Analyzing NextEra Energy’s Quarterly Revenue Trends

NextEra Energy’s earnings

NextEra Energy (NEE), the biggest utility by market cap, is scheduled to report its fourth-quarter and fiscal 2018 earnings on January 25. According to analysts’ estimates, NextEra Energy is expected to report total revenues of $4.77 billion for the quarter ending December 31. In the fourth quarter of 2017, NextEra Energy reported total revenues of $4.01 billion. Based on the estimates, NextEra Energy’s revenues for fiscal 2018 suggest flat to negative YoY growth.

Analyzing NextEra Energy’s Quarterly Revenue Trends

NextEra Energy has been reporting stellar earnings growth for the last several years. NextEra Energy stock has increased more than 15% in the last year, while broader utilities (XLU) increased 5% during the same period.

Revenue drivers

Florida Power & Light, NextEra Energy’s principal subsidiary in the state, generates more than half of the parent’s total revenues. The company’s average annual customer base growth has been ~1.0% in the last few years. The state’s relatively rapid economic growth has expanded NextEra Energy’s customer base, which could boost NextEra Energy’s fourth-quarter revenues.

NextEra Energy’s capital employed during the quarter could also have a positive impact on its upcoming earnings. Florida Power & Light’s regulatory capital employed is expected to grow ~9% through 2021.

NextEra Energy reported better-than-expected earnings in the last reported quarter. The company’s revenues fell 8%, while the EPS increased 18% YoY (year-over-year) in the third quarter.

American Electric Power (AEP) is scheduled to report its quarterly earnings on January 24. Based on analysts’ estimates, American Electric Power is expected to report EPS growth of -16% YoY in the fourth quarter.