Back to top

Image: Bigstock

NextEra Energy Partners' (NEP) Q4 Earnings: What's in Store?

Read MoreHide Full Article

NextEra Energy Partners, LP (NEP - Free Report) is set to report fourth-quarter and 2018 results on Jan 25, before market opens. In the third quarter, the company reported a positive earnings surprise of 28.9%.

Let’s see how things are shaping up prior to the upcoming results.

Factors to Consider

Higher production and increasing usage of natural gas in North America has created opportunity for natural gas pipeline services. We expect strong natural gas demand will continue to boost performance of the partnership. NextEra Energy Partners expects adjusted EBITDA of $1-$1.15 billion for 2018 and cash available for distribution (CAFD) in the range of $360-$400 million.

The Florida City Gas acquisition, which was closed in July 2018, is expected to make positive impacts on the partnership’s fourth-quarter results. Organic growth, accretive acquisitions and focus on power generation from renewable assets are going to have positive impact on earnings.

The Zacks Consensus Estimate for fourth-quarter 2018 earnings per unit is pegged at 52 cents. The projected figure reflects year-over-year increase of 173.68%. However, the Zacks Consensus Estimate for fourth-quarter 2018 sales is pegged at $283.08 million, reflecting year-over-year decline of 43.70%.

Earnings Whispers

Our proven model does not conclusively show that NextEra Energy Partners is likely to beat earnings this quarter as it does not possess the key components. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. However, that is not the case here as you will see below.


Zacks ESP: The company’s Earnings ESP is -19.57%.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: NextEra Energy Partners sports a Zacks Rank #1.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

Stocks to Consider

Here are some companies from the Oils-Energy sector that you may want to consider instead, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Warrior Met Coal Inc (HCC - Free Report) has an Earnings ESP of +21.39%. The company sports a Zacks Rank #1 and is expected to report fourth-quarter 2018 earnings on Feb 21.

You can see the complete list of today’s Zacks #1 Rank stocks here.

CNX Resources Corporation (CNX - Free Report) has an Earnings ESP of +5.26% and a Zacks Rank #2. The company is expected to release fourth-quarter 2018 results on Jan 31.

EnLink Midstream Partners, LP has an Earnings ESP of +10%. It carries a Zacks Rank #2 and is expected to report fourth-quarter 2018 earnings on Feb 19.

Zacks' Top 10 Stocks for 2019

In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?

From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.

This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.

See Stocks Today >>


In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

CNX Resources Corporation. (CNX) - free report >>

Warrior Met Coal Inc. (HCC) - free report >>

NextEra Energy Partners, LP (NEP) - free report >>