Vistra's Q3 Financials Show Decline, Misses Estimates, But Optimistic About Robust 2025 Earnings Outlook

Vistra Corp VST reported a third-quarter FY23 operating revenue decline of 20.6% year-over-year to $4.09 billion, missing the estimate of $4.78 million.

Net income from ongoing operations stood at $519 million versus $662 million a year ago.

Adjusted EBITDA from ongoing operations of $1.61 billion came higher than $1.04 billion a year ago, led by higher energy margins achieved through strong operating results and a comprehensive hedging strategy.

As of Sept. 30, 2023, Vistra hedged ~90% of its expected generation volumes on average for the balance of 2023 through 2025, with the balance of 2023 hedged at ~99% and 2024 hedged at ~97%.

At the end of the quarter, Vistra's total available liquidity stood at ~$4.42 billion, including cash and cash equivalents of $3.17 billion.

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Buyback: Vistra has ~$1 billion remaining under its $4.25 billion share repurchase authorization, which is expected to be fully utilized by FY24.

"We remain focused on advancing our four strategic priorities of producing strong, stable earnings through our integrated business, returning capital to our shareholders, maintaining our balance sheet strength, and supporting the clean-energy transition with, among other projects, the transformative acquisition of Energy Harbor we are targeting and working to close in the fourth quarter," said Jim Burke, president and CEO of Vistra.

FY23 Outlook, Updated: Vistra anticipates FY23 adjusted EBITDA of $3.95 billion-$4.1 billion (prior $3.6 billion-$4 billion) and sees Ongoing Operations Adjusted FCFbG of $2.35 billion-$2.5 billion.

Initiates FY24 Guidance: Vistra expects Ongoing Operations Adjusted EBITDA of $3.7 billion-$4.1 billion and Ongoing Operations Adjusted FCFbG of $1.9 billion-$2.3 billion.

The company believed its hedging program and forward price curves as of Nov. 2, 2023, support its initiated 2024 guidance ranges and further provided confidence that it had increased its earning potential to the previously announced Ongoing Operations Adjusted EBITDA midpoint opportunity for 2025. 

Vistra is currently anticipating the 2025 midpoint opportunity to be in the range of $3.8 billion-$4 billion for Ongoing Operations Adjusted EBITDA (prior $3.7 billion to $3.8 billion)

VST Price Action: Vistra shares are trading lower by 2.01% at $34.64 on the last check Tuesday.

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