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NextEra Energy’s 3Q15 Earnings per Share: What to Expect

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NextEra Energy’s 3Q15 EPS estimates

A panel of Wall Street analysts is expecting NextEra Energy (NEE) to report earnings per share (or EPS) of $1.65 for 3Q15. The panel estimated EPS of $1.50 for 2Q15, which the company beat by 5.8%. In 3Q14, the company reported EPS of $1.60. The panel is expecting a 3% increase in EPS year-over-year. Adjusted EPS, at $1.65, is expected to be 6.4% higher year-over-year.

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What might drive NextEra Energy’s 3Q15 EPS?

Two factors are expected to drive NextEra Energy’s 3Q15 EPS.

1. An increase in renewable assets

The company added new renewable energy assets to its generation portfolio after 3Q14 that were operational in 3Q15. NextEra energy is already the largest solar and wind energy generator in the United States. Additional revenues from the newly added renewable (TAN) energy assets are expected to drive growth in EPS in 3Q15. Plus, renewable energy plants are much cheaper to operate than fossil fuel-powered plants. So the addition of new renewable energy plants is expected to drive the company’s profitability up, positively affecting EPS.

2. Weak natural gas prices

Despite warmer-than-expected weather, natural gas prices remained weak in 3Q15. While NextEra Energy generates over 65% of its revenues from the regulated business, which should remain largely unaffected by weak natural gas prices, the company may benefit from weak natural gas prices in its unregulated business. Around half of the company’s total generation capacity is fired by natural gas. Southern Company (SO) has 40% of its capacity fired by natural gas.

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