NextEra Short
NextEra Energy is the largest electric utility holding company by market capitalization in America. They provide electricity to homes all over America. I believe they will do badly this quarter taking into account how high energy costs have become. People have already started decreasing their spending as much as they could due to the rising costs of products and not only energy bills are one of their most expensive bills to pay, but also one of the easiest to decrease. This could be done by either turning off the lights in the rooms you aren’t using, not leaving the TV or A/C on at night, or even using fewer lights than usual. This is one of the many factors I believe will cut into NextEra’s revenue. In addition to those, the operation costs will also be affecting the company. I don’t exactly know how much maintaining a power plant costs, but it is probably way higher if you compare it to the operating costs of other companies. If for example, a part needs to be replaced or fixed, it is now going to cost them much more than before to acquire that product and keep the power plant running. Not to also mention the increased wage of the worker fixing it. Now that we are heading into the winter season, people will start to use much less electricity than before since they won’t need the AC anymore so I believe that will also impact them as their maintenance costs also increase from heavy rain and storm. Hurricane Ian which happened recently has also destroyed some of their power plants which caused them on missed revenue that they could have had. This could also make them lower their guidance for the next quarter as their operating costs will significantly increase fixing the power grids. I could be wrong as electricity is something that is an essential part of people’s lives and considering that NextEra is the biggest in this field, every American has probably used their service once this quarter. At the same time, customers trying to decrease their electricity use probably won't have as big of a price increase as they originally anticipated and it might not affect the company much. The EPS and revenue estimates also can get decreased based on the environment the company is in which makes it much easier for them to beat the estimates. Also considering that this report will include the summer quarter when people and places use electricity the most, it will probably be their most profitable quarter of the year.
Analyst’s comments:
Over the last 2 years, NEE has beaten EPS estimates 100% of the time and revenue estimates 13% of the time.
Over the last 3 months, EPS estimates have seen 5 upward revisions and 2 downward. Revenue estimates have seen 5 upward revisions and 2 downward.
Investors will look out for guidance after the impact of Hurricane Ian on NextEra's (NEE) unit Florida Power & Light's operations.
FPL restored power to most homes and businesses in its territory that lost service in the aftermath of the hurricane. There was no significant structural damage at any of its power plants.
NextEra Energy’s third-quarter results will likely reflect the benefits attained from an improvement in Florida’s economic conditions. The expected increase in the Florida Power and Light arm’s customer base in the third quarter is expected to have boosted NextEra Energy’s performance.