NEW YORK (TheStreet) -- NRG Energy (NRG - Get Report) stock is falling 17.55% to $9.05 on heavy volume in afternoon trading on Friday after CEO David Crane stepped down yesterday and as oil prices are lower today.
Crane will be succeeded by Mauricio Gutierrez, who has served as COO since 2010.
Investors had become increasingly unhappy with Crane's renewable energy push and the stock's sharp decline. Shares are down about 68% year-to-date.
A billion-dollar renewable energy investment did not create the profits that Crane had hoped it would, the Wall Street Journal reported.
Additionally, on Tuesday, NRG Energy noted that it would sell two of its generating plants for a total of $138 million, noting that their costs would have outweighed their benefit to earnings.
Also dragging down the stock today, oil prices are declining as the OPEC plans to keep production near record highs.
Crude oil (WTI) is down 2.58% to $40.02 per barrel and Brent oil is down 1.35% to $43.23 per barrel, according to the CNBC.com index.
Based in Princeton, NJ, NRG Energy is a power company that produces, sells and delivers energy, and energy products and services in power markets in the U.S.
About 14.74 million shares of the company have been traded so far today, well above the average trading volume of roughly 7.75 million shares.
Separately, TheStreet Ratings team rates NRG ENERGY INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate NRG ENERGY INC (NRG) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and a generally disappointing performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has increased to $934.00 million or 25.53% when compared to the same quarter last year. In addition, NRG ENERGY INC has also vastly surpassed the industry average cash flow growth rate of -37.17%.
- NRG ENERGY INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NRG ENERGY INC turned its bottom line around by earning $0.21 versus -$1.22 in the prior year. This year, the market expects an improvement in earnings ($0.38 versus $0.21).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 7.3%. Since the same quarter one year prior, revenues slightly dropped by 3.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Independent Power Producers & Energy Traders industry. The net income has significantly decreased by 60.7% when compared to the same quarter one year ago, falling from $168.00 million to $66.00 million.
- The gross profit margin for NRG ENERGY INC is rather low; currently it is at 17.24%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.48% trails that of the industry average.
- You can view the full analysis from the report here: NRG