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NextEra Energy Stays Strong in Q2, Profit Rises 13%

Vineet Kulkarni - Author
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Dec. 4 2020, Updated 10:52 a.m. ET

Beats EPS estimates

Renewables giant NextEra Energy (NEE) has once again shown its mettle, continuing its strong quarterly earnings streak. On July 25, the company released its second-quarter financial results, reporting that its adjusted EPS grew 13% YoY (year-over-year) to $2.11 from $1.86, beating analysts’ estimates by a fair margin.

Among utility (XLU) peers, NextEra Energy is one of the fastest growing. In the last ten years, NextEra Energy has grown more than 8% compounded annually, doubling peers’ average growth.

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Earnings highlights

In the second quarter, NextEra Energy’s total revenue fell 9% YoY to $4.07 billion. However, its earnings rose due to a strong performance by its main subsidiaries, Florida Power and Light (or FPL) and NextEra Energy Resources (or NEER).

FPL, a regulated utility, generates more than two-thirds of NextEra Energy’s total revenue. FPL’s earnings increased ~17% in the second quarter, mainly due to its regulatory capital employed rising ~13% YoY. NEER, NextEra Energy’s competitive utility, saw its EPS rise 16% YoY. During the past few months, NEER has added 1,082 megawatts of renewable capacity to its backlog.

NextEra Energy has reported that its recent acquisitions of Gulf Power and other Florida-based assets are on track, with its Florida City Gas transaction expected to close by next week. These assets, acquired from Southern Company (SO) in May, are expected to add $0.15 and $0.20 to NEE’s adjusted EPS in 2020 and 2021, respectively.

NextEra Energy has maintained its earnings guidance of $7.45–$7.95 for this year. It aims to grow its EPS 6.0%–8.0% per year through 2021.

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