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NextEra Energy Partners' (NEP) Q4 Earnings: What's in Store?

Zacks Equity Research

NextEra Energy Partners, LP NEP is set to report fourth-quarter and 2018 results on Jan 25, before market opens. In the third quarter, the company reported a positive earnings surprise of 28.9%.

Let’s see how things are shaping up prior to the upcoming results.

Factors to Consider

Higher production and increasing usage of natural gas in North America has created opportunity for natural gas pipeline services. We expect strong natural gas demand will continue to boost performance of the partnership. NextEra Energy Partners expects adjusted EBITDA of $1-$1.15 billion for 2018 and cash available for distribution (CAFD) in the range of $360-$400 million.

The Florida City Gas acquisition, which was closed in July 2018, is expected to make positive impacts on the partnership’s fourth-quarter results. Organic growth, accretive acquisitions and focus on power generation from renewable assets are going to have positive impact on earnings.

The Zacks Consensus Estimate for fourth-quarter 2018 earnings per unit is pegged at 52 cents. The projected figure reflects year-over-year increase of 173.68%. However, the Zacks Consensus Estimate for fourth-quarter 2018 sales is pegged at $283.08 million, reflecting year-over-year decline of 43.70%.

Earnings Whispers

Our proven model does not conclusively show that NextEra Energy Partners is likely to beat earnings this quarter as it does not possess the key components. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. However, that is not the case here as you will see below.

NextEra Energy Partners, LP Price and EPS Surprise


NextEra Energy Partners, LP Price and EPS Surprise | NextEra Energy Partners, LP Quote


Zacks ESP: The company’s Earnings ESP is -19.57%.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: NextEra Energy Partners sports a Zacks Rank #1.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

Stocks to Consider

Here are some companies from the Oils-Energy sector that you may want to consider instead, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Warrior Met Coal Inc HCC has an Earnings ESP of +21.39%. The company sports a Zacks Rank #1 and is expected to report fourth-quarter 2018 earnings on Feb 21.

You can see the complete list of today’s Zacks #1 Rank stocks here.

CNX Resources Corporation CNX has an Earnings ESP of +5.26% and a Zacks Rank #2. The company is expected to release fourth-quarter 2018 results on Jan 31.

EnLink Midstream Partners, LP ENLK has an Earnings ESP of +10%. It carries a Zacks Rank #2 and is expected to report fourth-quarter 2018 earnings on Feb 19.

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