NRG Yield (CWEN) Down 11.4% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for NRG Yield (CWEN). Shares have lost about 11.4% in that time frame, outperforming 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 its most recent earnings report in order to get a better handle on the important catalysts.

Clearway Energy Lags Q4 Earnings Estimates, Ups View

Clearway Energy Inc. reported fourth-quarter 2019 loss of 6 cents per share against the Zacks Consensus Estimate of earnings of 39 cents.

Total Revenues

The company's total revenues in 2019 were $1,032 million, declining 2% from the year-ago reported figure.

Highlights of the Release

On Dec 6, 2019, it closed the acquisition of the 527-MW Carlsbad Energy Center (Carlsbad) from Global Infrastructure Partners III (GIP) for a purchase price of $184 million plus the assumption of non-recourse debt of $803 million. This acquisition is expected to contribute asset CAFD on a five-year average annual basis of nearly $27 million beginning Jan 1, 2020.

During the quarter, the company raised $700 million of new corporate level capital to support growth investments and optimize the balance sheet.

Total operating expenses in 2019 amounted to $808 million, increasing 14.5% from the year-ago period.

Operating income in 2019 was $224 million, down 35.4% from the year-ago level.

Interest expenses in the full year amounted to $404 million, increasing 32% from the year-ago period.

Financial Position

Clearway Energy had cash and cash equivalents of $155 million as of Dec 31, 2019, down from $407 million in the comparable period of 2018.

Long-term debt as of Dec 31, 2019 was $4,956 million, reflecting a decline of 9% from $5,447 million in the corresponding period of 2018.

The company's net cash flow from operating activities during 2019 was $477 million compared with $498 million in the comparable prior-year period.

Guidance

Courtesy of the acquisition of Carlsbad Energy Center in December 2019, it upwardly revised its 2020 cash available for distribution (CAFD) guidance. Clearway Energy expects 2020 CAFD to be $310 million, up from prior expectation of $295 million.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions. The consensus estimate has shifted -74.51% due to these changes.

VGM Scores

Currently, NRG Yield has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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.

Outlook

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