NextEra's (NEE) Q2 Earnings and Revenues Surpass Estimates
NextEra Energy, Inc. NEE reported second-quarter 2019 adjusted earnings of $2.35 per share, beating the Zacks Consensus Estimate of $2.28 by 3.1%. Moreover, the reported earnings were up 12.9% on a year-over-year basis.
The earnings growth was attributed to solid contribution from all business segments.
On a GAAP basis, NextEra recorded earnings of $2.56 per share, up 59% from $1.61 reported in the year-ago quarter.
Total Revenues
In the second quarter, NextEra’s operating revenues were $4,970 million, surpassing the Zacks Consensus Estimate of $4,761 million by 4.4%. In addition, the reported revenues were up 22.3% year over year.
NextEra Energy, Inc. Price, Consensus and EPS Surprise
NextEra Energy, Inc. price-consensus-eps-surprise-chart | NextEra Energy, Inc. Quote
Segmental Results
Florida Power & Light Company: Revenues from the segment amounted to $3,158 million, up 8.6% from the prior-year figure of $2,908 million. The segment’s earnings came in at $1.37 per share, up 3.8% from $1.32 recorded in the prior-year quarter.
Gulf Power Company: Total segment revenues amounted to $366 million. NextEra acquired a rate-regulated electric utility during the quarter. This buyout contributed 12 cents to its earnings in the reported quarter.
NextEra Energy Resources: Revenues from the segment amounted to $1,437 million, up 24.3% from the prior-year quarter. Quarterly earnings from the segment came in at 93 cents per share, up 12% from 83 cents in the year-ago quarter.
Corporate and Other: The segment’s operating loss in the reported quarter was 7 cents versus earnings of 10 cents in the year-ago period.
Highlights of the Release
In the reported quarter, NextEra’s total operating expenses were up 10.5% from the prior-year level to $3,223 million.
Interest expenses in the quarter were $601 million, up 52.5% from the year-ago period.
In the reported quarter, Florida Power & Light Company’s total average customer count was up by 100,000 on a year-over-year basis.
NextEra Energy Resources expanded the contracted renewables backlog by adding 1,850 MW of renewable projects during second-quarter 2019.
Financial Update
NextEra had cash and cash equivalents of $1,019 million as of Jun 30, 2019 compared with $638 million on Dec 31, 2018.
Long-term debt as of Jun 30, 2019 was $33.94 billion, up from $26.78 billion on Dec 31, 2018.
Cash flow from operating activities in the first half of 2019 was $3.28 billion compared with $2.93 billion in the comparable prior-year period.
Guidance
NextEra reiterated its 2019 adjusted earnings guidance in the range of $8.00-$8.50. The company’s earnings are expected to grow at a compound annual rate of 6-8% per year through 2021, off its base of $7.70 in 2018. NextEra continues to expect 2020 adjusted earnings per share in the range of $8.70-$9.20.
It expects dividend per share to improve 12-14% per year through at least 2020, off a 2017 base of $3.93.
NextEra currently aims to add 11,500-18,500 MW of renewable power projects in its portfolio within the 2019-2022 time frame.
Zacks Rank
Currently, NextEra carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
American Electric Power AEP is scheduled to announce second-quarter 2019 results on Jul 25. The Zacks Consensus Estimate for the to-be-reported quarter is pegged at 98 cents.
Dominion Energy D is scheduled to report second-quarter 2019 results on Jul 31. The Zacks Consensus Estimate for the quarter to be reported is pegged at 79 cents.
Exelon Corp. EXC is slated to report second-quarter 2019 results on Aug 1. The Zacks Consensus Estimate for the quarter is pegged at 63 cents.
Our View
Second-quarter earnings and revenues of the company were better than expected as NextEra gained considerably from the Gulf Power acquisition, which contributed 12 cents in the reported quarter.
In addition, ongoing customer additions in Florida Power & Light Company have been driving demand and contributing to strong performance of the company.
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