Latest news with #TalenEnergy
Globe and Mail
5 days ago
- Business
- Globe and Mail
Talen Energy (TLN) Q2 Revenue Jumps 61%
Key Points GAAP revenue of $630 million beat expectations by 60.7% in Q2 2025. Adjusted EBITDA edged up despite higher maintenance costs from a lengthy Susquehanna nuclear outage in Q2 2025. Adjusted Free Cash Flow swung negative to $(78) million in Q2 2025, reflecting higher capital and tax spending. These 10 stocks could mint the next wave of millionaires › Talen Energy (NASDAQ:TLN), a power producer active in the PJM electricity market, released its second quarter results on August 7, 2025. The standout news was a notable revenue beat: GAAP revenue was $630 million in Q2 2025, sharply ahead of the $392 million analyst estimate. Despite the revenue surprise, GAAP net income attributable to stockholders was $72 million in Q2 2025, down from $454 million in Q2 2024, which benefited from a large one-time asset sale. Adjusted EBITDA, a non-GAAP measure of operational profitability, increased to $90 million in Q2 2025, up from $87 million in Q2 2024, a 3.4% improvement. However, the period was marked by heavy cash outflows from a protracted nuclear refueling outage. Adjusted Free Cash Flow (non-GAAP) dropped into negative territory in Q2 2025 due to increased capital spending and tax payments. While management maintained full-year 2025 guidance, the quarter highlighted both growth opportunities and short-term operational challenges. Metric Q2 2025 Q2 2025 Estimate Q2 2024 Y/Y Change EPS – Diluted (GAAP) $1.50 $(1.04) $7.60 (80.3%) Operating Revenues (GAAP) $630 million $392.0 million $489 million 28.8% Net Income Attributable to Stockholders (GAAP) $72 million $454 million (84.1%) Adjusted EBITDA $90 million $87 million 3.4% Adjusted Free Cash Flow $(78) million $(29) million (169.0%) Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report. Company Overview and Success Drivers Talen Energy is a major independent power producer with a core focus on the PJM market in the U.S. Northeast and Mid-Atlantic regions. The company owns a diverse fleet of energy assets, primarily nuclear and natural gas generation. Its Susquehanna plant in Pennsylvania forms the backbone of its zero-carbon generation, while combined-cycle gas plants supply flexible energy to meet market needs. Recently, Talen has sharpened its efforts on two fronts: expanding its business in digital infrastructure through a strategic relationship with Amazon Web Services (AWS), and investing in nuclear efficiency and reliability. Its success hinges on executing complex nuclear maintenance, building contracted revenue streams, efficiently deploying capital, and navigating a fast-changing regulatory environment. Balancing capital outlays, maintaining safe operations, and seizing growth in power demand are all central to its strategy. Key Quarter Developments and Performance Drivers A major event this quarter was the extended refueling and maintenance outage at the Susquehanna nuclear plant. The outage aimed to recover 27 megawatts through condenser improvements and included additional system maintenance, which management expects will provide a payback in approximately 1.5 years at current power prices. As a result of the outage, nuclear output fell, with carbon-free nuclear accounting for 41% of total generation in Q2 2025, down from 49% in Q2 2024. Total generation in Q2 2025 was 7.3 terawatt hours, compared to 8.2 terawatt hours in Q2 2024. Despite reduced nuclear output, the company posted a modest increase in Adjusted EBITDA in Q2 2025, thanks to higher capacity revenues. GAAP capacity revenues jumped to $88 million in Q2 2025, up from $46 million in Q2 2024. This uptick reflects greater earnings from readiness and reliability contracts, including new commitments in Maryland and strong results in the PJM capacity market. Operating expenses increased due to maintenance and operational activities during the Susquehanna outage, depressing net profits and cash flow in Q2 2025. The OSHA Total Recordable Incident Rate (TRIR), a worker safety measure, rose to 0.7 in Q2 2025, compared to 0.2 in Q2 2024, while Fleet Equivalent Forced Outage Factor (EFOF) remained stable at 2.3% in Q2 2025. The digital infrastructure segment saw further expansion of Talen's power purchase agreement (PPA) with AWS in June 2025. The partnership now covers up to 1,920 megawatts of "front-of-the-meter" power through 2042, with plans for full delivery by 2032, according to the expanded PPA announced in June 2025. The company also entered into agreements on July 17, 2025, to acquire two combined-cycle gas plants, Freedom Energy Center and Guernsey Power Station, for $3.8 billion. These plants are designed to serve regional capacity needs and support Talen's push into large-scale, contracted energy supply for data centers and other customers. Talen's capital strategy maintained a focus on liquidity and balance sheet strength, ending the quarter with $861 million in available liquidity, including $161 million in unrestricted cash as of August 4, 2025. However, the pending acquisitions will increase leverage. Management targets a ratio of net debt to Adjusted EBITDA (non-GAAP) below 3.5 times by year-end 2026, up from the current 2.7 times Adjusted EBITDA (non-GAAP, midpoint basis) as of August 4, 2025. The company continued to execute share buybacks in recent quarters, shrinking its outstanding shares year on year, and maintains an ongoing program to return 70% of adjusted free cash flow to shareholders when available, as stated in management commentary and filings. Talen does not currently pay a dividend. Looking Ahead: Outlook and Investor Focus Management reaffirmed its full-year 2025 guidance, projecting Adjusted EBITDA between $975 million and $1,125 million and Adjusted Free Cash Flow of $450 million to $540 million. The outlook for 2026 and beyond will be revisited at its September Investor Day. Investors will likely watch for updates on integration of the new gas plants, operational improvements at Susquehanna, and progress navigating regulatory and legal actions affecting grid access and power contracts. Short-term results will be sensitive to power prices, outage management, and the realization of planned operational upgrades. Hedging remains robust, with approximately 100% of 2025 generation volume hedged, 66% of 2026 hedged, and 33% of 2027 hedged as of June 30, 2025, supporting near-term cash flow consistency. Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted. Where to invest $1,000 right now When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor's total average return is 1,026%* — a market-crushing outperformance compared to 180% for the S&P 500. They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor. See the stocks » *Stock Advisor returns as of August 4, 2025
Reuters
5 days ago
- Business
- Reuters
Talen Energy quarterly profit falls on higher expenses, Susquehanna outage
Aug 7 (Reuters) - Utility Talen Energy (TLN.O), opens new tab reported a fall in second-quarter profit on Thursday, hurt by higher energy purchase costs and maintenance expenses associated with a refueling outage at its Susquehanna nuclear facility. In May, the utility identified extra maintenance work in Unit 2 of the Susquehanna facility that had already been placed under a planned outage in March. The company said it paid a total of $252 million for energy expenses during the second quarter, compared with $176 million a year ago. Its operation, maintenance and development expenses rose 17% to $192 million. In June, Talen Energy expanded a nuclear energy partnership with (AMZN.O), opens new tab to supply up to 1,920 megawatts of electricity from its Susquehanna plant in Pennsylvania to Amazon Web Services (AWS) data centers. The company said last month it was also acquiring two power plants in Pennsylvania and Ohio for a net $3.5 billion, and expects the purchase to boost free cash flow per share by more than 40% in 2026. Talen owns and operates about 10.7 gigawatts of power infrastructure in the United States. It produces and sells electricity, capacity, and ancillary services into wholesale U.S. power markets. Its quarterly operating revenue came in at $630 million for the quarter ended June 30, compared with $489 million a year earlier. Analysts, on average, expected revenue of $434.5 million, according to data compiled by LSEG. The company reaffirmed its 2025 adjusted core profit forecast of between $975 million and $1.13 billion. The Houston-Texas based company's net income fell to $72 million, or $1.50 per share, for the quarter ended June 30, from $454 million, or $7.60 per share, a year ago.
Bloomberg
6 days ago
- Business
- Bloomberg
NRG Falls 16% For Worst Drop Since 2022 on Data-Center Let Down
NRG Energy Inc. plunged 16% after the power producer's first deal to supply electricity to data underwhelmed investors. The company announced 295 megawatts in data-center power supply contracts on Wednesday. The agreements paled in size and scope to recent deal announcements by rivals such as Constellation Energy Corp. and Talen Energy Corp.
Reuters
22-07-2025
- Business
- Reuters
Biggest US power grid auction prices rise by 22% to new heights
July 22 (Reuters) - Prices out of the biggest U.S. power auction, held by grid operator PJM Interconnection, cleared at $329.17 a megawatt-day, roughly 22% higher than last year's record-high levels as electricity demand continues to outstrip supply, according to results released by the organization on Tuesday. A recent surge in U.S. power consumption driven by Big Tech's data center demand has butted up against roughly a decade of shrinking power supplies in PJM, North America's largest power grid operator, leading to a supply shortfall that has driven up prices in the capacity auction. PJM's capacity auction determines what power plant owners in the grid network, which covers one in five Americans, will be paid to guarantee that they pump out electricity during times of extreme demand to help avoid blackouts. Shares of major power-producing companies that receive capacity payments rose on the auction results. Talen Energy shares were up over 9%, Constellation Energy shares rose over 5%, and NRG Energy (NRG.N), opens new tab climbed over 6% in trading after the bell. The payments are a sign of the energy supply and demand balance in PJM, with higher prices typically acting as an incentive for developers to build more power plants. PJM's territory covers 13 states and the District of Columbia, as well as the biggest concentration of data centers in the world, including Virginia's "Data Center Alley." The latest auction, which covers the year beginning next summer, is showing signs of a continued supply crunch. PJM attracted 2,669 megawatts of additional power supplies, which will be added through upgrading existing power plants and adding new ones, marking the first time in the last four auctions that new generation was added. The additions, however, represent only about half the amount of new power demand PJM expects to see over the period the auction covers. While prices overall increased from last year, two zones within PJM - covered by Baltimore Gas and Electric Company and Dominion Energy (D.N), opens new tab - saw price decreases. "Rapid electricity demand growth continues to outpace the rate of new generation," Evercore ISI analyst Nicholas Amicucci said in a note of the higher prices. Year-ago auction prices shot up by more than 800%, rising to $269.92 per megawatt-day from the previous year as data center demand crept up. Prices from that auction began to take effect last month, while the most recent results will impact bills beginning next summer. Those high payment prices, which are ultimately paid for by the public, drew a backlash from state consumer advocates, politicians and environmental groups, leading to several changes at PJM. PJM says it expects power bills for homes and businesses will rise only 1.5% to 5% year-over-year as a result of the latest auction results. Prices in BGE and Dominion may decline, it said. The types of power-generating capacity cleared through the auction included 45% natural gas, 21% nuclear, 22% coal, 4% hydro, 3% wind and 1% solar. Environmental groups, which successfully sued over the last PJM capacity results, said PJM has failed to quickly connect new carbon-free renewable power like wind and solar. 'PJM has failed our communities through its refusal to adopt substantive reforms, completely at odds with its mission of providing reliable energy at the lowest cost to its customers,' said Jessi Eidbo, Sierra Club senior adviser. PJM said it has approved the connection of 46,000 MW of power plants, many of them solar, but those projects have not yet been built for reasons outside the grid operator's control.
Reuters
22-07-2025
- Business
- Reuters
Prices jump 22% in biggest US power grid energy auction
July 22 (Reuters) - Prices out of an annual energy auction held by PJM Interconnection, the largest grid operator in the U.S., cleared at $329.17 a megawatt-day, 22% higher than last year's record-high levels, according to results released by the organization on Tuesday. A recent surge in U.S. power consumption driven by Big Tech's data center demand has butted up against roughly a decade of shrinking power supplies in PJM, leading to a supply shortfall that has driven prices in the capacity auction to new heights. PJM's so-called capacity auction determines what power plant owners in the grid network that covers one in five Americans will be paid to guarantee that they pump out electricity during times of extreme demand, which typically happen on the hottest or coldest days of the year. Shares of major power-producing companies in PJM rose on the auction result news. Talen Energy shares up over 9%, Constellation Energy up over 5% and NRG Energy up over 6% in trading after the bell. The payments are a sign of the energy supply and demand balance on the grid, which spans 13 states and the District of Columbia, with higher prices typically acting as an incentive for developers to build more power plants. PJM's territory covers the biggest concentration of the world's energy-intensive data centers in Northern Virginia's "Data Center Alley" and other fledgling hubs that require massive amounts of electricity faster than power plants are connecting to the grid. Year-ago auction prices shot up by more than ninefold, rising to $269.92 per megawatt-day from the previous year as data center demand crept up. Those high payment prices, which are ultimately paid for by the public, drew a backlash from state consumer advocates, politicians and environmental groups, leading to several changes at PJM. The capacity cleared through the auction was 45% natural gas-fired power, 21% nuclear, 22% coal, 4% hydro, 3% wind and 1% solar.
