Core Insights - The Utilities Select Sector SPDR ETF (XLU) has shown strong performance over the past year, particularly as the S&P 500 has rallied through 2024, indicating a robust interest in the power-generating sector in 2025 [1] Group 1: Performance Analysis - XLU has been a consistent performer, benefiting from the overall market rally and demonstrating significant alpha in the power-generating space [1] Group 2: Market Context - The article highlights the macro drivers influencing asset classes, including stocks and commodities, which are critical for understanding the current investment landscape [1]

Group 1 - NextEra Energy (NYSE: NEE) is reaching an AI growth inflection point, with a backlog acceleration indicating potential for sustained revenue and EPS growth for at least a decade [1] - The NextEra Energy Resources (NEER) side of the business is experiencing favorable conditions that support its growth trajectory [1]

Core Insights - NextEra Energy has demonstrated strong growth driven by Florida's economy and investments in clean energy, achieving a 10% compound annual growth rate in dividends over the past decades, resulting in total returns of 13% annualized compared to 10% for the S&P 500 [1][2] Financial Performance - In the first quarter, NextEra Energy's adjusted earnings per share increased nearly 9% year-over-year, showcasing robust growth for a utility [3] - Florida Power & Light (FPL) generated $1.3 billion in adjusted net income, a more than 12% increase from the previous year, supported by smart capital investments and a focus on solar energy [4] - NextEra's energy resources segment reported $908 million in adjusted net income, a 10% increase from the prior year, benefiting from investments in renewable energy capacity [5] Growth Projections - NextEra Energy aims to grow adjusted earnings per share at a rate of 6% to 8% annually through 2027, while also increasing dividends by around 10% annually [6] - FPL has submitted a four-year rate request plan to support investments in solar and battery storage, forecasting the need for over 17 GW of solar generation capacity and more than 7.6 GW of battery storage over the next decade [6] Investment Opportunities - The company added 3.2 GW to its backlog of renewable and storage projects, bringing the total to 28 GW, supporting long-term growth expectations [7] - The U.S. is projected to need an additional 450 GW of clean power capacity by 2030, positioning NextEra as a leader in capturing new development opportunities [8] Investment Appeal - NextEra Energy is well-positioned to continue growing earnings at an above-average rate due to its operations in Florida and its renewable power platform, which supports a strong dividend yield of 3.3% compared to less than 1.5% for the S&P 500 [9][10]

Financial Performance - Operating revenues for Q1 2025 were $6,247 million, an increase of 9% compared to $5,731 million in Q1 2024[28]. - Net income attributable to NextEra Energy (NEE) for Q1 2025 was $833 million, down 63% from $2,268 million in Q1 2024[28]. - Earnings per share attributable to NEE decreased to $0.41 in Q1 2025 from $1.11 in Q1 2024[28]. - Total operating expenses increased to $4,027 million in Q1 2025, up 7% from $3,776 million in Q1 2024[28]. - Comprehensive income attributable to NEE for Q1 2025 was $845 million, down from $2,253 million in Q1 2024[30]. - For the three months ended March 31, 2025, operating revenues increased to $3,997 million, up from $3,834 million in the same period of 2024, representing a growth of 4.3%[42]. - Net income for the three months ended March 31, 2025, was $1,316 million, compared to $1,172 million for the same period in 2024, reflecting an increase of 12.3%[42]. - NEE's net income attributable to the company for Q1 2025 was $833 million, a decrease from $2,268 million in Q1 2024[123]. - Basic earnings per share for NEE was $0.41 in Q1 2025, down from $1.11 in Q1 2024[123]. Cash Flow and Liquidity - Cash flows from operating activities for Q1 2025 were $2,769 million, a decrease from $3,077 million in Q1 2024[35]. - The company had cash and cash equivalents of $2,550 million at the end of Q1 2025, an increase from $2,213 million at the end of Q1 2024[35]. - NEE's cash equivalents and restricted cash equivalents totaled $677 million for equity securities and $101 million for FPL equity securities as of December 31, 2024[94]. - NEE's total sources of cash for Q1 2025 were $13,208 million, while total uses of cash were $12,060 million, resulting in a net increase of $1,148 million[199]. - As of March 31, 2025, NEE's total net available liquidity was approximately $18.4 billion, with $4,484 million from FPL and $13,965 million from NEECH[202][203]. Assets and Liabilities - Total assets as of March 31, 2025, were $194,264 million, compared to $190,144 million as of December 31, 2024[33]. - Total liabilities increased to $133,898 million as of March 31, 2025, from $129,283 million at the end of 2024[33]. - The total current liabilities for NEE as of March 31, 2025, were $22,861 million, compared to $25,355 million at the end of 2024, showing a decrease of about 9.8%[214]. - The total noncurrent liabilities for NEE were $111,037 million as of March 31, 2025, compared to $103,928 million at the end of 2024, reflecting an increase of about 6.8%[214]. - Total derivative liabilities were reported at $3,850 million as of March 31, 2025, compared to $3,081 million at the end of 2024, indicating a significant increase[72][76]. Capital Expenditures - Capital expenditures for the three months ended March 31, 2025, were $2,341 million, slightly higher than $2,237 million in the same period of 2024[48]. - Total capital expenditures for the period were $7,942 million, compared to $9,711 million in the prior year, indicating a reduction of approximately 18.2%[201]. - Estimated capital expenditures for 2025 through 2029 total approximately $47.49 billion, with $6.31 billion in 2025 alone[138]. - New generation capital expenditures are projected at $15.8 billion, while existing generation expenditures are estimated at $5.68 billion[138]. - Transmission and distribution capital expenditures are expected to reach $20.63 billion over the same period[138]. Shareholder Equity - NEE's total shareholder's equity increased to $44.292 billion as of March 31, 2025, up from $43.076 billion at December 31, 2024[50]. - FPL's retained earnings rose to $16.051 billion as of March 31, 2025, compared to $14.835 billion at December 31, 2024, reflecting an increase of 8.2%[50]. Derivative Instruments and Risk Management - NEE and FPL utilize derivative instruments to manage risks associated with fuel and electricity purchases, with fair value changes recorded as assets or liabilities[57]. - As of March 31, 2025, total derivative assets amounted to $2,681 million, an increase from $2,653 million as of December 31, 2024[72][76]. - The net fair value of commodity contracts for NEE was $2,527 million as of March 31, 2025, reflecting a decrease from $2,125 million at the end of 2024[72][76]. - NEE's total derivative assets and liabilities reflect the company's ongoing engagement in commodity trading and risk management strategies[72][76]. - The fair value of NEE's other investments, primarily debt securities, was $2,059 million at March 31, 2025, consistent with the previous quarter[225]. Legal and Regulatory Matters - NEE is involved in ongoing legal proceedings, including a shareholder class action lawsuit with unspecified damages[155]. - The company is vigorously defending against an antitrust lawsuit seeking $350 million in damages, which could be tripled if monopolization is found[157]. - The Florida Supreme Court is currently reviewing an appeal regarding FPL's 2021 rate agreement, with oral arguments held in October 2024[127]. Taxation - The effective income tax rate for NEE for the three months ended March 31, 2025, was impacted by unfavorable changes in the fair value of interest rate derivative instruments and the impairment charge related to XPLR[109]. - NEE's effective income tax rate for Q1 2025 was approximately 914%, driven by a pretax loss of $57 million[174]. - NEE's effective income tax rate is influenced by production tax credits (PTCs) and investment tax credits (ITCs), which can significantly affect the overall tax rate depending on pretax income or loss[110].

Core Viewpoint - NextEra Energy, Inc. (NEE) reported strong first-quarter 2025 adjusted earnings, exceeding expectations, driven by solid operational performance across its segments [1][3]. Financial Performance - Adjusted earnings per share for Q1 2025 were 99 cents, beating the Zacks Consensus Estimate of 97 cents by 2.1% and reflecting an 8.8% year-over-year increase [1]. - GAAP earnings per share for the same period were 40 cents, down from $1.1 in the previous year [2]. - Total operating revenues for Q1 2025 were $6.24 billion, which was 14.9% below the Zacks Consensus Estimate of $7.34 billion, but represented a 9% year-over-year improvement [3]. Segment Results - Florida Power & Light Company (FPL) generated revenues of approximately $3.99 billion, a 4.25% increase from $3.83 billion in the prior year, with earnings of 64 cents per share compared to 57 cents [4]. - NextEra Energy Resources reported revenues of $2.16 billion, up 16% from $1.86 billion year-over-year, with earnings of 44 cents per share compared to 40 cents [4]. - Corporate and Other segment revenues were $87 million, significantly higher than $33 million in the previous year, but the operating loss widened to 9 cents per share from a loss of 6 cents [5]. Strategic Initiatives - FPL added 894 megawatts (MW) of new solar capacity in Q1 2025, increasing its total solar portfolio to over 7.9 gigawatts (GW) [6]. - FPL's Ten-Year Site Plan anticipates a need for over 17 GW of solar generation and more than 7.6 GW of battery storage by 2034, aiming to increase solar energy's contribution to total generation from 9% in 2024 to 35% by 2034, with planned investments of nearly $50 billion from 2025-2029 [7]. - NextEra Energy Resources expanded its contracted renewables backlog by adding nearly 3.2 GW of renewable projects, bringing the total backlog to over 28 GW [8]. Financial Update - As of March 31, 2025, NEE had cash and cash equivalents of approximately $2.41 billion, up from $1.49 billion at the end of 2024 [9]. - Long-term debt increased to $79.8 billion from $72.4 billion over the same period [9]. - Cash flow from operating activities in Q1 2025 was $2.76 billion, down from $3.07 billion in Q1 2024 [9]. Guidance - NEE reaffirmed its 2025 earnings guidance, expecting earnings per share in the range of $3.45-$3.70, with a midpoint of $3.575, which is lower than the Zacks Consensus Estimate of $3.68 [10]. - For 2026 and 2027, adjusted earnings per share are expected to be in the range of $3.63 to $4.00 and $3.85 to $4.32, respectively, with anticipated earnings growth of approximately 6-8% through at least 2027 [10][11].

First Quarter 2025 Other Earnings Conference Call April 23, 2025 NextEra Energy 1 Cautionary Statements and Risk Factors That May Affect Future Results This presentation includes forward-looking statements within the meaning of the federal securities laws. Actual results could differ materially from such forward-looking statements. Factors that could cause actual results to differ are discussed in the Appendix herein and in NextEra Energy's SEC filings. Non-GAAP Financial Information This presentation refer ...

Financial Data and Key Metrics Changes - Adjusted earnings per share increased by nearly 9% year-over-year, reflecting solid financial and operational performance across Florida Power & Light (FPL) and Energy Resources [8][39] - FPL's earnings per share increased by $0.07 year-over-year, driven by regulatory capital employed growth of approximately 8.1% [39] - Energy Resources reported adjusted earnings growth of nearly 10% year-over-year [47] Business Line Data and Key Metrics Changes - FPL placed into service 894 megawatts of new solar, bringing its owned and operated solar portfolio to over 7.9 gigawatts, the largest utility-owned solar portfolio in the country [41] - Energy Resources originated approximately 3.2 gigawatts of new renewables and storage projects, marking the largest solar and battery storage origination quarter ever [26][47] - FPL's capital expenditures were approximately $2.4 billion for the quarter, with full-year capital investments expected to be between $8 billion and $8.8 billion [39][41] Market Data and Key Metrics Changes - FPL's first quarter retail sales increased by approximately 1.8% year-over-year, with a weather-normalized increase of roughly 0.6% [46] - The company expects more than 450 gigawatts of cumulative demand for new generation in the U.S. between now and 2030 [9] Company Strategy and Development Direction - NextEra Energy emphasizes a diversified energy strategy, advocating for all forms of energy solutions to meet the growing demand for electricity [10][19] - FPL plans to invest nearly $50 billion from 2025 to 2029 and add more than 25 gigawatts of new generation and battery storage by 2034 [24][25] - The company aims to maintain low customer bills while delivering high reliability and outstanding customer service [22][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's ability to meet the enormous electricity demand in the U.S., highlighting the importance of energy policy [37] - The company is well-positioned to capitalize on long-term growth prospects, with a comprehensive power generation business [27] - Management noted challenges in the supply chain and labor market but remains confident in the company's strategic positioning [14][30] Other Important Information - The company has diversified its supply chain to mitigate tariff risks, estimating less than $150 million in tariff exposure through 2028 on over $75 billion in expected capital spend [28][33] - A leadership transition is underway, with Brian Bolster succeeding Rebecca Kujawa as President and CEO of NextEra Energy Resources [34][36] Q&A Session Summary Question: Clarification on domestic battery contracts and tariff exposure - Management confirmed that domestic battery contracts are assembled in the U.S. and have protections against tariff exposure [57][59] Question: Supplier health and commitments - Management expressed confidence in supplier commitments due to NextEra's buying power and contractual protections [61][63] Question: Impact of transferability on existing assets - Management explained that transferability is crucial for monetizing tax credits, which is essential for financing projects [66][70] Question: Update on Duane Arnold contracting opportunity - Management reported positive progress on the Duane Arnold project, with no significant obstacles encountered [101] Question: Renewable demand trends from tech customers - Management noted strong and unchanged demand for renewables from tech customers, particularly in data centers [123][125]

Core Viewpoint - NextEra Energy reported a revenue of $6.25 billion for Q1 2025, marking a 9% year-over-year increase, but fell short of the Zacks Consensus Estimate of $7.34 billion by 14.89% [1] Financial Performance - Earnings per share (EPS) for the quarter was $0.99, an increase from $0.91 a year ago, exceeding the consensus EPS estimate of $0.97 by 2.06% [1] - Operating Revenues for NextEra Energy Resources (NEER) were $2.16 billion, significantly below the estimated $3.02 billion, but showed a 16% increase year-over-year [4] - Florida Power & Light (FPL) reported operating revenues of $4 billion, slightly below the $4.30 billion estimate, with a year-over-year increase of 4.3% [4] - Operating income for FPL was reported at $1.80 billion, matching the average estimate [4] - NextEra Energy Resources (NEER) reported an operating income of $525 million, which was below the average estimate of $1.32 billion [4] - Corporate & Other segment reported an operating loss of $68 million, worse than the average estimate of a loss of $24.63 million [4] Stock Performance - Over the past month, NextEra shares have returned -2.8%, outperforming the Zacks S&P 500 composite's -6.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

Group 1: Earnings Performance - NextEra Energy reported quarterly earnings of $0.99 per share, exceeding the Zacks Consensus Estimate of $0.97 per share, and up from $0.91 per share a year ago, representing an earnings surprise of 2.06% [1] - The company posted revenues of $6.25 billion for the quarter ended March 2025, which missed the Zacks Consensus Estimate by 14.89%, compared to $5.73 billion in the same quarter last year [2] - Over the last four quarters, NextEra has surpassed consensus EPS estimates four times but has not beaten consensus revenue estimates during the same period [2] Group 2: Stock Performance and Outlook - NextEra shares have declined approximately 7% since the beginning of the year, while the S&P 500 has decreased by 10.1% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the upcoming quarter is $0.98 on revenues of $7.29 billion, and for the current fiscal year, it is $3.68 on revenues of $29.35 billion [7] Group 3: Industry Context - The Utility - Electric Power industry, to which NextEra belongs, is currently ranked in the top 14% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors or through tools like the Zacks Rank [5][6]

Financial Performance - NextEra Energy reported Q1 2025 net income of $833 million, or $0.40 per share, down from $2,268 million, or $1.10 per share in Q1 2024[3]. - Adjusted earnings for Q1 2025 were $2.038 billion, or $0.99 per share, compared to $1.873 billion, or $0.91 per share in Q1 2024, reflecting a nearly 9% year-over-year increase[4]. - Florida Power & Light (FPL) achieved Q1 2025 net income of $1.316 billion, or $0.64 per share, up from $1.172 billion, or $0.57 per share in the prior-year quarter[5]. - NextEra Energy reported total operating revenues of $6,247 million for the three months ended March 31, 2025, with FPL contributing $3,997 million and NEER contributing $2,163 million[27]. - The company incurred total operating expenses of $4,027 million, with fuel, purchased power, and interchange costs amounting to $1,165 million[27]. - NextEra Energy's net income attributable to the company was $833 million, translating to earnings per share of $0.40[27]. - Adjusted earnings for NextEra Energy were reported at $2,038 million, with an adjusted earnings per share of $0.99[27]. - The company experienced net losses associated with non-qualifying hedges amounting to $688 million, impacting overall financial performance[28]. - XPLR Infrastructure, LP investment gains contributed $855 million to the adjusted earnings, reflecting strong performance in this segment[27]. - NextEra Energy's interest expense totaled $1,774 million, indicating significant financial obligations[27]. - The company faced a net loss of $655 million from equity method investees, highlighting challenges in this area[27]. - NextEra Energy's total other income deductions were reported at $2,313 million, affecting the overall income before taxes[27]. Capital Expenditures and Investments - FPL's capital expenditures for Q1 2025 were approximately $2.4 billion, with full-year capital investments expected between $8 billion and $8.8 billion[5]. - FPL added 894 megawatts of new solar capacity in Q1 2025, increasing its total solar portfolio to over 7.9 gigawatts, the largest utility-owned solar portfolio in the U.S.[6]. - NextEra Energy Resources added approximately 3.2 gigawatts of new renewables and storage to its backlog, bringing the total backlog to roughly 28 gigawatts[12]. - FPL's Ten-Year Site Plan projects the need for over 17 gigawatts of cost-effective solar generation and over 7.6 gigawatts of battery storage over the next 10 years[10]. - Capital expenditures for FPL were $2,341 million, and independent power and other investments of NEER totaled $5,441 million[38]. - The net cash used in investing activities was $9,321 million, indicating significant capital allocation towards growth initiatives[40]. Future Projections - NextEra Energy expects adjusted earnings per share for 2025 to be in the range of $3.45 to $3.70, with growth projections for 2026 and 2027 at $3.63 to $4.00 and $3.85 to $4.32, respectively[14]. - FPL's proposed base rate adjustments include a request for approximately $1.545 billion starting in January 2026, with additional adjustments in subsequent years[7]. - FPL's typical residential customer bill is projected to grow at an average rate of about 2.5% from January 2025 through the end of 2029, remaining approximately 25% below the projected national average[9]. - The company anticipates FPL's earnings per share to increase to $0.64 in 2025, indicating growth expectations[42]. Assets and Liabilities - Total current assets amounted to $12.648 billion, while total assets reached $194.264 billion as of March 31, 2025[33]. - Total liabilities were reported at $133.898 billion, with long-term debt comprising $79.814 billion[33]. - NextEra Energy's cash and cash equivalents stood at $2.419 billion, indicating strong liquidity[33]. - The company’s customer receivables, net of allowances, were $3.153 billion, reflecting robust revenue collection capabilities[33]. - Total current assets amounted to $11,951 million, with cash and cash equivalents at $1,487 million and customer receivables at $3,336 million[35]. - Total liabilities reached $129,283 million, with long-term debt comprising $72,385 million and current liabilities at $25,355 million[35]. - Total common shareholders' equity was $50,101 million, with retained earnings at $32,946 million[35]. Operational Challenges - The company emphasized the importance of risk management tools to mitigate operational risks and market volatility, particularly in energy markets[25]. - The company reported unrealized losses on marked-to-market derivative contracts of $964 million[38]. - The company experienced unrealized losses on marked to market derivative contracts of $351 million, impacting overall financial performance[40]. - Corporate and Other reported a loss per share of $0.32 for 2025, reflecting challenges in that segment[42].