showed today on this particular project that we're moving forward, that's our expectation. That's what we've committed to our shareholders. And when we have conversations with customers, that's it, like this is what it's going to be. And everyone will flow a little bit here and there. But generally, that's what we expect to return to our shareholders for the capital they deploy. As far as how to think about timing and where projects go, the thing that gets set on delivery of these projects is the CODs of construction and the turbine deliveries themselves. right? Depending on how the customer wants to go, where the sites were going to go to and when we can get the turbine on the ground, that will determine kind of the speed that we go to. But what we've laid out historically is consistent with what we see across our pipeline because it's determined by what we see out of our GEV agreement. And so we have those conversations with customers. And then the last piece I would just in response to your statements, the one thing I would think about is the 1.2 gigawatts on a site to expand to 2.4, that doesn't rule out taking 2.4 somewhere. That doesn't rule out 4.8 somewhere, right? As we talk to customers and we think across these turbines, we have multiple customers looking for multiple turbines. The project that we put forward today and the one that we have the most alignment around is at a site, right? But don't get tied up on trying to sort out where or how because that's not the important part. What we're trying to get across is the commercial structure we put forward so that you guys can see how it works. And that is the conversation that we are having with every customer as to how we structure these deals because it's the right way to do it. We're working hard on it. We're not done, but we believe that this is an important piece of information for all of you guys to see. Bruce Chung: Julien, on the COD point, I'll just add. So this first one is late 2029. What we've said previously is the way that the GEV Kiewit structure is organized, you can assume there's another block, so 1.2 to come on serially year -- each year after the 2029 COD for the first one. Julien Dumoulin-Smith: Got it. Okay. So 12-month cadence. Nice. And then just a couple of nuances. First, just with the contract duration, is that typically the -- to complement the return, that duration is the new norm? And then also, how do you think about the Texas governor's announcement yesterday? Again, I know not necessarily specific and germane to this project, per se, but how does that impact just the time line as far as you're concerned? Robert Gaudette: Okay. So on the contract duration, we've told you guys 15 to 20 years. This particular structure is 15. We're not going to go less than that or I wouldn't expect to because that would dramatically change the price of the customer. On the Texas governor stuff, look, I understand where the politicians and regulators are in Texas. And I tried to make that point in this -- in our -- what I said earlier in my scripted remarks. Our project answers those questions, right? It is the right project to meet the concerns of the communities and the elected officials because it doesn't strain the grid and because it also can reduce the need for some transmission out there. As far as timing goes, Texas is to get things done state. I expect them to work through stuff to get to a higher quality understanding of the projects to be put down over time. And then the last part I would point out is, remember, this is a COD in 2029. So I think we're okay. Operator: Our next question comes from the line of Shar Pourreza of Wells Fargo. Shahriar Pourreza: Can you just maybe just a little bit higher level, just elaborate on the actual progress that's being made and kind of what drove the confidence to announce the principal terms at this stage? So I guess what types of final approvals could be outstanding? And when can those be expected? Robert Gaudette: Okay. So why we talked at all. It's important for our shareholders to understand both the structure of what we're pursuing, the strategy of how we're delivering on our GEV and Kiewit turbines. And we found that we were in a material place to have a conversation about progress so that each of you could understand where we're at. As far as things that are what we've stated today, right, we are commercially aligned, meaning that we have a -- they've seen the structure, they agree to the structure. We are close and in close conversations every day about specific timing or a piece of land or whatever those things are. The things that we're still subject to is we're still subject to negotiation. Moving forward is not done, and we will continue to push until we are, and we'll continue to have conversations with multiple customers until we are. And then it's obviously the required internal approvals and all of the things that go with that. The last thing I would say around timing, the next time we'll come back to you, Shar, we're going to tell you when we have another material piece of information to talk about. I'm not going to set myself or the negotiation team up with a time line to work against. But I feel very strongly that we will continue to push forward, and I believe that we will meet our objectives, both for the short term and the long term for this company. Shahriar Pourreza: Got it. That's perfect. And then just lastly, I mean, just given some of the noise around collateral requirements that we're seeing and stuff. And can you just maybe elaborate a little bit on the counterparties. It's obviously investment grade, but is it BBB? Is it single A? Can you just maybe elaborate a little bit on the credit quality of the counterparty? Robert Gaudette: To quote my predecessor, no. Shahriar Pourreza: I could see Larry right now shaking his head, saying, don't answer that, Rob. Don't answer that. Robert Gaudette: He is so happy with that answer. Operator: Our next question comes from the line of Nick Campanella of Barclays. Nicholas Campanella: Appreciate all the updates on the BYOP deal. Just a follow-up on the contract details. You used to kind of talk about when you were outlining for investors how to think about this targeted pricing. I know you kind of talked about like $80 plus per megawatt hour. So just with the returns on the slide that you're looking at and the CapEx cost being kind of a little bias higher since you've given that update. Just is the PPA equivalent now north of $90 -- north of $100? Any comments there? I know it's kind of like a fixed capacity charge pass-through, but how would you think about that? Robert Gaudette: Yes. So given the structure, the dollar per megawatt hour thing doesn't really matter because of the way we've structured it. I think if you were to do the math and expect a capacity -- or sorry, an expected usage off the data center, it's in the probably $85 to $90 plus range. But we really don't focus on that, right? It's all about -- it's good for the customer to not focus that way, and it's good for us to not focus that way. So that we -- this structure provides the certainty and the returns that we need for our investors, and it also provides flexibility and ways for the customer to think about managing their own risk depending on what their views look like. So we could hedge up that variable piece if they wanted, and that collateral would be their requirement. But we built as much flexibility in here because we started from the beginning with what do our shareholders need, how do we serve our customer and how do we serve the communities around it. That's how we've approached data centers. Nicholas Campanella: Maybe pivoting quick to just PJM. You kind of outlined in your contracted cash flow visibility walk, the potential to do something with the 2 gigs of upgrades in PJM. So just maybe an update on how you're thinking about the bilateral process or the procurement and how to think about that? Robert Gaudette: So it's a multipronged approach, right? There is the long-term auction opportunity, which we will bid into. And we're also in the bilateral conversations as we speak. The additional capacity that those upgrades offer are going to be valuable to anybody who wants to connect inside of PJM and not be subject to curtailments. So we know that it's valuable, and we are continuing to monitor and we will bid in through any process. The way to think about it is I am going to invest capital for this company in a place where we can get long-term durable cash flows. 15-year auction proceeds, that makes sense. And so would a bilateral conversation of the like term. Operator: Our next question comes from the line of Carly Davenport of Goldman Sachs. Carly Davenport: To start, maybe just a quick follow-up on Nick's question there. As you think about the upgrade opportunities, are you able to share how much of the 2 gigawatts is kind of economic at the $555 per megawatt day cap just to sort of size the opportunity on the central procurement side? Robert Gaudette: So if you -- depending on how you interpret that $555 cap, meaning can they procure above or not? The way I think about it, Carly, is it's probably about less than half of that 2,000 would go through that auction that way. But we continue to have bilateral conversations on all 2,000 megawatts. Carly Davenport: Got it. Okay. Very helpful. And then maybe just on the capital allocation side, as you talked about in prepared, it's kind of largely through the buyback program for the year at this point. How are you thinking about potential for incremental capital to be allocated there just as you think about where the equity is trading from a valuation standpoint? Bruce Chung: Carly, I think as we sit here today, to the extent that we have the ability to upsize the program, that will somewhat depend on where we land from a cash flow perspective for the year. If we're executing against this project and spending the capital that we had outlined, that's where we would see our money going because we see this project as being really valuable at the end of the day. But certainly, if the opportunity exists to be able to upsize the program with incremental cash flow, we'll definitely do that. Operator: Our next question comes from the line of Michael Sullivan of Wolfe. Michael Sullivan: I was going to ask if you could just elaborate a little more on what you're looking at on the funding side of things. I think you alluded to potential capital partners. We've seen Williams do something like that relatively recently. And then just what that can do for you from a balance sheet flexibility, credit metric standpoint? Bruce Chung: Yes. So Sully, I mean right now, the base case is that we just fund all of this on balance sheet and all that really results in is, we've previously spoken about being able to hit our 3x leverage ratio in 2028. If we were to move -- do this project and fund it on balance sheet, that just gets extended out to 2029. But there still would be deleveraging over the period for sure, even while we're funding the project. Obviously, if we pursue something that involves a partner, whether it be the Williams type structure or any other structure and that creates some incremental capacity, then honestly, that probably provides for more opportunity to increase the annual buyback program more than anything else. Michael Sullivan: Okay. And in terms of making that decision, is it just you need to leg into more of these agreements? Or it's just irrespective of that, it's still in conversation. Bruce Chung: I mean making that decision is really just a function of having the concerted conversations with potential partners and coming up with a structure that we think makes a lot of sense for us economically. And so we certainly intend to do that. Clearly, having the contract is important because the partners need to understand what they're theoretically investing into. And I think we're definitely getting to a point where those conversations can really start to happen in earnest. Michael Sullivan: Okay. Very helpful. And Rob, if you could just give us your latest thoughts on the ERCOT market pricing dynamic. I think people watching all-time peaks, limited volatility this year. But then at the same time, a lot of folks following this batch process, which seems to have a lot of load coming, but forward is not really reacting. Curious, you think what's kind of driving the pricing action there? Robert Gaudette: Yes. So Sully, you're referring to the fact that the ERCOT market is not valuing anything right now. Prices are low. They're low out the curve. People thought that maybe some announcements around batch would have driven those curves up. But what we've seen in markets over the last couple of decades is until it's real, it's not. And so things like concerns around delays, things like when is the stuff going to hit the ground, that's impacting, call it, the '27, '28 time frame in the curves today. At the end of the day, Texas is still a growing market. And it's got some battery and solar development to absorb through, call it, '26, '27 and maybe into a little bit into '28. If the data center market -- or sorry, data center development slows down, that inflection point changes or gets pushed out. But the fundamental doesn't change. ERCOT needs generation in the medium term because we can't get back to the place where we were 5 years ago. And given the tax implications or whatever subsidies for batteries and solar going away in, call it, '27, that build will dramatically reduce over time and the market tightens. And remember, you don't need all 500 gigawatts. You don't even need 1/3 of that to really tighten this market up to a place where everybody will be grateful that they have generation to support their customer loads. Operator: Our next question comes from the line of Angie Storozynski of Seaport. Agnieszka Storozynski: I just wanted to talk a little bit more about financing of the growth and how that's going to flow into your free cash flow. So basically, as we sit here today, I'm assuming that $1.5 billion out of the $3.2 billion of total CapEx is financed with debt. Is that fair? I mean that is assuming that 3x net debt to EBITDA for the project. And then how does that interest flow through the free cash flow that you will be reporting? And I understand that it's pre-growth, just the mechanics of the accounting for that interest. Bruce Chung: Yes. Angie, the interest expense will be -- it's IDC, so it will be capitalized. So we don't -- that wouldn't have an impact on our free cash flow before growth at the end of the day. Agnieszka Storozynski: And the assumption is that it's going to be basically Holdco unamortizing debt, right? So when I try to see what is the fully loaded return that these assets provide, I don't amortize this debt. I just account for the interest expense. Bruce Chung: Yes. I think that's probably fair. Just assume that there is a permanent capital structure related to the project of 3x. Agnieszka Storozynski: Yes. And then this 25% that you show as a deduction against EBITDA for maintenance CapEx and tax, I mean, the assumption is, right, that even in '29 or 2030, you're not a cash taxpayer, right? Bruce Chung: That's right. We provided what is otherwise kind of the long-term run rate. That doesn't necessarily suggest that, that is what the cash flow number would be in the early years when we have the benefit of the various tax shields. Agnieszka Storozynski: Okay. And what's the -- like roughly the math for maintenance CapEx for this sort of an asset? Is it, say, $50 million a year? Like what's the ballpark? Bruce Chung: We're not going to provide that just right now, Angie. We'll provide that at a later date. Agnieszka Storozynski: Okay. That's fine. And then secondly, so I mean, I'm looking at the breakdown between the cost of turbines versus the EPC contract. I mean, can you give us a sense, for example, that EPC component seems pretty big. Is there like the cost of new build advantage, is that mostly on the turbine side in a sense that as you announce additional projects, there is some sort of a market-based adjustment for the EPC component? How do we think about that? Matthew Pistner: Angie, I think -- this is Matt. I think the way to think about that is the EPC has 2 elements to it. It's the labor piece. They also bring a balance of plant equipment piece to it. So think about the turbines as the OEM and then a lot of the balance of equipment comes from the EPC. So that's why it may look a little bit higher than what you would think just the OEM providing everything view would be. Agnieszka Storozynski: Awesome. And then just the last question. So I appreciate the Virginia rejoining RGGI as a drag. Is there any other drag like related to below-market hedges for LS Power beyond '26, like as I think about '27 or '28? Bruce Chung: So Angie, the portfolio did come with some hedges that extended beyond 2026, not nearly as much as there were in 2026, but there were some hedges in 2027 that the portfolio did come over. And obviously, given when those were struck, those were struck at a slightly below level -- market level relative to today. Agnieszka Storozynski: And you're not going to say what percentage or how big a drag? Bruce Chung: We'll certainly provide that detail when we come out with 2027 guidance in our next earnings call. Operator: Our next question comes from the line of Moses Sutton of BNP Paribas. Moses Sutton: Congrats on the deal. To clarify Nick's question maybe through -- maybe more correct language here, would it be fair to consider the return structure as $1,150 a megawatt day, which gets you to $500 million EBITDA and that the P&L costs like O&M and fuel and how much you're using it are passed through on grossed up to revenue? And given later projects would have higher-priced turbines and EPC, is it fair to then assume cost of new entry you might assume on CCGTs is well above $1,200 a megawatt day? Robert Gaudette: Do you want to take that? Bruce Chung: Moses, we are not going to comment specifically on any of the specific terms of the contract. You've obviously done the math and depending on where you want to come out, we are squarely looking at a project that is within that 12% to 15% return. And so, however, that comes out in terms of your math, and that's what you should run with, but we're not going to comment specifically on that. Robert Gaudette: And Moses, on the future -- just to be clear on -- to answer your question, but also for clarity everywhere. If the cost of the build goes up over time, our expectations of return on your cash flow or on your investment don't change, right? So we will -- and we have open conversation with customers about that. We will always sign deals inside of our 12% to 15% hurdles always. Moses Sutton: Got it. Very helpful. And on that annualized capacity payment, does it simply switch on at COD? Or is it a multiyear stage ramp as the data center is ramping its own site plus the data center utilization? Bruce Chung: It switches on immediately upon COD. Operator: Our final question comes from the line of Nick Amicucci of Evercore ISI. Nicholas Amicucci: Just wanted to get sense, too. Bruce, kind of where we get confidence on kind of the 2026 guidance and where we can kind of shake out just given that we kind of have obviously more subdued prices in ERCOT and then kind of the benefit that you could see in PJM there. Bruce Chung: Yes. So Nick, I mean, obviously, as we said on the -- in the prepared remarks, given kind of where the first half has landed, we would probably forecast ourselves to be in the -- below the midpoint of the guidance range. But we still feel confident that we'll be within guidance range. And a lot of that confidence is really based on where we see the current fleet being hedged for the balance of the year, which is pretty much substantially hedged for the balance of the year and then how that gets layered on top of how we've matched our supply and committed load. And most of the committed load that we would have expected for the year has essentially been acquired or set up. And so therefore, that's the sort of visibility we have with respect to earnings and margins for the balance of the year. Nicholas Amicucci: Great. And then just as we think about the upgrade opportunity in the PJM, so those 2 gigawatts, I know you had said roughly half we can think about in the RFP. But when we think about that kind of CT-to-CCGT conversion, just where would -- what's kind of like the rule of thumb if we're thinking about that relative to -- from a build cost relative to the $2,700 on the greenfield side? Robert Gaudette: Lower and faster. Operator: This concludes the question-and-answer session. I would now like to turn it back to Robert Gaudette for closing remarks. Robert Gaudette: Thank you, and thanks, everyone, for joining us this morning. We're pleased with the quarter and with the progress we outlined today. We will always be disciplined with the allocation of your capital. The update reinforces why we believe BYOP is the right model for serving large load growth, bringing new supply alongside new demand, strengthening the grid and protecting existing customers. There is work ahead, but we're executing well and remain confident in the opportunity and our ability to create long-term value for shareholders. Thank you again for your time and for your interest in NRG. Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Before you buy stock in NRG Energy, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and NRG Energy wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends NRG Energy. The Motley Fool has a disclosure policy. NRG Energy (NRG) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

NRG Energy, Inc. NRG used its second-quarter 2026 call to make a 1.2-gigawatt Texas data-center power project central to its growth strategy. Management emphasized customer-backed investment and protected returns. Adjusted earnings of $1.49 per share missed the Zacks Consensus Estimate of $1.66, while revenues of $7.48 billion topped the $5.88 billion estimate. Management reaffirmed 2026 guidance but said results are tracking below the midpoint. NRG Energy, Inc. price-consensus-eps-surprise-chart | NRG Energy, Inc. Quote President and CEO Robert Gaudette said NRG is aligned on principal terms with a cloud and AI hyperscaler for a 1.2-gigawatt combined-cycle gas facility. The relationship could expand to 2.4 gigawatts, though documentation, land matters and approvals remain outstanding. NRG would develop, own and operate the plant for a 1-gigawatt data-center load. Commercial operation is targeted for late 2029, with a term of at least 15 years. Gaudette presented the project as a repeatable Bring Your Own Power model. NRG has secured 5.4 gigawatts of turbine and construction capacity through 2032, with a pipeline of more than twice that amount. Gaudette said the structure separates an availability-based capacity payment from fuel and operating-cost recovery. Capacity payments should support 95% of the project's free cash flow, independent of data-center utilization, with an investment-grade parent guarantee. Executive vice president and CFO Bruce Chung expects at least $500 million of adjusted EBITDA and about $375 million of free cash flow before growth annually at full operation. NRG targets a 12-15% pretax unlevered return on its $3.2 billion investment. A BNP Paribas analyst sought pricing details. Chung declined to disclose the terms but said the capacity payment begins immediately at commercial operation, while Gaudette maintained the same return hurdle for future projects. Chung reaffirmed 2026 guidance for adjusted EBITDA of $5.325 billion to $5.825 billion, adjusted earnings of $7.90 to $9.90 per share and free cash flow before growth of $2.8 billion to $3.3 billion. He said first-half results place NRG below the midpoint because of softer Texas demand and prices, Winter Storm Fern costs, inherited hedges and $70 million of incremental costs from Virginia rejoining the Regional Greenhouse Gas Initiative. An Evercore ISI analyst questioned guidance confidence. Chung said the fleet is substantially hedged for the rest of 2026, supply is aligned with committed load and the outlook does not require a material commodity-price recovery. Chung outlined $721 million of expected project investment in 2026. The $681 million change will come from reduced liability management, resulting in lower net debt reduction. Under the base case, NRG would fund and own the project. Chung said this would move the expected timing for reaching the 3-times leverage target from 2028 to 2029, while partners remain under consideration. The commitment to at least $1 billion of annual share repurchases remains unchanged. In response to a question from a Goldman Sachs analyst, Chung said incremental cash flow could support an increase, but project spending would take priority. Texas adjusted EBITDA fell $131 million to $381 million as lower load and power prices reduced generation opportunities. East adjusted EBITDA rose $370 million to $469 million, mainly driven by the LS Power portfolio and higher capacity values, though existing hedges limited the benefit. A Wolfe Research analyst asked about subdued ERCOT forward prices. Gaudette said markets are waiting for projected load growth to become tangible while maintaining that Texas will need additional medium-term generation. A Seaport Research Partners analyst asked about inherited hedges beyond 2026. Chung said some below-market positions extend into 2027 at a much lower level, with details planned alongside 2027 guidance. Management remained confident but emphasized that the Texas project is unfinished. Gaudette said each opportunity must meet stand-alone risk-adjusted return thresholds and include appropriate commercial and credit protections. NRG remains focused on final negotiations, shareholder returns and new-build and PJM upgrade opportunities that can provide long-duration cash flows. NRG carries a Zacks Rank #3 (Hold), reflecting a neutral near-term stance. Its Value Score of B is favorable for investors prioritizing valuation characteristics. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The Growth Score of F, the Momentum Score of D and the VGM Score of D indicate weaker readings across those styles and the combined profile. Style Scores complement the Zacks Rank, which can change as earnings estimates are revised after the just-reported results. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NRG Energy, Inc. (NRG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in NRG Energy, Inc.? Here are five stocks we like better. NRG reported strong Q2 results, with adjusted EBITDA up 34% year over year to $1.2 billion and free cash flow before growth reaching $1.025 billion. Growth was driven by the LS Power acquisition, higher PJM capacity values and Smart Home expansion, despite weaker Texas performance. NRG plans to develop a 1.2-GW Texas natural-gas plant for an unnamed hyperscaler, targeting late 2029 operations. The $3.2 billion project is expected to generate at least $500 million in annual adjusted EBITDA and benefit from capacity payments covering 95% of projected free cash flow. The project will shift some 2026 capital away from liability reduction, delaying NRG’s 3-times net-leverage target from 2028 to 2029, but the company maintained plans for at least $1 billion in share repurchases and $407 million in dividends. NRG also reaffirmed its 2026 guidance, while noting results are tracking below the midpoint. Energy Vault Electrifies Market With Accelerated Growth NRG Energy (NYSE:NRG) reported second-quarter 2026 adjusted EBITDA of $1.2 billion, up 34% from a year earlier, while outlining plans for a 1.2-gigawatt Texas power plant intended to support a cloud and artificial intelligence hyperscaler’s data center load. President and Chief Executive Officer Robert Gaudette said NRG is aligned on principal commercial terms with the unnamed investment-grade customer. The project remains subject to negotiations, land-related matters and customary internal approvals, but the customer has made a financial commitment to advance development, according to the company. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control Hims, Block, and NRG Just Launched Huge Stock Buybacks The proposed combined-cycle natural gas plant would be developed, owned and operated by NRG. It is planned to serve a 1-gigawatt data center load and could eventually expand the customer relationship to as much as 2.4 GW. Commercial operation for the initial 1.2-GW facility is targeted for late 2029. Gaudette described the arrangement as NRG’s first “bring your own power” project, or BYOP, a model under which new power demand is paired with new generation supported by the customer. He said the facility is designed to add more generation to Texas than the data center is expected to require. → 3 Drone Stocks That Should Soar After the Summer Slump Best Utilities Stocks for Stability and Growth in 2025 Under the contemplated structure, NRG would receive capacity payments intended to recover its invested capital and provide its targeted return, while separate payments would recover fuel and operating costs. The company said 95% of the project’s free cash flow would be supported by capacity payments independent of the data center’s utilization rate. “We’re paid for the megawatts we build and make available, not for how much the data center runs,” Gaudette said. The customer’s obligations would be backed by an investment-grade parent guarantee. → Why Rare Earth Processing Could Be the Real 2027 Opportunity NRG expects the 1.2-GW project to require $3.2 billion of investment, or about $2,700 per kilowatt. At full operation, management expects at least $500 million of annual adjusted EBITDA and approximately $375 million of annual free cash flow before growth. Chief Financial Officer Bruce Chung said the anticipated pre-tax unlevered internal rate of return is within NRG’s 12% to 15% target range, implying an approximately 6-times build multiple at projected run-rate EBITDA. The initial agreement would have a term of at least 15 years from commercial operation, with potential extensions. Chung said capacity payments would begin immediately upon commercial operation rather than ramping as the data center increases usage. NRG has secured 5.4 GW of turbine and engineering, procurement and construction capacity through 2032 via GE Vernova and Kiewit. Gaudette said the company’s development pipeline exceeds twice that capacity, with each turbine slot tied to active customer discussions. The company also cited roughly 2 GW of upgrade opportunities across its PJM fleet. NRG updated its 2026 capital allocation plan to include $721 million of expected spending on the Texas new-build project. Of that amount, $40 million was reclassified from plant and other investments, while $681 million represents incremental spending funded by reducing planned liability management. The revised approach means less net debt reduction in 2026 than previously planned, but management said its shareholder-return plans remain unchanged. NRG continues to expect at least $1 billion of annual share repurchases and $407 million in common dividends for 2026. During the first half, the company repurchased $921 million of shares and paid $202 million in dividends. NRG expects cumulative project investment of about $800 million through the end of 2026, including prior reservation payments, followed by $1 billion in 2027, $1.1 billion in 2028 and $300 million in 2029. About 60% of total investment relates to EPC costs, with the remainder allocated to turbine equipment and other project costs. Chung said NRG’s base case is to fund the project through operating cash flow and balance-sheet capacity. Under that approach, reaching the company’s 3-times net leverage target would shift from 2028 to 2029. The company may also consider financial partners to improve capital efficiency, though no such arrangement has been announced. Adjusted EBITDA rose $308 million year over year, driven primarily by the portfolio acquired from LS Power, higher PJM capacity values and Smart Home growth. Adjusted net income fell to $315 million from $339 million, while adjusted earnings per share declined to $1.49 from $1.73, as acquisition-related interest expense and depreciation and amortization offset EBITDA growth. Free cash flow before growth was $1.025 billion, up $111 million from the prior-year quarter. Texas adjusted EBITDA declined $131 million, reflecting lower load and power prices. East adjusted EBITDA increased $370 million, primarily due to the LS Power portfolio acquisition. West adjusted EBITDA increased $27 million, aided by lower operating expenses after a facility lease expired last year. Smart Home adjusted EBITDA increased $42 million; customer count reached 2.45 million, up 8% year over year. In Texas, ERCOT Houston around-the-clock prices averaged $33 per megawatt-hour during the quarter, down 8% from a year earlier and below NRG’s $52 planning assumption for 2026. Lower prices and limited volatility reduced generation dispatch and portfolio optimization opportunities, Chung said. In the East, legacy hedges associated with the acquired assets limited NRG’s ability to fully capture higher PJM power prices. The company also cited higher retail supply costs and an estimated $70 million of incremental 2026 costs associated with Virginia’s return to the Regional Greenhouse Gas Initiative, affecting 1.2 GW of acquired Virginia assets. NRG reaffirmed its 2026 guidance ranges, although Chung said first-half results indicate performance is tracking below the midpoint. He said the company has limited unhedged exposure for the remainder of the year and does not depend on a material recovery in commodity prices to remain within its guidance ranges. Management said the proposed Texas project is not included in NRG’s previously issued long-term framework, which calls for adjusted EPS compound annual growth of more than 14% through 2030 from the base business. Gaudette said the company intends to maintain its return thresholds and credit protections as it evaluates additional large-load generation projects. NRG Energy (NYSE: NRG) is a U.S.-based integrated power company headquartered in Houston, Texas. The company develops, owns and operates a diversified portfolio of power generation assets and participates in wholesale and retail energy markets. NRG supplies electricity to utilities, commercial and industrial customers, and retail consumers, while also providing energy-related products and services designed to manage consumption and support reliability. NRG's generation mix includes conventional thermal plants as well as renewable and distributed energy resources. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "NRG Energy Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Clearway Energy (CWEN) came out with quarterly earnings of $1 per share, beating the Zacks Consensus Estimate of $0.24 per share. This compares to earnings of $0.28 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +316.67%. A quarter ago, it was expected that this company created by NRG Energy to acquire and operate natural gas, solar and wind plants would post a loss of $0.45 per share when it actually produced a loss of $1.35, delivering a surprise of -200%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Clearway Energy, which belongs to the Zacks Alternative Energy - Other industry, posted revenues of $481 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.26%. This compares to year-ago revenues of $392 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Clearway Energy shares have lost about 4.6% since the beginning of the year versus the S&P 500's gain of 13%. While Clearway Energy has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Clearway Energy was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #5 (Strong Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.34 on $502.39 million in revenues for the coming quarter and -$1.03 on $1.71 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Alternative Energy - Other is currently in the bottom 35% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Hallador Energy (HNRG), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 10. This coal, oil and gas producer is expected to post quarterly loss of $0.12 per share in its upcoming report, which represents a year-over-year change of -163.2%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Hallador Energy's revenues are expected to be $85.75 million, down 16.7% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Clearway Energy, Inc. (CWEN) : Free Stock Analysis Report Hallador Energy Company (HNRG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. NRG Energy Inc (NYSE:NRG) announced a landmark 1.2 GW 'bring your own power' project with a leading global cloud and AI hyperscaler, potentially expanding to 2.4 GW, which aligns with its strategy for large load growth. The project's commercial structure ensures 95% of free cash flow is supported by capacity payments, independent of data center utilization, with fuel and operating costs recovered separately, providing durable and visible cash flow. At full operation, the project is expected to generate $500 million in annual adjusted EBITDA and $375 million in annual free cash flow before growth, with a build multiple of approximately 6x and a pre-tax unlevered IRR within the 12%-15% target range. NRG Energy Inc (NYSE:NRG) reaffirmed its 2026 guidance and maintained its commitment to at least $1 billion in annual share repurchases, with the project funded through operating cash flow and balance sheet capacity without altering shareholder returns. The company has secured 5.4 GW of turbine and EPC capacity through 2032, with a development pipeline more than double that size, positioning it to capitalize on growing demand in ERCOT and PJM markets. NRG Energy Inc (NYSE:NRG) delivered solid Q2 2026 results with adjusted EBITDA up 34% year-over-year, driven by the acquired LS Power portfolio, higher PJM capacity values, and continued Smart Home growth. Texas adjusted EBITDA declined $131 million year-over-year due to lower load and power prices, with ERCOT Houston around-the-clock prices averaging $33/MWh, 8% lower than last year and well below the $52 planning assumption. The company faces an estimated $70 million incremental cost in 2026 from Virginia's re-entry into RGGI, which was not included in the original underwriting of the acquired LS Power portfolio. Adjusted net income and adjusted EPS were modestly lower year-over-year due to acquisition-related interest expense and D&A, reflecting the expected deleveraging period. The 2026 capital allocation plan now includes $721 million in data center new build investments, funded by lower liability management, resulting in less net debt reduction than previously planned and extending the timeline to reach the 3x leverage target to 2029. The project's commercial operations are not expected until late 2029, meaning the substantial earnings contribution will not materialize for several years, with significant capital outlays required in the interim. The acquired LS Power portfolio has pre-existing hedges that limit the near-term benefit from higher PJM power prices, and some hedges extend into 2027, potentially dampening future upside. Warning! GuruFocus has detected 9 Warning Signs with NRG. Is NRG fairly valued? Test your thesis with our free DCF calculator. Q: Can you elaborate on the progress made on the 1.2-gigawatt BYOP project and what drove the confidence to announce principal terms at this stage? What final approvals are outstanding and when can they be expected?A: Rob Claudette (CEO): We are commercially aligned with the customer on the structure, and negotiations and land-related matters are progressing in parallel. The customer has made a financial commitment to advance the project. Final investment decisions are subject to customary conditions, including required internal approvals. We will provide updates when we have another material piece of information to discuss, rather than setting a specific timeline for the negotiation team. Q: What are the financial details and expected returns for the 1.2-gigawatt Texas data center project? How will it be funded?A: Bruce Chung (CFO): The project is expected to generate at least $500 million of annual adjusted EBITDA and approximately $375 million of annual free cash flow before growth at full operation. On a $3.2 billion total investment, we expect a pre-tax unlevered IRR within our 12% to 15% target range, implying a build multiple of approximately six times. We plan to fund it through operating cash flow and balance sheet capacity, including lower liability management, which extends our deleveraging timeline to 2029. Our commitment to at least $1 billion of annual share repurchases remains unchanged. Q: How should we think about the expansion potential to 2.4 gigawatts and the cadence of future projects? Are the returns on this project the new norm?A: Rob Claudette (CEO): The returns we've outlined are our expectation and what we've committed to shareholders. We will always sign deals inside our 12% to 15% hurdles. The timing of future projects is determined by turbine deliveries and construction CODs. Bruce Chung (CFO): Based on the GE Vernova and Kiewit structure, you can assume another 1.2-gigawatt block comes online serially each year after the 2029 COD for the first one. Q: Given the commercial structure, what is the equivalent PPA price per megawatt hour? Is it now north of $90 or $100 given higher CapEx costs?A: Rob Claudette (CEO): The dollar per megawatt hour metric doesn't really matter given the structure. If you were to do the math based on expected data center usage, it's probably in the $85 to $90 plus range. The structure provides certainty and returns for our investors while offering flexibility for the customer to manage their own risk. We built in flexibility from the start, focusing on what our shareholders need, how we serve our customer, and how we serve the communities. Q: Can you provide an update on the 2-gigawatt PJM upgrade opportunities? How much is economic at the $555 per megawatt-day cap, and how are you thinking about the bilateral process?A: Rob Claudette (CEO): It's a multi-pronged approach. We will bid into the long-term auction and are also in bilateral conversations. Probably less than half of the 2,000 megawatts would go through the auction at that cap, but we continue to have bilateral conversations on all 2,000 megawatts. We will invest capital where we can get long-term durable cash flows, whether through 15-year auction proceeds or bilateral conversations of similar terms. Q: How are you thinking about potential incremental capital allocation to share buybacks given where the equity is trading?A: Bruce Chung (CFO): To the extent we have the ability to upsize the program, it will depend on where we land from a cash flow perspective for the year. If we're executing against this project and spending the capital outlined, that's where we would see our money going because we see this project as really valuable. However, if the opportunity exists to upsize the program with incremental cash flow, we will definitely do that. Q: What are your latest thoughts on ERCOT market pricing dynamics, given all-time peaks, limited volatility, and the batch process?A: Rob Claudette (CEO): The ERCOT market is not valuing anything right now, with prices low out the curve. Until projects are real, they don't impact the curve. Texas is still a growing market with battery and solar development to absorb through 2026-2027. The fundamental doesn't change: ERCOT needs generation in the medium term. You don't need all 500 gigawatts of data center load; you don't even need a third of that to really tighten the market up. Q: How should we think about the financing of the growth and how it flows into free cash flow? Is the $1.5 billion of the $3.2 billion CapEx financed with debt? How does interest flow through?A: Bruce Chung (CFO): The interest expense will be capitalized as IDC (interest during construction), so it won't have an impact on free cash flow before growth. It's fair to assume a permanent capital structure related to the project of three times net debt to EBITDA. The project qualifies for bonus depreciation upon COD, extending our cash tax runway, so the early years will benefit from various tax shields. Q: Is the return structure equivalent to $1,150 per megawatt-day, and given higher priced turbines and EPCs for later projects, is it fair to assume cost of new entry on CCGTs is well above $1,200 per megawatt-day?A: Bruce Chung (CFO): We are not going to comment specifically on any of the specific terms of the contract. You've done the math, and we are squarely looking at a project within that 12% to 15% return. Rob Claudette (CEO): If the cost of the build goes up over time, our expectations of return on investment don't change. We will always sign deals inside our 12% to 15% hurdles. Q: Does the annualized capacity payment switch on at COD or is there a multi-year staged ramp as the data center ramps its own site?A: Bruce Chung (CFO): It switches on immediately upon COD. Q: Where do you get confidence in the 2026 guidance given subdued ERCOT prices and the benefit you could see in PJM?A: Bruce Chung (CFO): We would forecast ourselves to be below the midpoint of the guidance range, For the complete transcript of the earnings call, please refer to the full earnings call transcript.

NRG Energy Inc. (NYSE:NRG) reported second-quarter 2026 results that featured stronger-than-expected revenue but earnings that fell short of Wall Street forecasts. Despite the earnings miss, investors responded positively, sending the company’s shares 2.55% higher in pre-market trading. NRG posted adjusted earnings of $1.49 per share for the quarter, below the analyst consensus estimate of $1.82. Revenue, however, rose to $7.48 billion, slightly ahead of market expectations of $7.46 billion and representing an 11% increase from $6.74 billion in the same period last year. NRG maintained its full-year 2026 adjusted earnings guidance of between $7.90 and $9.90 per share. The midpoint of the forecast, $8.90, remains just below the analyst consensus estimate of $8.95. Management chose to leave its outlook unchanged despite the mixed quarterly performance. Adjusted EBITDA increased significantly to $1.22 billion, compared with $909 million a year earlier. The improvement was driven by the addition of assets acquired from LS Power and stronger capacity pricing in the Eastern region. These gains were partially offset by milder weather conditions and higher energy supply costs. Adjusted net income declined to $315 million from $339 million in the prior-year quarter, primarily reflecting higher interest expense and increased depreciation linked to the LS Power acquisition. President and Chief Executive Officer Robert Gaudette highlighted progress on NRG’s long-term power infrastructure strategy. “Today we provided a progress update on our Bring Your Own Power data center strategy,” said Robert Gaudette, President & CEO. “This is the model for how large load growth should work. The customer supports the investment, with reliability and affordability protected for all.” NRG announced further progress on its Bring Your Own Power initiative through a partnership with a leading hyperscale customer to develop a 1.2-gigawatt combined-cycle natural gas facility in Texas, subject to final approvals. The company also confirmed that its 415-megawatt T.H. Wharton facility entered commercial operation in May 2026, becoming the first of three Texas Energy Fund projects expected to deliver a combined 1.5 gigawatts of capacity by mid-2028. Free cash flow before growth investments reached $1.03 billion during the quarter, up from $914 million in the same period last year. The stronger cash generation reflected improved operating performance and continued investment in long-term infrastructure projects. NRG Energy stock price

NRG Energy, Inc. NRG reported second-quarter 2026 adjusted earnings of $1.49 per share, which missed the Zacks Consensus Estimate of $1.66 by 10.2%. The bottom also line declined 11.3% from $1.68 in the year-ago quarter. Total revenues were $7.48 billion, which beat the Zacks Consensus Estimate of $5.89 billion by 27%. The top line also increased 11% from the prior-year quarter’s level of $6.74 billion. NRG Energy, Inc. price-consensus-eps-surprise-chart | NRG Energy, Inc. Quote The company recorded adjusted EBITDA of $1.22 billion in the second quarter, up 33.9% from $0.91 billion registered a year ago.Total operating costs and expenses were $6.54 billion, down 2.9% from $6.74 billion in the year-ago quarter.Operating income in the second quarter totaled $976 million.Through July 31, 2026, NRG completed $932 million in share repurchases and distributed $202 million in common stock dividends. In 2026, the company plans to return $1 billion through share repurchases and common stock dividends of around $407 million. NRG advanced its Bring Your Own Power strategy with a global cloud and artificial intelligence hyperscaler. The parties are aligned on principal commercial terms for developing a 1.2-gigawatt combined-cycle natural gas generation facility in Texas, subject to final documentation and approvals.The company also achieved commercial operations at the 415-megawatt T.H. Wharton facility. Its two other Texas Energy Fund projects remained on schedule and within budget. As of June 30, 2026, NRG had cash and cash equivalents worth $0.16 billion compared with $4.71 billion as of Dec. 31, 2025.As of June 30, 2026, long-term debt and finance leases amounted to $21.74 billion compared with $16.41 billion as of Dec. 31, 2025.Cash provided by operating activities in the first six months of 2026 totaled $0.95 billion compared with $1.31 billion in the year-ago quarter. Capital expenditures amounted to $655 million in the first six months of 2026 compared with $595 million in the year-ago quarter.Total liquidity was $5.28 billion, down from $9.63 billion, primarily due to funding the acquisition of generation assets and CPower from LS Power. NRG Energy expects its 2026 adjusted net income to be in the range of $1.685-$2.115 billion.The company expects its 2026 adjusted EPS to be in the range of $7.90-$9.90. The Zacks Consensus Estimate is pegged at $9.70, which is at the higher end of the company’s guided range.Free Cash Flow before Growth for 2026 is anticipated to be in the range of $2.8-$3.3 billion.NRG expects 2026 adjusted EBITDA in the band of $5.325-$5.825 billion. NRG Energy has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Edison International EIX reported second-quarter 2026 core earnings of $1.54 per share, beating the Zacks Consensus Estimate of $1.02 by 51%. The bottom line surged 58.8% from 97 cents in the year-ago quarter.Edison International's second-quarter operating revenues totaled $4.36 billion, which missed the Zacks Consensus Estimate of $4.72 billion by 7.7%. The top line also decreased 4.1% from the year-ago quarter’s figure of $4.54 billion.IDACORP, Inc. IDA reported second-quarter 2026 earnings of $1.79 per share, which topped the Zacks Consensus Estimate of $1.75 by 2.3%. The company’s earnings also improved 1.7% from $1.76 in the year-ago quarter.Total revenues in the second quarter of 2026 were $469.8 million, lagging the Zacks Consensus Estimate of $478 million by 1.8%. However, the metric rose 4.2% from $450.9 million in the year-ago quarter.PG&E Corporation PCG reported second-quarter 2026 adjusted earnings per share of 40 cents, which beat the Zacks Consensus Estimate of 37 cents by 8.1%. The bottom line also increased 29% from the year-ago quarter’s figure of 31 cents.PCG reported second-quarter total revenues of $5.902 billion, up 0.1% from $5.898 billion registered in the year-ago period. However, the top line missed the Zacks Consensus Estimate of $6.31 billion by 6.4%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NRG Energy, Inc. (NRG) : Free Stock Analysis Report Edison International (EIX) : Free Stock Analysis Report Pacific Gas & Electric Co. (PCG) : Free Stock Analysis Report IDACORP, Inc. (IDA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management is pivoting toward a 'Bring Your Own Power' (BYOP) model for large load growth, requiring new demand to be matched with new generation to protect existing customers and grid stability. The company has aligned on principal commercial terms with a global hyperscaler for a 1.2 GW project in Texas, with potential expansion to 2.4 GW, structured to deliver long-term, investment-grade earnings. Performance in the second quarter was driven by the successful integration of the LS Power portfolio and higher PJM capacity values, despite lower load and power prices in Texas. The commercial structure is designed to decouple returns from commodity volatility by utilizing availability-based capacity payments that recover capital and operating costs regardless of data center utilization. NRG is leveraging its secured 5.4 GW turbine and EPC pipeline to address the widening supply-demand imbalance in ERCOT and PJM markets. Management emphasized that their integrated capabilities—from development and engineering to long-term operation—serve as a key differentiator in securing complex hyperscale partnerships. The 1.2 GW Texas project is targeted for commercial operation in late 2029, with an expected annual adjusted EBITDA contribution of $500 million and $375 million in free cash flow. Management reaffirmed 2026 financial guidance, noting that while currently tracking below the midpoint due to mild weather, the business is substantially hedged for the remainder of the year. The company maintains a commitment to return at least $1 billion annually to shareholders through repurchases, even as it reallocates some liability management funds toward the $3.2 billion project investment. Future growth assumes a serial deployment of secured turbine slots, with a 1.2 GW block potentially coming online each year following the initial 2029 COD. Long-term projections suggest that by 2033, contracted free cash flow from new builds and PJM uprates could reach 95% of the company's 2026 free cash flow guidance midpoint. Virginia's legislative decision to rejoin the Regional Greenhouse Gas Initiative (RGGI) is expected to create a $70 million incremental cost headwind in 2026. The 1.2 GW project investment is subject to final investment decisions, including remaining land-related matters and customary internal approvals. Management noted that while Texas policy is shifting toward requiring customer-backed supply, the BYOP model is specifically designed to mitigate regulatory and community concerns regarding resource strain. The funding plan for new builds will result in a slower deleveraging profile, with the 3x net leverage target now expected to be reached in 2029 rather than 2028. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management confirmed that the secured turbine and EPC capacity allows for a serial cadence, with additional 1.2 GW blocks potentially coming online every 12 months after the initial 2029 COD. The 1.2 GW to 2.4 GW site expansion does not preclude the company from pursuing larger 4.8 GW developments elsewhere in the pipeline. Management believes their project design aligns with recent political signals in Texas because it brings more generation than the data center requires and reduces transmission needs. The 2029 COD provides a sufficient buffer for the state to work through new regulatory frameworks for large load growth. NRG is pursuing a multipronged approach for its 2 GW PJM upgrade pipeline, including bidding into long-term auctions and engaging in bilateral conversations. Approximately half of the 2 GW upgrade capacity could potentially go through the PJM central procurement process, while the remainder is targeted for bilateral deals. While the base case assumes NRG funds and owns 100% of the project, management is evaluating financial partners to improve capital efficiency. Bringing in a partner could accelerate share repurchases beyond the $1 billion annual commitment by freeing up balance sheet capacity.

NRG Energy (NRG) came out with quarterly earnings of $1.49 per share, missing the Zacks Consensus Estimate of $1.66 per share. This compares to earnings of $1.68 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -10.24%. A quarter ago, it was expected that this power company would post earnings of $1.78 per share when it actually produced earnings of $1.48, delivering a surprise of -16.85%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. NRG, which belongs to the Zacks Utility - Electric Power industry, posted revenues of $7.48 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 27.02%. This compares to year-ago revenues of $6.74 billion. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. NRG shares have lost about 13% since the beginning of the year versus the S&P 500's gain of 11%. While NRG has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for NRG was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $3.90 on $7.37 billion in revenues for the coming quarter and $9.70 on $32.79 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Utility - Electric Power is currently in the bottom 29% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. MGE (MGEE), another stock in the same industry, has yet to report results for the quarter ended June 2026. This public utility holding company is expected to post quarterly earnings of $0.77 per share in its upcoming report, which represents a year-over-year change of +6.9%. The consensus EPS estimate for the quarter has been revised 8.7% higher over the last 30 days to the current level. MGE's revenues are expected to be $166.37 million, up 4.3% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NRG Energy, Inc. (NRG) : Free Stock Analysis Report MGE Energy Inc. (MGEE) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research