Engie stock down after Q2 earnings miss on weak hydro, retail timing effects

Investing.com -- Engie (EPA:ENGIE)shares dropped more than 4% Friday after the electric utility company missed second-quarter earnings estimates, dragged down by weaker hydroelectric output and negative retail timing effects.

EBIT excluding nuclear fell to €1.4 billion, 24% below Jefferies’ forecast and down 28% year-over-year. 

“A negative print, but we continue to see a constructive earnings story for Engie in the balance of 2025, considering the reiterated guidance which we see as inline with our estimates,” said analysts at Jefferies in a note. 

Total (EPA:TTEF) EBIT declined 34% from a year earlier to €1.5 billion, falling 23% short of Jefferies estimates and 9% under the consensus compiled by FactSet.

The Supply & Energy Management division posted the steepest shortfall. EBIT dropped 66% year-over-year to €245 million, 51% below Jefferies’ estimate. 

Within the segment, B2C operations recorded a €128 million loss versus a forecasted €55 million gain, due to timing effects occurring earlier than expected. 

GEMS underperformed as well, with EBIT at €372 million, missing the €448 million estimate due to a one-off charge and reduced activity.

Renewables & Flex (NASDAQ:FLEX) Power EBIT fell 11% year-over-year to €836 million, missing Jefferies’ projection by 8%. 

Renewables and BESS contributed €580 million, 24% below expectations. Gas generation offset some of the decline, beating estimates by 81% with EBIT of €257 million.

In the Infrastructures segment, EBIT rose to €506 million, up 25% from the prior year but 3% below forecast. 

Networks outperformed with EBIT of €463 million, up 28% and 14% above estimate, while Local Energy Infrastructures met last year’s level at €42 million, but missed expectations by 64%.

Nuclear EBIT came in at €97 million, in line with the €100 million estimate. Net recurring income group share for the first half of 2025 totaled €3.1 billion.

Economic net debt increased to €46.8 billion from €46.1 billion at the end of 2024. The leverage ratio stood at 3.1x, implying roughly 1x headroom on a net debt-to-EBITDA basis.

Despite the quarterly miss, Engie reaffirmed its full-year 2025 guidance. The company maintained its EBIT ex-nuclear target of €8-9 billion and net recurring income group share guidance of €4.4-5 billion. 

Updated assumptions include a EUR/USD rate of 1.14 and commodity prices as of June 30. 

The forecast for recurring net financial costs was narrowed to a range of negative €2 billion to €2.2 billion, from a previous range of negative €2.1 billion to €2.3 billion.