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Vistra beats fourth-quarter core profit estimates on AI-driven power demand

Vistra Corp, a power producer, beat Wall Street's expectations on Thursday for its fourth-quarter core profit?adjusted? as an?AI driven surge in electricity consumption from data centers?fueled earnings.

The U.S. is expected to?increase its power consumption?increase?increasingly this year and next year, due to the rapid expansion in data centers for artificial-intelligence services and cryptocurrency and the switch from gas and oil heating and transportation.

The big?tech companies are also looking for long-term contracts with electricity suppliers to power AI-driven services and data centres.

Meta Platforms has signed a 20-year contract to purchase power from Vistra's three nuclear plants located in the heartland of the U.S.

Vistra also announced in January a $4.7 Billion agreement to acquire Cogentrix Energy, and its 10 natural-gas-fired plants, from Quantum Capital Group, to increase capacity to meet growing energy needs.

In November, the power producer forecast a 2026 core adjusted profit that was higher than its 2025 outlook. This showed?confidence' in its expanding power generation portfolio as well as strong demand in all U.S. market segments.

As it expands its gas-fired energy and clean energy capacities, the company anticipates a core profit of between $6.8 and $7.6 Billion in 2026, up from a range of $5.7 to $5.9 Billion for 2025.

Vistra's?profit for the fourth quarter of $233 millions was down from $490 million one year earlier.

According to LSEG data, Irving, Texas, based company reported an adjusted core profit for the 'three months ended December '31 of $1.74 billion, which was above analysts’ average estimate of $1.6?billion.

The company's shares rose by 1.8% during premarket trading. (Reporting and editing by Diti Pjara in Bengaluru, Katha Kalia is based in Bengaluru)

(source: Reuters)