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Why NextEra Energy Likely Continued Its Strong Performance in 4Q16

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NextEra to report on January 27

Renewables giant NextEra Energy (NEE) is scheduled to report its 4Q16 and 2016 financial results on January 27, 2017. According to analysts’ estimates, NextEra is estimated to report total revenues of ~$4.6 billion for the quarter. It reported revenues of just over $4 billion in the fourth quarter of 2015.

NextEra Energy has beat analysts’ revenue estimates in five of the past eight quarters.

NEE revenue

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What could drive NextEra’s revenues?

A strong focus on expanding its customer base has been a key to NextEra Energy’s healthy revenue growth in the past several quarters. NextEra’s principal operating zone, Florida, experienced higher employment growth, improvement in GDP growth rate, and an increase in the housing starts in the recent past, which ultimately supported customer base growth. Remember, a higher customer base compensates for the negative impact of unfavorable weather (to some extent).

According to the EIA’s (US Energy Information Administration), the average residential customer will consume 3% more electricity from December 2016 to March 2017 than during the same period last year. Higher consumption in 4Q16 may positively impact utilities’ (XLU) (VPU) revenues.

Notably, NextEra’s competitive segment NEER (NextEra Energy Resources) owns the largest fleet of renewables generation assets. It operates more than 11 gigawatts of capacity. Recent renewable capacity additions have led to growth for NextEra Energy Resources.

Peer American Electric Power (AEP) and Southern Company (SO) are scheduled to report their 4Q16 earnings on January 26 and February 1, 2017.

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