NextEra Energy beat analysts’ expectations and shattered last year’s first-quarter performance, reporting earnings Tuesday of $4.4 billion and $9.32/share, up from $1.6 billion and $3.37/share, respectively.
The Florida-based company’s adjusted earnings were $1.94/share, beating the Zacks Consensus Estimate of $1.78/share. The GAAP results reflect the deconsolidation of NextEra Energy Partners from NextEra’s financial statements and the impacts of tax reform, the company said.
“NextEra Energy delivered strong first-quarter results and is off to a solid start toward achieving our overall objectives for the year,” said CEO Jim Robo.
NextEra CFO John Ketchum told analysts the company now expects its Florida Power & Light (FPL) subsidiary to achieve its target regulatory return on equity of 11.6% “either late in the second or early in the third quarter.” He said NextEra may begin “partially restoring” FPL’s reserve amortization balance through tax savings later this year, and it continues to expect the utility will end 2020 “with a sufficient amount of surplus to potentially avoid a base rate increase for up to two additional years.”
The Florida Public Service Commission has opened separate dockets to address tax reform for FPL and each of the other Florida investor-owned utilities, Ketchum said.
“We look forward to working with the [commission] and other interested parties to further explain how FPL’s prompt actions within the terms of the settlement agreement benefit customers,” Ketchum said.
NextEra said the eight solar energy centers it has brought on line this year will generate more than $100 million in total savings for FPL customers during their operating lifetime. The utility has also announced the creation of the largest combined solar-plus-storage project in operation in the U.S., a 10-MW battery project with 40 MWh of storage capacity at Babcock Ranch in southwest Florida.
The company’s share price gained $2.50 after Tuesday’s open but finished Wednesday at $160.31, down 77 cents from Monday’s close.
Entergy Earnings Up, But Fall Short
Entergy posted first-quarter earnings Wednesday of $211 million, or $1.16/share, up from $178 million, or $0.99/share, over the same period last year. Zacks had projected earnings of $1.31/share.
The New Orleans-based company credited the performance to the lower federal income tax rate, favorable weather and a new financial reporting guidance that requires the mark-to-market of equity investments in the nuclear decommissioning trust funds at Entergy Wholesale Commodities (EWC).
EWC has shut down its Vermont Yankee nuclear unit and is planning to retire Pilgrim in 2019, Indian Point in 2021 and Palisades in 2022.
— Tom Kleckner
