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Nextera Energy Partners (NEP) Q2 Earnings call transcript Jul 24, 2024

AInvestWednesday, Jul 24, 2024 8:43 pm ET
2min read

In the second quarter of 2024, NextEra Energy delivered robust earnings, with adjusted earnings per share increasing by more than 9% year-over-year. This growth was driven by the strong financial and operational performance at both FPL and Energy Resources. The company's focus on strategic investments and continuous improvement has positioned it well to meet its overall objectives for the year.

FPL's Outperformance and Challenges

FPL has been delivering for its customers since the start of the most recent rate settlement in 2022. The company has been making smart capital investments in low-cost solar generation and battery storage, reducing overall fuel costs and combined with generation modernizations, saving customers nearly $16 billion since 2001. FPL's non-fuel O&M is 70% better than the national average, saving customers $3 billion every year compared to the average utility. This outperformance is a result of the company's culture of continuous improvement and productivity.

However, FPL faces challenges in managing its growth, particularly in Florida, which is one of the fastest-growing states in the U.S. This accelerated growth has led to an increase in regulatory capital employed, growing at a 12% compound annual growth rate since the beginning of 2022. FPL's reserve amortization mechanism has been utilized faster than expected, and the company expects to seek recovery of these increased expenditures in its rate case filing next year.

Energy Resources' Renewables and Storage Growth

Energy Resources is benefiting from both replacement cycle and growth cycle demand for low-cost renewables and battery storage. The company's 300 gigawatt pipeline, half of which is in the interconnection queue process or is already interconnection ready, positions it well to meet the growing demands of its power and commercial and industrial customer base. Energy Resources' continued ability to drive origination results supports the belief that the bulk of the growth demand will be met by a combination of new renewables and battery storage.

NextEra Energy's Strategic Focus and Future Outlook

NextEra Energy's strategic focus is on delivering low-cost clean energy and storage for its customers both inside and outside Florida while building new transmission where required to support new generation. The company's competitive advantages in low-cost renewables and battery storage, transmission, and its team's expertise make it well-positioned to meet the demands of the energy customer of tomorrow. The future outlook for the power generation sector, particularly renewables, has never been stronger, and NextEra Energy is built for this moment.

In conclusion, NextEra Energy's strong second-quarter performance and strategic focus on low-cost clean energy and storage, transmission, and continuous improvement set it up for continued growth and success in the years to come. The company's ability to navigate challenges, such as regulatory capital employed growth and accelerated growth in Florida, demonstrates its resilience and commitment to delivering value for its customers and shareholders.

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