What Should Investors Expect from NextEra Energy in the Future?



NextEra Energy’s guidance

NextEra Energy (NEE) expects its earnings per share (or EPS) to come in at the higher end of its earlier guidance of $5.40–$5.70 for fiscal 2015. Since the company already reported EPS of $4.97 until the end of 3Q15, it may generate EPS of over $0.58 in 4Q15 based on the guidance.

NextEra Energy revised its 2016 guidance upwards. NEE now expects to generate EPS of $5.85–$6.35. The company is looking forward to healthy EPS growth of 6%–8% annually through 2018. It expects to undertake capital expenditure of $3.4 billion–$3.8 billion in fiscal 2015, $3.9 billion–$4.3 billion in fiscal 2016, and an annual average of $3.3 billion–$3.8 billion in fiscal 2017 and fiscal 2018.

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Analyst expectations

Wall Street analysts estimate NextEra Energy (NEE) will generate $4.0 billion in revenues in 4Q15. Analysts are expecting an operating profit of $713 million and EBITDA (earnings before interest, taxes, depreciation, and amortization) of $1.7 billion in 4Q15. Adjusted net income is expected to come in at $490.5 million, implying an EPS of $1.08.

Bottom line

3Q15 was a good quarter for NextEra Energy (NEE) and almost all American utilities (XLU). Going by analyst expectations, NEE is set to surpass its EPS guidance for 2015. However, it remains to be seen whether the company can manage its expected earnings growth over the next few years if we see a high-interest-rate environment. Investors should also watch out for NextEra Energy Partners’ (NEP) investments and distribution growth.


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