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Investing.com -- Endesa (BME:ELE) shares rose Wednesday after the Spanish power and gas company reported third-quarter earnings that beat expectations, lifted by lower financial expenses and a strong performance in its generation business.
Endesa posted earnings before interest, taxes, depreciation and amortization of €1.5 billion, up 3% from a year earlier and 1% to 4% above Jefferies and FactSet consensus estimates.
Net income totaled €0.67 billion, coming in 11% above Jefferies estimates and 14% above FactSet consensus. Jefferies said “the beat in net income is driven by lower financial expenses.”
By division, Endesa reported mixed results. “EBITDA showed strong growth in Conventional Generation (+31% YoY), partially offset by a weaker performance in Networks (-10% YoY), reflecting a tough comparison base due to last year’s re-liquidation effects,” the brokerage said.
The company’s Renewables business posted a 4% increase, while Customers declined 3.5% from the same period last year.
Endesa’s net debt stood at €10.3 billion, up €0.4 billion from the previous quarter, with a net debt-to-EBITDA ratio of 1.8x.
The company “remains on track to reach the top end of its FY25 guidance, with 9M25 net income already representing 86% of the full-year target,” Jefferies said.
Jefferies kept its “hold” rating on Endesa’s stock and a €25 price target, implying a 17% downside from Tuesday’s closing price of €30.17.
The analysts said they expect “the focus of the call to be on regulatory developments, particularly around the final draft of the remuneration framework and how it compares to their guidance.”
Endesa operates in electricity generation, distribution and supply across Spain and also participates in the natural gas sector. The company’s market capitalization was reported at €32 billion (about $37.2 billion).
Jefferies described the quarter’s outcome as “a small positive for the stock.” The analysts noted that while performance was uneven across segments, the company benefited from reduced financing costs and steady operational delivery in generation.