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Why Is NextEra Energy Partners (NEP) Down 8.1% Since Last Earnings Report?

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A month has gone by since the last earnings report for NextEra Energy Partners (NEP - Free Report) . Shares have lost about 8.1% 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 Energy Partners 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 Energy Partners' Q1 Earnings Outpace Estimates

NextEra Energy Partners, LP delivered earnings of $2.66 per unit for the first quarter of 2021, beating the Zacks Consensus Estimate of 39 cents by 582.1%. Also, the firm’s earnings reversed the year-ago quarter’s loss of $3.39.

Revenues

In the quarter under review, the firm’s revenues of $246 million missed the Zacks Consensus Estimate of $295 million by 16.6%. However, the top line improved16% on a year-over-year basis.

Highlights of the Release

In the March quarter, NextEra Energy Partners’ total net operating expenses were $168 million, up 3.1% from the year-ago quarter’s $163 million.

In the same period, the partnership’s operating income summed $78 million, up 59.2% from $49 million in the year-ago quarter.

Financial Condition

NextEra Energy Partners had cash and cash equivalents worth $110 million as of Mar 31, 2021 compared with $108 million as of Dec 31, 2020.

Long-term debt was $3,541 million as of Mar 31, 2021 compared with $3,376 million as of Dec 31, 2020.

Net cash provided by operating activities in the first three months of 2021 was $104 million, higher than $99 million in the comparable period last year.

Distribution Update

The firm announced the quarterly distribution of 63.75 cents per unit payable May 14 to its unitholders of record as of May 6. This brings the annualized rate to $2.55 per unit, marking a 15% hike on a yearly basis.

Guidance

For 2021, the firm expects the run rate for cash available for distribution (CAFD) in the upper end of the range of $600-$680 million. It also expects adjusted EBITDA in the upper end of its previously anticipated band of $1.44-$1.62 billion.

The partnership continues to expect 12-15% per year growth for limited partner distributions through 2024.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 12.62% due to these changes.

VGM Scores

At this time, NextEra Energy Partners has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, NextEra Energy Partners has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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