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Why Is NextEra Energy (NEE) Up 1.7% Since the Last Earnings Report?
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A month has gone by since the last earnings report for NextEra Energy, Inc. (NEE - Free Report) . Shares have added about 1.7% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
NextEra Energy Beats Q3 Earnings, Guidance Unchanged
NextEra Energy, Inc. reported third-quarter 2017 adjusted earnings of $1.85 per share, beating the Zacks Consensus Estimate of $1.75 by 5.7%. Reported earnings were also up 6.3% year over year.
The year-over-year growth in earnings was due to solid contribution from both Florida Power & Light Company and NextEra Energy Resources segments. The return was higher, primarily due to new investments made at both segments.
On a GAAP basis, NextEra Energy recorded earnings of $1.79 per share, up from $1.62 a year ago. The variance between GAAP and adjusted earnings was primarily due to loss of 13 cents from non-qualifying hedges and merger related expenses of 1 cent. The loss was offset by a one-time gain of 4 cents from income tax expenses, income of 2 cents from Spanish solar projects and 2 cents from other one-time gains.
Total Revenues
In the third quarter, NextEra Energy’s operating revenues were $4,808 million, lagging the Zacks Consensus Estimate of $4,893 million by nearly 1.7%. Reported revenues improved marginally by $3 million from the year-ago quarter.
Segmental Results
Florida Power & Light Company: Earnings came in at $1.19 per share, up 7.2% from the prior-year quarter. Revenues amounted to $3,477 million, up 5.9% from $3,283 in the prior-year quarter.
The continued investments to strengthen its operation not only increase reliability of services but is also allow it to efficiently serve its expanding customer base.
NextEra Energy Resources: Quarterly earnings came in at 62 cents per share, up from 60 cents in the year-ago quarter.
Corporate and Other: Quarterly earnings increased 1 cent to 4 cents from the year-ago quarter earnings of 3 cents per share.
Highlights of the Release
In the reported quarter, NextEra Energy’s total operating expenses were down 3.3% to $3,409 million, primarily due to lower fuel, purchased power and interchange expenses.
Florida Power & Light Company’s total energy sales in the reported quarter totaled 34,017 million kWh, down 3% from the year-ago quarter level of 35,064 kWh. This could be due to the outages caused by Hurricane Irma.
Operating income rose 9.4% to $1,399 million from $1,279 million a year ago.
Interest expenses in the reported quarter were $381 million, up 3.3% from $369 million in the year-ago quarter.
In the reported quarter, Florida Power & Light Company’s average price of electricity went up 10.4% year over year and total average customer count went up 1.3% year over year.
Financial Update
NextEra Energy had cash and cash equivalents of $1,381 million as of Sep 30, 2017 compared with $1,292 million as of Dec 31, 2016.
Long-term debt as of Sep 30, 2017 was $30.4 billion, up from $27.8 billion as of Dec 31, 2016.
NextEra Energy’s cash flow from operating activities in the first nine months of 2017 was $5,160 million compared with $5,294 million in the year-ago period.
Guidance
NextEra Energy reiterated its adjusted earnings guidance in the range of $6.35-$6.85 for 2017 and $6.80-$7.30 for 2018. The company expects earnings to witness a compound annual growth rate of 6-8% per year through 2020, off a 2016 base.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. There has been one revision lower for the current quarter. While looking back an additional 30 days, we can see even more downward momentum. There has been one move higher compared to three lower two months ago.
VGM Scores
At this time, NextEra Energy's stock has an average Growth Score of C, however its Momentum is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for momentum investors than those looking for value and growth.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Why Is NextEra Energy (NEE) Up 1.7% Since the Last Earnings Report?
A month has gone by since the last earnings report for NextEra Energy, Inc. (NEE - Free Report) . Shares have added about 1.7% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
NextEra Energy Beats Q3 Earnings, Guidance Unchanged
NextEra Energy, Inc. reported third-quarter 2017 adjusted earnings of $1.85 per share, beating the Zacks Consensus Estimate of $1.75 by 5.7%. Reported earnings were also up 6.3% year over year.
The year-over-year growth in earnings was due to solid contribution from both Florida Power & Light Company and NextEra Energy Resources segments. The return was higher, primarily due to new investments made at both segments.
On a GAAP basis, NextEra Energy recorded earnings of $1.79 per share, up from $1.62 a year ago. The variance between GAAP and adjusted earnings was primarily due to loss of 13 cents from non-qualifying hedges and merger related expenses of 1 cent. The loss was offset by a one-time gain of 4 cents from income tax expenses, income of 2 cents from Spanish solar projects and 2 cents from other one-time gains.
Total Revenues
In the third quarter, NextEra Energy’s operating revenues were $4,808 million, lagging the Zacks Consensus Estimate of $4,893 million by nearly 1.7%. Reported revenues improved marginally by $3 million from the year-ago quarter.
Segmental Results
Florida Power & Light Company: Earnings came in at $1.19 per share, up 7.2% from the prior-year quarter. Revenues amounted to $3,477 million, up 5.9% from $3,283 in the prior-year quarter.
The continued investments to strengthen its operation not only increase reliability of services but is also allow it to efficiently serve its expanding customer base.
NextEra Energy Resources: Quarterly earnings came in at 62 cents per share, up from 60 cents in the year-ago quarter.
Corporate and Other: Quarterly earnings increased 1 cent to 4 cents from the year-ago quarter earnings of 3 cents per share.
Highlights of the Release
In the reported quarter, NextEra Energy’s total operating expenses were down 3.3% to $3,409 million, primarily due to lower fuel, purchased power and interchange expenses.
Florida Power & Light Company’s total energy sales in the reported quarter totaled 34,017 million kWh, down 3% from the year-ago quarter level of 35,064 kWh. This could be due to the outages caused by Hurricane Irma.
Operating income rose 9.4% to $1,399 million from $1,279 million a year ago.
Interest expenses in the reported quarter were $381 million, up 3.3% from $369 million in the year-ago quarter.
In the reported quarter, Florida Power & Light Company’s average price of electricity went up 10.4% year over year and total average customer count went up 1.3% year over year.
Financial Update
NextEra Energy had cash and cash equivalents of $1,381 million as of Sep 30, 2017 compared with $1,292 million as of Dec 31, 2016.
Long-term debt as of Sep 30, 2017 was $30.4 billion, up from $27.8 billion as of Dec 31, 2016.
NextEra Energy’s cash flow from operating activities in the first nine months of 2017 was $5,160 million compared with $5,294 million in the year-ago period.
Guidance
NextEra Energy reiterated its adjusted earnings guidance in the range of $6.35-$6.85 for 2017 and $6.80-$7.30 for 2018. The company expects earnings to witness a compound annual growth rate of 6-8% per year through 2020, off a 2016 base.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. There has been one revision lower for the current quarter. While looking back an additional 30 days, we can see even more downward momentum. There has been one move higher compared to three lower two months ago.
VGM Scores
At this time, NextEra Energy's stock has an average Growth Score of C, however its Momentum is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for momentum investors than those looking for value and growth.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.