RWE earnings beat estimates as strong energy trading lifts outlook

RWE AG (BIT:RWE) has reported robust third-quarter earnings, driven by a significant recovery in its energy trading business and enhanced wind generation, leading the German utility to anticipate full-year results near the upper range of its guidance. Adjusted EBITDA for Q3 reached 13% higher at €1.56 billion, surpassing both company consensus by 10% and Jefferies estimates by 5%.

Net income grew 19% to €589 million, exceeding estimates by 30% and 23%. Supply & Trading emerged as the primary driver of the earnings boost, delivering adjusted EBITDA of €409 million, a staggering 205% increase year-over-year and 82% above consensus. However, Offshore Wind and Onshore Wind/Solar fell short of expectations, while Flexible Generation slightly surpassed them.

For the first nine months, adjusted EBITDA expanded 35% to €4.58 billion, outpacing the analyst consensus of €4.43 billion. Adjusted net income also rose to €1.8 billion from €1.3 billion, and earnings per share increased 42% to €2.52. Favorable wind conditions across Europe, additional generation capacity, and heightened margins in flexible generation contributed to RWE's strong performance.

Jefferies rated the quarter positively, retaining its Buy rating and €75 price target, which represents a 29% upside from the current share price. They anticipate full-year earnings at the higher end of RWE's guidance and expect Supply & Trading EBITDA to surpass its target range, currently set between €100 million and €500 million.

RWE has maintained its full-year adjusted EBITDA guidance between €5.75 billion and €6.35 billion and adjusted net income target between €1.95 billion and €2.45 billion, but expects results to be near the higher end of both ranges.