Thursday, February 21, 2019

NextEra’s Earnings Disappoint Despite Increase

By Tom Kleckner

NextEra Energy’s quarterly and year-end earnings surpassed 2017 but came up short of analysts’ quarterly expectations, the company revealed Friday.

The Florida-based company reported fourth-quarter GAAP earnings of $422 million ($0.88/share), compared to $2.16 billion ($4.55/share) the year prior. Adjusted earnings came in at $718 million ($1.49/share) for the period, a nickel short of analysts’ projections of $1.54/share, according to Thomson Reuters.

For the year, NextEra’s 2018 earnings were $6.64 billion ($13.88/share), compared to $5.38 billion ($11.39/share) in 2017.

Clean energy is key to NextEra’s growth, according to the company. | NextEra

Investors reacted to the results by driving the company’s stock price down by almost 3.5% from Thursday’s close of $180.41. Shares closed at $174.17, and gained only 3 cents in after-hours trading.

CEO Jim Robo called 2018 a “terrific year” for the company. Ticking off a list of achievements during a call with financial analysts, he said the company was able to reach its 2018 adjusted earnings-per-share target of $7.70, about a 15% increase over 2017’s results.

NextEra CEO Jim Robo | © RTO Insider

Robo said he would be disappointed if NextEra is unable to deliver financial results at or near the top end of its 6 to 8% adjusted EPS compound annual growth rate range through 2021.

Wholesale electricity supplier NextEra Energy Resources (NEER) nearly doubled the amount of megawatts it originated the year before, adding 6.5 GW of renewable projects to its backlog, including energy storage and repowering. The NextEra subsidiary commissioned nearly 2.7 GW of wind and solar projects in the U.S. last year and expects to have as much at 16.5 GW in operation through 2020.

More than 40% of those solar projects included a battery storage component, which Robo said is the beginning of the next play in renewable development — pairing low-cost wind and solar energy with low-cost storage solutions. The company expects wind to be a 2- to 2.5-cent/kWh product, and solar to be 2.5 to 3 cents/kWh, within the next three to four years.

“We continue to believe that this will be massively disruptive to the nation’s generation fleet and create significant opportunities for renewable growth well into the next decade,” Robo said.

Before the call began, NextEra announced the retirement of Armando Pimentel as CEO of NEER, among several other organizational changes.

NextEra CFO John Ketchum will replace Pimentel. Rebecca Kujawa, vice president of business management for NEER, has been promoted to replace Ketchum.

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