NRG Energy (NRG) entered a definitive agreement to sell six natural-gas-fired generation assets totaling 4.9 GW to LS Power for $4 billion in cash, subject to working-capital and other closing adjustments, as it reported a sharp rebound in third-quarter adjusted earnings and initiated 2027 guidance.

The sale, announced November 9, is expected to close in the second quarter of 2027, subject to customary conditions and Hart-Scott-Rodino, FERC and New York State Public Service Commission approvals. NRG said the transaction retains the entire PJM portfolio and CPower it acquired from LS Power in January 2026.

For the three months ended September 30, 2026, the electricity, natural gas and smart-home provider reported Adjusted EBITDA of $2,013 million, up from $1,217 million in the second quarter. Adjusted Net Income was $983 million and Adjusted EPS was $4.68, compared with $315 million and $1.49 in the prior quarter. GAAP Net Income was $561 million, or $2.59 a share, versus $506 million, or $2.32 a share, in the second quarter. Revenue was $9,466 million.

The company said the year-over-year GAAP increase of $409 million was driven primarily by the LS Power portfolio, higher realized capacity prices in the East and higher Texas margins, including favorable weather, partially offset by higher depreciation, amortization and interest on the acquired assets and related financing, and by unrealized non-cash losses on economic hedges tied to lower natural gas prices. Adjusted Net Income rose $446 million from a year earlier, which NRG attributed primarily to an $808 million increase in Adjusted EBITDA, partly offset by higher interest and depreciation on the LS Power assets.

Texas Adjusted EBITDA was $1,018 million, $211 million higher than a year earlier, which the company said was driven primarily by increased retail margins and favorable weather in the third quarter. East Adjusted EBITDA was $614 million, $507 million higher than a year earlier, driven primarily by the new generation assets and CPower and higher capacity prices for owned generation, partially offset by higher power supply costs during Winter Storm Fern and lower natural gas margins. West/Other Adjusted EBITDA was $64 million. Vivint Smart Home Adjusted EBITDA was $317 million, which NRG attributed to higher new customer adds and an increase in monthly recurring service margin per customer.

GAAP cash provided by operating activities was $1,097 million in the third quarter. Free Cash Flow before Growth Investments was $1,242 million.

NRG reaffirmed 2026 guidance of Adjusted Net Income of $1,685 million to $2,115 million, Adjusted EPS of $7.90 to $9.90, Adjusted EBITDA of $5,325 million to $5,825 million and FCFbG of $2,800 million to $3,300 million. It does not guide to GAAP Net Income because of derivative fair-value adjustments.

The company initiated 2027 guidance of Adjusted Net Income of $1,665 million to $2,075 million, Adjusted EPS of $8.05 to $10.05, Adjusted EBITDA of $5,500 million to $6,000 million and FCFbG of $2,900 million to $3,400 million. That 2027 outlook does not reflect the expected impacts of the announced 4.9 GW asset sale.

The 2027 base capital allocation plan includes $1 billion of debt reduction, $1 billion of share repurchases and an 8% increase in the annual common dividend to $2.05 a share, consistent with a 7–9% long-term dividend growth target. Expected proceeds from the asset sale will support a 2027 pro forma plan of $3 billion of share repurchases across 2026 and 2027, including an incremental $1 billion expected to begin before the end of the fourth quarter of 2026. Upon closing, NRG plans an additional $2 billion of debt reduction, bringing total planned 2027 debt reduction to $3 billion. The remaining $1 billion of expected proceeds would provide flexibility for contracted growth investments or additional debt reduction. The company expects to provide updated 2027 guidance and an updated capital allocation plan after the sale closes.

Through October 31, 2026, NRG had completed $977 million in share repurchases and distributed $302 million in common stock dividends under its 2026 plan, which calls for $1.0 billion of repurchases and about $407 million of dividends. On October 19 it declared a quarterly dividend of $0.475 a share, or $1.90 annualized, payable November 16.

Total liquidity was $6.0 billion as of September 30, 2026, $3.6 billion lower than December 31, 2025, which the company said was driven primarily by funding of the LS Power acquisition. Unrestricted cash was about $0.1 billion and $5.9 billion was available under credit facilities. The previously disclosed 1.2 GW Bring Your Own Power data-center project remains on track.