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What's in Store for NextEra Energy (NEE) in Q1 Earnings?

Zacks Equity Research

NextEra Energy, Inc. NEE will release first-quarter 2017 financial results before the market opens on Apr 21. Last quarter, this utility company reported a negative earnings surprise of 6.20%. Let’s see how things are shaping up prior to this announcement.

Factors to Consider

During Dec 2016, the company received final approval from Florida Public Service Commission (FPSC) to increase electric rate effective Jan 1, 2017. The annualized increase in revenue will be $400 million, which will definitely have a positive impact on first-quarter earnings.

In the first quarter, the company completed the sale of its fiber-optic telecommunications business, FPL FiberNet. A part of the sale proceeds were utilized to repay a portion of its long-term debt. Sale proceeds of nearly $700 million (after tax adjustment) will be added to NextEra Energy’s first-quarter results.

We believe the warmer winter weather in Florida is likely to have an adverse impact on demand for the utility services in first-quarter 2017.

NextEra Energy, Inc. Price and EPS Surprise

 

NextEra Energy, Inc. Price and EPS Surprise | NextEra Energy, Inc. Quote

 

Earnings Whispers

Our proven model does not conclusively show that NextEra Energy is likely to beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here, as you will see below.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks ESP: The Most Accurate estimate is pegged at $1.50 while the Zacks Consensus Estimate is pegged at $1.56 resulting in an Earnings ESP of -3.85%.  

Zacks Rank: NextEra Energy carries a Zacks Rank #3. Though the Zacks Rank #3 increases the possibility of a beat, an ESP of -3.85% makes it unlikely this season.

We caution against Sell-rated stocks (#4 or #5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Instead, here are a few players in the utility sector that have the right combination of elements to post an earnings beat this quarter.

Dominion Resources Inc. D has an earnings ESP of +3.23% and a Zacks Rank #3. It is expected to report first-quarter 2017 earnings on May 4.

Pacific Gas & Electric Co. PCG has an earnings ESP of +7.32% and a Zacks Rank #3. It is expected to report first-quarter 2017 earnings on May 2.

CenterPoint Energy, Inc. CNP is expected to report first-quarter 2017 earnings on May 5. It has an earnings ESP of +2.70% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

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CenterPoint Energy, Inc. (CNP): Free Stock Analysis Report
 
NextEra Energy, Inc. (NEE): Free Stock Analysis Report
 
Pacific Gas & Electric Co. (PCG): Free Stock Analysis Report
 
Dominion Resources, Inc. (D): Free Stock Analysis Report
 
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