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Assessing NextEra Energy’s 4Q17 Earnings and Growth Prospects

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NextEra Energy’s earnings

According to analysts’ estimates, Juno Beach, Florida-based NextEra Energy (NEE) will report EPS (earnings per share) of $1.31 for the quarter ended December 31, 2017. In the same quarter in 2016, NEE earned EPS of $1.21, indicating a rise of 8.3% year-over-year.

Considering analysts’ earnings estimates for 4Q17, NextEra Energy is expected to report EPS of $6.77 for 2017. In 2016, it earned EPS of $6.17, representing annual earnings growth of close to 10%. In comparison, broader utilities’ (XLU) (IDU) average annual earnings growth has been ~5%.

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Long-term earnings drivers

NextEra Energy generates nearly two-thirds of its total earnings from regulated operations in Florida. Unlike other competitive utilities (EXC) (FE) in the sector, its competitive segment sells wholesale power under long-term contracts, which provides it with earnings stability and predictability.

The generation portfolio of NextEra Energy’s competitive segment, NextEra Energy Resources, plays an important role in driving the company’s earnings growth. The segment has 20 gigawatts of capacity and generates more than 80% of its power from renewables—the largest percentage in the world.

NextEra’s performance for the last several quarters has been commendably boosted by solid performances from both its utility and nonutility segments. Its continued investment in regulated rate bases has fortified its regulated operations, the contributions of its contracted clean energy portfolio, and its investments in natural gas pipelines—all of which have recently shaped NextEra Energy’s growth.

NextEra Energy’s faster earnings growth has largely shaped investors’ returns over the last few years. Read Is NextEra Energy a Worthy Addition to Your Utility Portfolio? for more information.

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