We reiterate our Neutral recommendation on NextEra Energy Inc. ( NEE - Analyst Report ) . NextEra Energy has been for long a key utility company in the U.S. energy sector and continues to be an active competitor in the market, owing to its wide customer base as well as notable investments in renewable resources.

Recent infrastructure-augmenting projects in wind and solar both in the U.S. as well as in Canada will likely provide an edge to its stock portfolio in the future.

However, governments stepping up on environmental standards pose a serious threat to energy companies, and NextEra is no exception. With the adoption of stringent federal and environmental regulations, NextEra’s profitability might be adversely affected in the long run.

Other negatives include sensitivity of the company’s earnings to irregularities in weather patterns, an inability to secure timely rate increases and risks associated with price volatilities of energy commodities. NextEra can also be exposed to financial losses from non-fulfillment of contractual obligations by third parties.

On the bright side, Florida Power, a unit of NextEra Energy, is expected to carry on with its supply of clean emission-based reliable and affordable services to its customers. Moreover, the company focuses on keeping a strong balance sheet and keeps track of its growth momentum in investment projects. This is evident from its solid cash balance which increased by 96% in the first quarter of 2012.

The company outperformed expectations in the first quarter of 2012 with both earnings and revenue moving ahead of the corresponding Zacks Consensus Estimates. NextEra Energy projects earnings for fiscal 2012 in the range of $4.35 to $4.65 per share.

The Zacks Consensus Estimates for the second quarter and fiscal 2012 are currently pegged at $1.12 per share and $4.52 per share, respectively.

NextEra Energy presently retains a Zacks #3 Rank, which translates into a short-term Hold rating. The company’s peers include Progress Energy Inc. ( ) and Teco Energy, Inc. ( TE - Analyst Report ) .

Based in Juno Beach, Florida, NextEra Energy Inc., through its subsidiaries, engages in the generation, transmission, distribution and sale of electric energy in United States and Canada. The company is also involved in the generation of renewable energy from wind and solar projects.