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NextEra Energy Is Off to a High-Powered Start in 2019

Matthew DiLallo, The Motley Fool

NextEra Energy's (NYSE: NEE) efforts to build itself into one of the cleanest utilities in the world continue to pay dividends. The electric company generated double-digit percentage earnings growth in the first quarter, thanks to solid results across all its business units, and it was highly successful in securing innovative new projects

NextEra Energy Q1 results: The raw numbers

Metric

Q1 2019

Q1 2018

Year-Over-Year Change

Adjusted earnings

$1.06 billion

$929 million

14.1%

Adjusted earnings per share

$2.20

$1.96

12.2%

Data source: NextEra Energy.

What happened this quarter? 

The utility delivered excellent results across all segments:

  • NextEra Energy's Florida Power & Light (FPL) subsidiary generated $588 million, or $1.22 per share, of net income during Q1, up 21.5% year over year. Propelling that strong growth were continued investments in the business, as well as the addition of 100,000 new customers, bringing the total to more than 5 million.
  • Gulf Power Company, which NextEra acquired last year, contributed $37 million, or $0.08 per share, in net income. Integration of the business is off to a solid start as base retail operation and maintenance costs were down nearly 5% year over year. It should provide a meaningful boost to earnings in 2020 and 2021. 
  • The energy resources segment generated $448 million, or $0.93 per share, of adjusted earnings, an increase of 13.4% compared to the year-ago period. Driving that growth was a combination of new investments and strong results in the gas infrastructure and customer supply and trading segments.
Solar panels under a blue sky at sunset.

Image source: Getty Images.

What management had to say 

CEO Jim Robo was upbeat about the company's results and strategic progress:

NextEra Energy delivered strong first-quarter results and is well-positioned to meet our overall objectives for the year. We grew adjusted earnings per share by approximately 12% year-over-year, reflecting excellent performance across our businesses. During the quarter, FPL successfully brought online the Okeechobee Clean Energy Center, which is among the cleanest, most fuel-efficient power plants of its kind in the world, on budget and ahead of schedule, and continued to execute one of the largest-ever solar expansions. The Gulf Power integration continues to advance well, and I am confident in our ability to execute our plan for the benefit of customers and shareholders. NextEra Energy Resources continues to capitalize on the best two renewables development periods in our history with the addition of nearly 1,000 megawatts to its contracted renewables backlog.

Looking forward 

Robo also commented about what lies ahead:

Combined with the strength of our balance sheet and credit ratings, we continue to believe NextEra Energy is uniquely positioned to drive long-term shareholder value and remain as enthusiastic as ever about our future prospects. I will be disappointed if we are not able to deliver financial results at or near the top end of our 6% to 8% adjusted earnings per share compound annual growth rate range through 2021, off the 2018 base of $7.70 per share, plus the expected deal accretion from the Florida transactions.

Based on that, NextEra Energy is on track to deliver adjusted earnings on the higher end of its 2019 guidance range of $8.00 to $8.50 per share.

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Matthew DiLallo owns shares of NextEra Energy. The Motley Fool recommends NextEra Energy. The Motley Fool has a disclosure policy.