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How NextEra Energy Is Placed ahead of Its 1Q18 Earnings

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Apr. 18 2018, Published 4:52 p.m. ET

NEE to report on April 24

The biggest utility by market capitalization, NextEra Energy (NEE) plans to report its 1Q18 financial results on April 24, 2018. According to analysts, NextEra Energy is estimated to report total revenues of ~$4.2 billion for 1Q18. In 1Q17, it reported revenues of ~4.0 billion, indicating year-over-year revenue growth of around 5.0%.

Florida-based NextEra Energy stock has been one of the most rallied stocks among the S&P 500 Utilities Index (XLU). Superior earnings growth most likely influenced the utility’s market performance in the last few years.

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Revenue drivers

NextEra Energy possesses a territorial monopoly in Florida—the third most populous state in the country. The state’s relatively rapid economic growth has helped expand NextEra Energy’s customer base. Expanding the customer base became vital for US utilities in the last few years, as energy efficiency initiatives marred the electricity consumption per customer. 

Florida Power & Light (or FPL), NextEra Energy’s principal subsidiary in the state, reported annual customer base growth of ~1.5% last year, higher than its peers. FPL generated nearly 70.0% of NextEra Energy’s total revenues in 2017.

NextEra Energy Resources (or NEER) is the competitive subsidiary of the Florida-based utility. NEER sells its competitive generation under long-term agreements, unlike other competitive utilities in the country, which enables revenue predictability and stability. In 2017, NEER generated 30.0% of NextEra Energy’s total revenues.

NextEra Energy’s peer Dominion Energy (D) is expected to report its quarterly earnings on April 27, 2018. Dominion stock has witnessed an epic descent in the last few months. Please read more in No Respite for Dominion Energy Investors.

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