Why Is NRG Yield (CWEN) Down 0.4% Since Last Earnings Report?

A month has gone by since the last earnings report for NRG Yield (CWEN). Shares have lost about 0.4% 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 Yield 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 most recent earnings report in order to get a better handle on the important catalysts.

Clearway Energy Lags Q3 Earnings & Revenue Estimates

Clearway Energy Inc. reported third-quarter 2019 earnings of 36 cents per share, lagging the Zacks Consensus Estimate of 71 cents by 49.3%. However, the reported earnings increased 80% from the year-ago figure of 20 cents.

Total Revenues

The company's total revenues in third-quarter 2019 were $296 million, lagging the Zacks Consensus Estimate of $328 million by 9.8%. However, the top line was up 1.4% from the year-ago reported figure.

Highlights of the Release

Total operating expenses in the quarter amounted to $206 million, increasing 7.3% from the year-ago period.

Operating income in the reported quarter was $90 million, down 11.1% from the year-ago level.

Interest expenses amounted to $106 million, increasing 43.2% from the year-ago period.

Financial Position

Clearway Energy had cash and cash equivalents of $148 million as of Sep 30, 2019, down from $407 million on Dec 31, 2018.

Long-term debt as of Sep 30, 2019 was $4,143 million, reflecting a decline of 23.9% from $5,447 million on Dec 31, 2018.

The company's net cash flow from operating activities during the first nine months of 2019 was $374 million compared with $396 million in the comparable prior-year period.

Guidance

Clearway Energy maintained its full-year 2019 cash available for distribution (CAFD) guidance at $250 million. In addition, the company initiated its 2020 CAFD guidance of $295 million.

How Have Estimates Been Moving Since Then?

Estimates review followed an upward path over the past two months. The consensus estimate has shifted 240.91% due to these changes.

VGM Scores

At this time, NRG Yield has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

NRG Yield has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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