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It has been about a month since the last earnings report for NextEra Energy, Inc. NEE. Shares have lost about 1.7% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is NEE due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
NextEra Energy Q1 Earnings Beat Estimates, 2018 View Intact
NextEra Energy, Inc. reported first-quarter 2018 adjusted earnings of $1.94 per share, beating the Zacks Consensus Estimate of $1.78 by 8.9%. Earnings were up 10.9% year over year.
The year-over-year growth in earnings was due to solid contribution from both Florida Power & Light Company and NextEra Energy Resources segments. The return was higher primarily due to new investments made at both segments.
On a GAAP basis, NextEra Energy recorded earnings of $9.32 per share, up from $3.37 a year ago. In addition to other one-time gain and loss, the variance between GAAP and adjusted earnings was primarily due to one-time NextEra Energy Partners’ investment gains.
In the first quarter, NextEra Energy’s operating revenues were $3,863 million, lagging the Zacks Consensus Estimate of $3,916 million by 1.3%. Reported revenues were down 2.7% year over year.
Florida Power & Light Company: Earnings came in at $1.02 per share, up 7.4% from the prior-year quarter. Revenues amounted to $2,620 million, up 3.7% from the prior-year quarter.
Continued investments to strengthen its operation not only increased reliability of services but also allowed it to efficiently serve its expanding customer base.
NextEra Energy Resources: Quarterly earnings came in at 81 cents per share, up from 76 cents in the year-ago quarter. Revenues amounted to $1,247 million, down 12.4% from the prior-year quarter.
Corporate and Other: Earnings in the reported quarter were 11 cents compared with 4 cents in the year-ago quarter.
Highlights of the Release
In the reported quarter, NextEra Energy’s total operating expenses were up 74.9% to $2,816 million.
Interest expenses in the quarter were $226 million, down 37.2% from the year-ago quarter.
In the reported quarter, Florida Power & Light Company’s total average customer count went up by 53,000 year over year.
NextEra Energy Resources expanded its backlog of renewable projects in excess of 1,000 MW in the first quarter of 2018, adding 667 MW of wind projects and 334 MW of solar projects.
NextEra Energy had cash and cash equivalents of $550 million as of Mar 31, 2018 compared with $1,714 million as of Dec 31, 2017.
Long-term debt as of Mar 31, 2018 was $28.1 billion, down from $31.4 billion as of Dec 31, 2017.
NextEra Energy’s cash flow from operating activities in the first quarter of 2018 was $1,290 million, compared with $1,258 million in the first quarter 2017.
NextEra Energy reiterated its adjusted earnings guidance to the range of $7.45-$7.95 for 2018. The company expects its earnings to witness a compound annual growth rate of 6-8% per year through 2021, off its 2018 earnings midpoint of $7.70.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.
NextEra Energy, Inc. Price and Consensus
NextEra Energy, Inc. Price and Consensus | NextEra Energy, Inc. Quote
At this time, NEE has a poor Growth Score of F, however its Momentum is doing a lot better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for momentum based on our styles scores.
NEE has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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