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Why Is NextEra (NEE) Down 5.2% Since Last Earnings Report?
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A month has gone by since the last earnings report for NextEra Energy (NEE - Free Report) . Shares have lost about 5.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is NextEra due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
NextEra Beats Q1 Earnings Estimates, Adds New Customers
NextEra Energy, Inc. reported first-quarter 2021 adjusted earnings of 67 cents per share, which beat the Zacks Consensus Estimate of 60 cents by 11.7%. The bottom line was also up 13.6% from 59 cents per share in the prior-year quarter.
This year-over-year improvement was owing to solid performance of all businesses and expansion of its customer base.
On a GAAP basis, the company recorded earnings of 84 cents compared with 21 cents per share in the year-ago quarter.
Total Revenues
For the first quarter, NextEra’s operating revenues were $3,726 million, which lagged the Zacks Consensus Estimate of $4,742 million by 21.4%. The top line also dipped 19.2% year over year.
Segment Results
Florida Power & Light Company (FPL): Revenues amounted to $2,623 million, up 3.3% from the prior-year figure of $2,540 million. Segmental earnings came in at 37 cents per share, up 12.1% from 33 cents recorded a year ago.
Gulf Power Company (Gulf Power): Total revenues came in at $347 million, up 5.8% from the year-earlier figure. Earnings per share totaled 3 cents for the reported quarter, up 50% from the year-ago level.
NextEra Energy Resources: Revenues summed $781 million, down 55.9% from the prior-year quarter. Quarterly earnings came in at 30 cents per share compared with 27 cents in the year-ago quarter.
Corporate and Other: Operating loss for the reported quarter was 3 cents per share from this segment, on par with the year-ago period.
Highlights of the Release
Effective Jan 1, 2021, Gulf Power merged into FPL. Gulf Power will continue as a separate reporting segment of Florida Power & Light and NextEra Energy through 2021, serving its existing customers under separate retail rates.
For first-quarter 2021, FPL's average number of customers increased nearly 71,400 from the prior-year period.
During the quarter, the company invested $1,350 million in the FPL unit and $170 million in the Gulf Power unit to strengthen its existing infrastructure and increase operational resilience.
NextEra Energy Resources expanded the contracted renewables backlog by adding 1,750 megawatts of renewable projects during the March quarter.
Financial Update
The company had cash and cash equivalents of $1,462 million as of Mar 31, 2021 compared with $1,105 million on Dec 31, 2020.
Long-term debt as of Mar 31, 2021 was $46.06 billion, up from $41.94 billion on Dec 31, 2020.
Cash flow from operating activities for first-quarter 2021 was $1,292 million compared with $1,894 million in the prior-year period.
Guidance
NextEra Energy expects 2021 earnings in the range of $2.40-$2.54 per share. The metric is projected to see a CAGR of 6-8% per year through 2023, off a 2021 base. As a result, its earnings per share guidance range for 2022 and 2023 is estimated at $2.55-$2.75 and $2.77-$2.97, respectively.
The company’s unit, Energy Resources currently aims to add 22,675-30,000 MW of renewable power projects to its portfolio within the 2021-2024 time frame.
How Have Estimates Been Moving Since Then?
Estimates revision followed an upward path over the past two months.
VGM Scores
Currently, NextEra has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
NextEra has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is NextEra (NEE) Down 5.2% Since Last Earnings Report?
A month has gone by since the last earnings report for NextEra Energy (NEE - Free Report) . Shares have lost about 5.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is NextEra due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
NextEra Beats Q1 Earnings Estimates, Adds New Customers
NextEra Energy, Inc. reported first-quarter 2021 adjusted earnings of 67 cents per share, which beat the Zacks Consensus Estimate of 60 cents by 11.7%. The bottom line was also up 13.6% from 59 cents per share in the prior-year quarter.
This year-over-year improvement was owing to solid performance of all businesses and expansion of its customer base.
On a GAAP basis, the company recorded earnings of 84 cents compared with 21 cents per share in the year-ago quarter.
Total Revenues
For the first quarter, NextEra’s operating revenues were $3,726 million, which lagged the Zacks Consensus Estimate of $4,742 million by 21.4%. The top line also dipped 19.2% year over year.
Segment Results
Florida Power & Light Company (FPL): Revenues amounted to $2,623 million, up 3.3% from the prior-year figure of $2,540 million. Segmental earnings came in at 37 cents per share, up 12.1% from 33 cents recorded a year ago.
Gulf Power Company (Gulf Power): Total revenues came in at $347 million, up 5.8% from the year-earlier figure. Earnings per share totaled 3 cents for the reported quarter, up 50% from the year-ago level.
NextEra Energy Resources: Revenues summed $781 million, down 55.9% from the prior-year quarter. Quarterly earnings came in at 30 cents per share compared with 27 cents in the year-ago quarter.
Corporate and Other: Operating loss for the reported quarter was 3 cents per share from this segment, on par with the year-ago period.
Highlights of the Release
Effective Jan 1, 2021, Gulf Power merged into FPL. Gulf Power will continue as a separate reporting segment of Florida Power & Light and NextEra Energy through 2021, serving its existing customers under separate retail rates.
For first-quarter 2021, FPL's average number of customers increased nearly 71,400 from the prior-year period.
During the quarter, the company invested $1,350 million in the FPL unit and $170 million in the Gulf Power unit to strengthen its existing infrastructure and increase operational resilience.
NextEra Energy Resources expanded the contracted renewables backlog by adding 1,750 megawatts of renewable projects during the March quarter.
Financial Update
The company had cash and cash equivalents of $1,462 million as of Mar 31, 2021 compared with $1,105 million on Dec 31, 2020.
Long-term debt as of Mar 31, 2021 was $46.06 billion, up from $41.94 billion on Dec 31, 2020.
Cash flow from operating activities for first-quarter 2021 was $1,292 million compared with $1,894 million in the prior-year period.
Guidance
NextEra Energy expects 2021 earnings in the range of $2.40-$2.54 per share. The metric is projected to see a CAGR of 6-8% per year through 2023, off a 2021 base. As a result, its earnings per share guidance range for 2022 and 2023 is estimated at $2.55-$2.75 and $2.77-$2.97, respectively.
The company’s unit, Energy Resources currently aims to add 22,675-30,000 MW of renewable power projects to its portfolio within the 2021-2024 time frame.
How Have Estimates Been Moving Since Then?
Estimates revision followed an upward path over the past two months.
VGM Scores
Currently, NextEra has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
NextEra has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.