NextEra Energy NEE reported better-than-expected third-quarter 2024 earnings per share on Oct. 23. Earnings and revenues increased 12.8% and 5.5%, respectively, year over year. The uptick was driven by the solid performance of Florida Power & Light Company (“FPL”) and NextEra Energy Resources.

Courtesy of solid financial and operational performance at both businesses, NEE has reported strong earnings results. The company surpassed expectations in the last four quarters, with an average earnings surprise of 7.05%.

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Highlights of NextEra Energy Stock’s Q3 Earnings

NextEra Energy reported third-quarter 2024 adjusted earnings of $1.03 per share, which beat the Zacks Consensus Estimate of 98 cents by 5.1%. The bottom line also increased nearly 12.8% year over year.
 
In the third quarter, NextEra Energy’s operating revenues were $7.56 billion, which improved 5.5% year over year due to solid financial and operational performance at both businesses.

During the quarter, NextEra’s unit NextEra Energy Resources further expanded its contracted renewables backlog by adding nearly 3 gigawatts (GW) of renewable projects in the quarter under discussion. Its backlog additions include nearly 100 megawatts (MW) of wind projects, 1,400 MW of solar projects, 1,400 MW of battery storage projects and 100 MW of wind repowering. The company’s renewables backlog is now nearly 24 GW.

NextEra Energy Resources entered into agreements with two Fortune 50 customers for the potential development of renewables and storage projects, totaling up to 10.5 GW between now and 2030. None of these projects are included in the reported backlog.

NextEra’s Shares Outperform Industry, Sector & S&P

The increase NextEra Energy’s share prices is a reflection of the strong performance of the company and customer growth, which is boosting demand for its services.

NextEra Share Price Performance  (One year)

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Factors  in Favor of NextEra Energy Stock

NextEra Energy is a premier U.S. utility service provider, offering efficient power and energy services across various U.S. states. FPL's focus is on clean, efficient, modernized generation and a stronger and smarter grid. The improving economic condition of Florida is also boosting the company’s prospects as the company is adding new customers each quarter.

NextEra Energy Resources continues to make long-term investments in clean energy assets. The company expects to be able to add 36.5-46.5 GW of new renewables in the 2024-2027 time frame to the generation portfolio via clean energy investments.

Nearly 89% of NEE’s customers were residential, and 11% were commercial. NextEra Energy’s unmatched scale, experience and technology lead to predictable, superior returns. Its wide operation and increasing renewables assets create unmatched competitive advantages.

Capital-intensive, domestic-focused NextEra Energy will benefit from the Fed’s decision to reduce interest rates. The U.S. Federal Reserve has lowered the benchmark rate by 50 basis points, bringing down rates to 4.75%-5% from the 5.25%-5.5% range.

NextEra Energy’s Earnings Estimates Move Up

NextEra Energy reiterated its 2024 earnings per share in the range of $3.23-$3.43 compared with $3.17 a year ago. The Zacks Consensus Estimate for NEE’s 2024 and 2025 earnings per share indicates year-over-year growth of 7.57% and 7.67%, respectively. The company expects to increase its earnings per share in the range of 6-8% annually through 2027 from the 2024 level.

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NextEra Energy Stock Returns Higher Than Its Industry

Return on Equity (ROE) shows how effectively the company’s management is utilizing investors’ money to generate returns. The ROE of the company is better than its industry.

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NextEra Energy Raises Value of Shareholders

NextEra Energy plans to increase the dividend rate annually by 10%, at least through 2026, from the 2024 base, subject to its board’s approval. The current annual dividend of the company is $2.06 per share, and the dividend yield of 2.53% is better than the Zacks S&P 500 Composite’s yield of 1.53%. Check NEE’s dividend history here.

Another utility, Duke Energy’s DUK current annual dividend is $4.18 per share, reflecting a dividend yield of 3.57%.

NextEra’s Shares Trading at a Premium

The company is currently valued at a premium compared to its industry on a forward 12-month P/E basis.

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Rounding Up

NextEra Energy continues with stable performance, backed by rising demand for clean energy in its service territories. The reliability of its services and electricity bills lower than the national average creates a competitive advantage for the company.

Those who already own this Zacks Rank #3 (Hold) stock would do well to retain it in their portfolio and enjoy the benefits of dividends and rising earnings estimates and benefit from NEE’s wide presence in the United States.

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

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