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Analysts Expect Higher Q3 2018 Earnings from NextEra Energy

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NEE to report on October 23

As the largest utility by market capitalization, NextEra Energy (NEE) is slated to report its third-quarter results on October 23. Analysts expect NEE to report EPS of $2.13. The company reported EPS of $1.85 in the third quarter of 2017, which indicates earnings growth of ~15.0% year-over-year.

NextEra Energy is one of the fastest-growing utilities among the S&P 500 utilities sector. In the last decade or so, NextEra Energy’s earnings per share have risen at a CAGR[1. compound annual growth rate] of ~8.0%. In the same period, the broader utilities’ (XLU)(IDU) average EPS rose ~4.0%.

NEE eps

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Earnings drivers

Analysts expect NextEra Energy to report total revenues of $4.79 billion for the third quarter, down slightly from its revenues of $4.8 billion in the third quarter of 2017.

Florida Power & Light (or FPL), NextEra Energy’s principal subsidiary in the state, generates more than half of the parent’s total earnings. Its average annual customer base growth has been ~1.0% in the last few years. The state’s relatively rapid economic growth has helped expand NextEra Energy’s customer base, which could boost NextEra Energy’s third-quarter revenues.

NextEra Energy’s capital employed during the quarter could also have a positive impact on its upcoming earnings. Renewables capacity additions during the quarter could boost the earnings of NextEra Energy Resources, which is NextEra Energy’s competitive segment.

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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