How to Play NextEra Energy Stock After Mixed Q4 Earnings Results

Core Viewpoint - NextEra Energy reported mixed fourth-quarter 2024 earnings, with a slight increase in earnings per share but a significant decline in total revenues due to weaker contributions from its subsidiaries [1][4]. Financial Performance - Adjusted earnings per share for Q4 2024 were 53 cents, beating the Zacks Consensus Estimate of 51 cents by 3.9% and reflecting a year-over-year increase of 1.9% [4]. - Total operating revenues for the quarter were $5.38 billion, falling short of the Zacks Consensus Estimate of $6.49 billion by 17% and down 21.7% from the previous year [4]. Earnings Surprises - The company has consistently surpassed earnings expectations over the past four quarters, with an average earnings surprise of 6.50% [2][3]. Renewable Energy Expansion - NextEra Energy Resources added nearly 3.3 gigawatts (GW) of renewable projects to its contracted renewables backlog during the quarter, which now exceeds 25 GW [5]. - The company is also evaluating the recommissioning of its Duane Arnold Energy Center in Iowa, with plans to restart operations by the end of 2028 [6]. Customer Focus and Cost Efficiency - Florida Power & Light Company (FPL) maintains a typical residential customer bill that is nearly 40% below the national average, reflecting smart capital investments [7]. - FPL's non-fuel O&M cost per customer is 50% lower than the second-best in its peer group, saving customers over $24 monthly on a typical bill [14]. Future Growth and Earnings Estimates - The company anticipates adding 36.5-46.5 GW of new renewables from 2024 to 2027 [13]. - Earnings per share estimates for 2025 are projected to be in the range of $3.45-$3.70, indicating year-over-year growth of 7.29% and 802% for 2026 [15]. Shareholder Value and Dividends - NextEra Energy plans to increase its annual dividend rate by 10% at least through 2026, with a current annual dividend of $2.06 per share and a yield of 2.88% [19]. - The company is currently trading at a premium valuation with a forward 12-month P/E ratio of 19.34 compared to the industry average of 14.4 [20]. Competitive Advantages - The company benefits from rising demand for clean energy and lower electricity bills, which enhances its competitive position [22]. - Improving economic conditions in Florida are expected to facilitate customer growth and increased demand for services [12].