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NextEra Energy Partners (NEP) Down 8.9% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for NextEra Energy Partners (NEP - Free Report) . Shares have lost about 8.9% 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 the most recent earnings report in order to get a better handle on the important catalysts.
NextEra Energy Partners' Q3 Earnings Beat Estimates
NextEra Energy Partners, LP recorded third-quarter 2023 operating earnings of 57 cents per unit, which surpassed the Zacks Consensus Estimate of 48 cents by 18.8%. The bottom line, however, declined 38.7% from 93 cents recorded in the year-ago quarter.
Revenues
The firm’s operating revenues of $367 million missed the Zacks Consensus Estimate of $417 million by 12%. The figure, however, increased 21.5% from $302 million registered in the prior-year period.
Highlights of the Release
Total operating expenses were $294 million, up 12.6% from the year-ago quarter’s $261 million. This was due to an increase in depreciation and amortization and taxes other than income taxes. Our model projected total operating expenses of $291.8 million for the third quarter.
Operating and maintenance expenses totaled $128 million, down 16.3% from the prior-year quarter’s recorded figure of $153 million.
The firm reported an operating income of $73 million, up 49% from $49 million registered in the corresponding period of 2022.
Financial Condition
The firm had cash and cash equivalents of $332 million as of Sep 30, 2023, compared with $235 million as of Dec 31, 2022.
Long-term debt was $5,139 million as of Sep 30, 2023, compared with $5,250 million as of Dec 31, 2022.
Net cash provided by operating activities in the first nine months of 2023 totaled $552 million compared with $611 million in the year-ago period.
Distribution Update
NEP declared a quarterly distribution of 86.75 cents per common unit to an annualized rate of $3.47 to its unit holders. With the declaration, the annual distribution per common unit has increased approximately 6% from that recorded in the second quarter of 2023. It will be payable on Nov 14, 2023, to unit holders of record as of Nov 6, 2023.
Guidance
NextEra Energy Partners decreased its run-rate for 2023 adjusted EBITDA to $1.9-$2.1 billion from the previously guided range of $2.22-$2.42 billion. The firm also lowered its CAFD range to $730-$820 million from the previously projected range of $770-$860 million.
The firm continues to see 5-8% growth per year in limited partner distributions per unit, with a current target of 6% growth per year, as a reasonable range of expectations through at least 2026.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -58.54% due to these changes.
VGM Scores
At this time, NextEra Energy Partners has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile 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.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. 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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NextEra Energy Partners (NEP) Down 8.9% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for NextEra Energy Partners (NEP - Free Report) . Shares have lost about 8.9% 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 the most recent earnings report in order to get a better handle on the important catalysts.
NextEra Energy Partners' Q3 Earnings Beat Estimates
NextEra Energy Partners, LP recorded third-quarter 2023 operating earnings of 57 cents per unit, which surpassed the Zacks Consensus Estimate of 48 cents by 18.8%. The bottom line, however, declined 38.7% from 93 cents recorded in the year-ago quarter.
Revenues
The firm’s operating revenues of $367 million missed the Zacks Consensus Estimate of $417 million by 12%. The figure, however, increased 21.5% from $302 million registered in the prior-year period.
Highlights of the Release
Total operating expenses were $294 million, up 12.6% from the year-ago quarter’s $261 million. This was due to an increase in depreciation and amortization and taxes other than income taxes. Our model projected total operating expenses of $291.8 million for the third quarter.
Operating and maintenance expenses totaled $128 million, down 16.3% from the prior-year quarter’s recorded figure of $153 million.
The firm reported an operating income of $73 million, up 49% from $49 million registered in the corresponding period of 2022.
Financial Condition
The firm had cash and cash equivalents of $332 million as of Sep 30, 2023, compared with $235 million as of Dec 31, 2022.
Long-term debt was $5,139 million as of Sep 30, 2023, compared with $5,250 million as of Dec 31, 2022.
Net cash provided by operating activities in the first nine months of 2023 totaled $552 million compared with $611 million in the year-ago period.
Distribution Update
NEP declared a quarterly distribution of 86.75 cents per common unit to an annualized rate of $3.47 to its unit holders. With the declaration, the annual distribution per common unit has increased approximately 6% from that recorded in the second quarter of 2023. It will be payable on Nov 14, 2023, to unit holders of record as of Nov 6, 2023.
Guidance
NextEra Energy Partners decreased its run-rate for 2023 adjusted EBITDA to $1.9-$2.1 billion from the previously guided range of $2.22-$2.42 billion. The firm also lowered its CAFD range to $730-$820 million from the previously projected range of $770-$860 million.
The firm continues to see 5-8% growth per year in limited partner distributions per unit, with a current target of 6% growth per year, as a reasonable range of expectations through at least 2026.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -58.54% due to these changes.
VGM Scores
At this time, NextEra Energy Partners has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile 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.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, NextEra Energy Partners has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.