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NextEra Energy Beats Expectations, Reports Stellar Growth

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Jan. 29 2016, Updated 4:01 p.m. ET

NextEra continues growth

NextEra Energy (NEE) reported its 4Q15 earnings on January 28, 2016. NextEra continued its stellar performance, with its net income rising 17% year-over-year.

It reported 4Q15 net income of $539 million, or $1.17 per share, on an adjusted basis against $458 million, or $1.03 per share, in 4Q14. Shares of NextEra rose 1.5% during the day and closed at $108 on January 28.

NextEra Energy posted 2015 earnings of $2.6 billion, or $5.71 per share, compared to $2.3 billion, or $5.30 per share, in 2014.

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Performance drivers

Both regulated and unregulated segments of NextEra Energy contributed to its strong earnings in 4Q15. NextEra’s regulated utility subsidiary, Florida Power & Light, posted strong revenues due to a healthy rise in its customer base growth. NextEra Energy Resources’ earnings were positively impacted due to added capacity throughout the year.

NextEra recorded a strong rise in customers in 2015, which was reflected in its healthy earnings. Apart from increased usage, NextEra’s performance in 4Q15 was also driven by capital investments backed by rate increases. Based on a utility’s investments in a particular service area, it can file a rate case to regulators for revenue requirements.

We’ll take a look at a detailed segment-by-segment performance in the next part of this series.

Glimpse at the future

NextEra is expecting 2016 earnings in the range of $5.85–$6.35 per share. Aiming for accelerated 6%–8% annual earnings growth, NextEra’s management also provided a guidance range of $6.70–$7.10 per share for 2018. Florida Power & Light could play a substantial role in NextEra’s growth in the near future. Its aggressive capital spending plan of $15 billion in the next five years makes room for periodic rate increases.

NextEra Energy Resources is actively raising its renewables (PBW) portfolio with a focus on wind generation facilities. NextEra Energy is already the largest power generator by both wind (FAN) and solar (TAN) energy in the Unites States.

Along with NextEra, utilities companies American Electric Power (AEP) and Xcel Energy (XEL) also reported their quarterly results on January 28, 2016. XEL reported earnings in-line with analysts’ estimates, while AEP missed earnings and revenue estimates.

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