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NRG Energy Lights Up on Earnings Beat and Storm Impact

NRG fourth-quarter earnings jumped and the company said it appeared able to weather the financial impact of the recent Texas storms.
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NRG Energy  (NRG)  was giving off sparks on Monday after the power company posted better-than-expected fourth-quarter earnings and said it appeared able to weather the financial impact of the storms that recently ravaged Texas.

Shares of the Princeton, N.J., company at last check were climbing 15% to $42.01.

NRG reported fourth-quarter earnings of $2.10 a share, up from $1.27 in the year-earlier quarter. Analysts surveyed by FactSet were forecasting earnings of 45 cents a share.

Revenue totaled $2 billion, compared with $2.2 billion a year earlier. The FactSet consensus called for revenue of $2.4 billion.

Regarding the recent storms in Texas, unofficially referred to as Winter Storm Uri, NRG said that based on preliminary analysis, it expected "the financial impact of Winter Storm Uri to be within its current range."

The storms hit Texas hard last month, with at least 50 deaths attributed to bitter cold temperatures. Roughly 80 people across 11 states died due to weather-related issues, and over a half-million Texans are still under boil-water notices, CNN reported Monday.

Perryman Group, the Waco, Texas, economic-research firm, forecast that Winter Storm Uri could end up costing a total of $195 billion on the low end and as much as $295 billion.

Unlike a hurricane or tornado, the firm said, "the damage and business interruption has touched every corner of the state."

"During February 2021, Texas experienced unprecedented cold temperatures for a prolonged duration, resulting in a power emergency, blackouts, and an estimated all-time peak demand of 77 gigawatts (without load shed)," NRG said in a statement. 

Load shedding is the effort to reduce or halt power delivery to certain customers when demand strains or threatens to collapse a power-delivery system.

"The company maximized available generating capacity and brought in additional resources to supplement in-state staff with technical and operating experts from the rest of its U.S. fleet."

Mauricio Gutierrez, NRG president and chief executive, said the company's  integrated platform "performed well in 2020 and continues to perform through unprecedented conditions, further validating our business model."