Here’s What Could Drive NextEra Energy’s 3Q17 Revenues



NextEra Energy’s revenues

NextEra Energy (NEE), the largest utility holding company, will report its 3Q17 financial results on October 26, 2017. According to Wall Street analysts’ estimates, NEE is expected to report total revenues of $4.83 billion for the quarter, which ended on September 30, 2017. It reported total revenues of $4.8 billion in the same quarter last year.

Its stronger third-quarter earnings could maintain the stock’s uptrend going forward. NEE stock has risen 30.0% year-to-date, beating its peers by a huge margin.

NEE rev

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Revenue drivers

NextEra Energy reported an average revenue growth in the last few years after sluggish power demand growth, driven by energy efficiency initiatives. Its revenues were supported by its territorial monopoly in Florida, the third most populous state in the country. Florida’s population growth is much higher than the US average, which should naturally facilitate an increase in the customer base for FPL (Florida Power & Light), NextEra Energy’s principal subsidiary.

In terms of consumer sentiment and employment, Florida’s economy is better than the US average, which could expand NextEra Energy’s client base, ultimately supporting its top line. In the last few quarters, FPL has grown its customer base 1.5% annually against the industry average (XLU) of 1.0%.

Cooling degree days in Florida were 4.0% less in 3Q17 than the same quarter last year. That could have a marginal negative impact on the utility’s quarterly revenues.

In the next part of this series, we’ll see what could drive NextEra Energy’s earnings.

NextEra Energy’s peers Duke Energy (DUK) and Dominion Energy (D) are set to report their quarterly earnings on November 2, 2017, and October 30, 2017, respectively.


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