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Vistra's quarterly profit falls due to higher interest and operating costs

Vistra Corp's shares fell about 6% before the market opened on Thursday after it reported a decline in its second-quarter profits, due to higher operating and interest expenses.

The continued rise in interest rates over time can be a burden on utilities, as it increases the cost of investing in critical infrastructure like electrical grids.

Interest costs for the company increased by 25.7%, to $303 millions in the quarter reported. Total operating expenses grew by about 17%, to $733million.

The company's core adjusted profit for ongoing operations fell to $1.35bn from $1.41bn a year ago, due to plant outages.

Vistra purchased seven natural gas-fired generation facilities with a combined power of 2,600 megawatts in May for $1.9 billion. In July, the U.S. Nuclear regulator approved the extension of operations at the Perry Power Plant through 2046.

According to the U.S. Energy Information Administration, electricity consumption will reach new highs in the United States in 2025 and in 2026. This is due to the surge in demand for data centers that are trying to meet Big Tech's AI goals.

Vistra confirmed that the current year adjusted core profit for continuing operations would be between $5.5 and $6.1 billion. This is compared to analysts' estimates of $5.9billion.

Irving, Texas, company reported a net profit of $327 million for the three-month period ended June 30 compared to $467 million a year earlier. (Reporting from Sumit Saha, Bengaluru. Editing by Shailesh Kuber)

(source: Reuters)