NextEra Energy Inc
) posted a mixed performance in the second quarter 2012 with
earnings edging out the Zacks Consensus Estimate while the top line
lagged expectations. The company recorded earnings of $1.26 per
share, 8 cents higher than the year-ago quarter due to marked
investments in the company's Florida Power and Light business and
continued customer growth.
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We believe the company's persistent adherence to a
growth-by-investment strategy will act as a significant top-line
driver. However, stringent environmental laws and regulations often
lead to higher expenditures and operations cost, thereby impacting
Florida Power and Light is expected to deliver a better performance
on the back of increased customer growth. The utility with its
clean energy emission profile will likely continue to provide
reliable and affordable utility services to its customers thus
boosting the company's growth in the future.
However, we believe that the improved economic condition in Florida
is only temporary. Besides, unfavorable supply cost and potential
volatility in market prices of fuel, electricity and other
renewable energy commodities could create an undesirable impact on
NextEra Energy's earnings outcome.
The company's management nevertheless focuses on its objective of
keeping an efficient long-term capital structure which will ensure
the smooth development of ongoing projects.
On the other hand, unplanned outages, weather variations and
uncertainty regarding the company's pending rate cases related to
its St. Lucie Unit 2 could hurt NextEra Energy's financials.
NextEra Energy maintained its earnings expectation for 2012 in the
range of $4.35 per share to $4.65 per share. Similarly, the company
maintained its adjusted earnings estimates for 2014 in the range of
$5.05 per share to $5.65 per share.
The Zacks Consensus Estimates for the third quarter and full year
2012 are currently pegged at $1.40 per share and $4.53 per share,
NextEra Energy's closest competitor is
Teco Energy Inc.
). The company holds a Zacks #3 Rank implying a short-term Hold
Based in Juno Beach, Florida, the company through its subsidiaries
engages in the generation, transmission, distribution, and sale of
electric energy in the United States and Canada. The company is
involved in the generation of renewable energy from wind and solar