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NextEra Energy Beat 1Q18 Earnings Estimates

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Apr. 25 2018, Updated 8:04 a.m. ET

Profit rose 11% YoY

NextEra Energy (NEE), the biggest utility by market capitalization in the country, reported its 1Q18 earnings on April 24. The company’s strong performance continued in 1Q18. NextEra Energy reported an adjusted EPS (earnings per share) of $1.94 for the reported quarter and beat consensus estimates. In the same quarter last year, NextEra Energy reported an EPS of $1.75.

NextEra Energy stock has been one of the most rallied stocks among its peers. Superior earnings growth likely influenced the utility’s market performance in the last few years. In the trailing 12 months, NextEra Energy stock has soared more than 20%, while the Utilities Select Sector SPDR ETF (XLU) has fallen ~3%.

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Earnings drivers

NextEra Energy reported total revenues of $3.86 billion for the quarter ending on March 31 and missed consensus estimates. In 1Q17, NextEra Energy reported revenues of $3.97 billion.

Florida Power & Light (FPL), NextEra Energy’s principal regulated utility, continued its strong performance in 1Q18 and reported net income growth of 9% YoY (year-over-year). Florida Power & Light’s customer base grew 1.1%, while retail kilowatt-hour sales increased 2.9% in 1Q18—compared to the same quarter last year. The company’s employed regulatory capital grew ~13% compared to 1Q17.

NextEra Energy Resources, NextEra Energy’s competitive segment, reported an 8% increase in its net profit YoY in 1Q18. Continued capacity addition to a renewables portfolio drove NextEra Energy Resources’ performance.

NextEra Energy has given an earnings guidance range of $7.45–$7.95 per share for 2018. NextEra Energy is one of the fastest growing utilities among the S&P 500 Utilities Index. NextEra Energy aims to grow its EPS 6%–8% per year through 2021. Utilities at large (IDU) (VPU) are targeting annual EPS growth of 4%–6% for the next few years.

NextEra Energy is trading at a dividend yield of 2.8%—the lowest among its peers. Dividend growth makes NextEra Energy’s dividend profile attractive. NextEra Energy targets annual dividend per share growth of 12%—14% through at least 2020. To learn more, read Analyzing the Biggest S&P 500 Utilities’ Dividend Profiles.

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