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NextEra Energy Inc. (NEE - Analyst Report) announced fourth-quarter 2012 operating earnings of $1.03 per share compared with 93 cents per share in the year-ago quarter. The results of the company beat the Zacks Consensus Estimate by 7 cents.

NextEra Energy recorded GAAP earnings for the fourth quarter 2012 of $1.02 per share compared with $1.59 per share in the year-ago period.

The difference of a penny between operating and GAAP earnings, during the fourth quarter, was due to net unrealized mark-to-market losses associated with non-qualifying hedges.

Operating earnings for 2012 were $4.57 per share compared with $4.39 per share reported in 2011. The results of the company widely surpassed the Zacks Consensus Estimate of $4.50.

The earnings outperformance stemmed from positive rate changes approved by Florida Public Service Commission, efficient execution of the company’s capital investment programs and steady customer growth.

Total Revenue

NextEra Energy’s total operating revenue for fourth-quarter 2012 was $3.4 billion, down 12.7% from $3.9 billion reported in the year-ago period mainly due to lower performance from the Energy Resources segment.

Reported quarter revenue also fell short of the Zacks Consensus Estimate of $4.6 billion.

NextEra Energy’s total operating revenue for 2012 was $14.3 billion versus $15.3 billion reported in the year-ago period reflecting a decline of 7.1%.

Revenue was substantially lower than the Zacks Consensus Estimate of $15.3 billion.

Segment Results

Florida Power & Light: Total segment revenue for fourth-quarter 2012 slipped 3.2% to $2,336.0 million from $2,414.0 million in fourth-quarter 2011. The revenue downside resulted from a 3.2% decrease in total average selling price.

Total segment revenue for 2012 was $10.1 billion versus $10.6 billion in 2011 owing to the continued slackness in the U.S. economy.

Energy Resources: Total revenue for fourth-quarter 2012 was $966.0 million, down 30.6% from $1,392.0 million in fourth-quarter 2011. This was primarily due to lower returns from ongoing investment programs and above-market hedge roll-offs and production tax credit headwinds.

Total revenue for 2012 was $3,895.0 million versus $4,502.0 million in 2011, reflecting a decline of 13.4%.

Corporate and Other: Total revenue for fourth-quarter 2012 was $73 million versus $58 million in fourth-quarter 2011, increasing 25.9%. For 2012, revenue surged to $247 million from $226 million in 2011.

Operational Update

Total operating expenses for the quarter eased by 4.9% year over year. The reduction in operating expenses was primarily due to a 14.9% year-over-year drop in fuel and power purchase costs.

Interest expenses for the quarter decreased by 6.5% to $243 million from $260 million in the year-ago quarter.

Financial Highlights

Cash and cash equivalents as of Dec 31, 2012, were $329.0 million versus $377.0 million as of Dec 31, 2011.

Long-term debt of the company as of Dec 31, 2012, increased to $23.3 billion from $20.8 billion as of Dec 31, 2011.

Cash from operating activities at the end of 2012 was $3.99 billion versus $4.07 billion provided at the end of 2011.

Outlook

NextEra Energy expects 2013 adjusted earnings guidance in the range of $4.70 to $5.00 per share. For 2014, the company estimates the bottom line in the band $5.05−$5.65 per share.

Our View

We believe the successful rate hikes in Florida Power & Light and the proposed natural gas pipeline projects will offer significant upside in the near term.

Moreover, the company’s sizeable investments in renewable programs will bode well, given the U.S. government’s decision to steadily increase green energy’s share in electricity generation. NextEra Energy currently retains a Zacks Rank #2 (Buy).

Other stocks to look out for are Wisconsin Energy Corp. (WEC - Analyst Report) which is scheduled to release before the market bell on Jan 30, 2013 and Ameren Corporation (AEE - Analyst Report) and Pike Electric Corporation (PIKE - Snapshot Report) whose financial results will come out on Feb 20 and Feb 5, 2013, respectively.

Based in Juno Beach, FL, NextEra Energy Inc., through its subsidiaries, engages in the generation, transmission, distribution and sale of electric energy in Florida.

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