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NextEra (NEE) Exceeds Q1 Earnings & Revenue Estimates

NextEra Energy, Inc. NEE reported first-quarter 2016 adjusted earnings of $1.55 per share, outpacing the Zacks Consensus Estimate of $1.38 by 12.3%. Moreover, reported earnings soared nearly 10% year over year, backed primarily by continued investments in its subsidiary, Florida Power & Light Company (“FPL”).

On a GAAP basis, NextEra Energy registered first-quarter earnings of $1.37 per share compared to $1.45 earned a year ago. The variance between adjusted and GAAP earnings was due to an unrealized mark-to-market loss of 16 cents from non-qualifying hedges, merger related expenses of a penny, loss of a penny from other than temporary impairments on certain investments, gain of a penny from a previous asset sale and operating loss of a penny from the Spain solar project.

Total Revenue

In the first quarter, NextEra Energy’s operating revenues were $3,835 million, marginally ahead of the Zacks Consensus Estimate of $3,823 million. Reported revenues, however, decreased 6.8% from $4,104 million a year ago.

Segmental Results

Florida Power & Light Company (FPL):In the first quarter, segmental revenues of $2,303 million down 9.4% year over year. Earnings came in at 85 cents per share compared with 80 cents in the prior-year quarter.

NextEra Energy Resources (NEER): Revenues from this segment were down 1.4% to $1,441 million. Earnings of 66 cents improved 13.8%.

Corporate and Other: The segment’s quarterly revenues were $91 million, down from $101 million a year ago. Quarterly earnings were 4 cents, compared to 3 cents a year ago.

Operational Update

In the reported quarter, NextEra Energy’s total operating expenses fell 12.6% to $2,601 million.

Operating income grew 9.3% to $1,234 million from $1,129 million a year ago.

NextEra’s interest expenses in the reported quarter were $509 million, up from $321 million in the prior-year quarter due to debt issuance.

Financial Update

NextEra Energy had cash and cash equivalents of $0.63 billion as of Mar 31, 2016, compared with $0.57 billion as of Dec 31, 2015.

Long-term debts as of Mar 31, 2016 were $27.8 billion, up from $26.7 billion as of Dec 31, 2015.

NextEra Energy’s cash flow from operating activities in the quarter under review was $1.54 billion, compared with $1.18 billion in the year-ago period.

Guidance

NextEra reiterated its earnings guidance of $5.85–$6.35 for 2016 and $6.60–$7.10 for 2018. The company expects earnings to grow at a compound annual growth rate of 6% to 8% per year through 2018, off a 2014 base.

Peer Releases

FirstEnergy Corp. FE reported adjusted earnings of 80 cents, above the Zacks Consensus Estimates of 76 cents by 5.3%.

Entergy Corp. ETR reported adjusted earnings of $1.35, above the Zacks Consensus Estimates of $1.17 by 15.4%.

PPL Corp. PPL reported adjusted earnings of 67 cents, below the Zacks Consensus Estimates of 75 by 10.7%.

Zacks Rank

NextEra energy currently carries a Zacks Rank #3 (Hold).

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NEXTERA ENERGY (NEE): Free Stock Analysis Report
 
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