NRG Energy misses quarterly profit estimates as interest costs rise (updated)
UPDATE 1-NRG Energy misses quarterly profit estimates as interest costs rise Adds shares in paragraph 1, analyst comment in paragraph 3 and call details in paragraph 8
By Dharna Bafna
Aug 4 (Reuters) - Power producer NRG Energy NRG.N missed Wall Street estimates for second-quarter profit on Tuesday, weighed down by higher interest expense and costs related to assets acquired from LS Power, sending its shares down 10% in morning trading.
Higher-for-longer interest rates have put pressure on power companies by raising costs to construct, maintain and upgrade infrastructure such as electrical grids.
NRG's interest expense rose to $310 million in the quarter from $148 million a year earlier.
The company posted adjusted profit of $1.49 per share for the three months ended June 30, missing analysts' average estimate of $1.70 per share, according to data compiled by LSEG.
Melius Research analyst James West said the quarterly miss is unlikely to affect the stock's longer-term potential, citing opportunities for additional long-term contracts and cash flow growth.
The company's Texas unit posted an adjusted core profit of $381 million, down 25.6% from year earlier, due to higher supply costs and mild winter weather.
East segment adjusted EBITDA jumped nearly five-fold to $469 million, boosted by new generation assets, CPower and higher capacity prices, partly offset by Winter Storm Fern-related supply costs.
Total adjusted EBITDA came in at $1.21 billion, compared with $909 million a year ago.
NRG said it has agreed on key commercial terms with a global cloud and AI hyperscaler to build a 1.2-GW gas-fired power plant in Texas.
The project could expand to 2.4 GW and that it has multiple customers seeking gas turbines for other AI-driven projects, company says.
(Reporting by Dharna Bafna in Bengaluru; Editing by Tasim Zahid)
((Dharna.Bafna@thomsonreuters.com))