NextEra Energy (NEE), one of North America's leading electric power companies, is positioned to profit from two likely trends: ongoing population growth in Florida and rising demand nationwide for renewable energy. Formerly called FPL Group, NextEra is the parent company of Florida Power & Light, the biggest electric utility in the state. Florida Power & Light's customer count averaged 4.52 million last year, up from 4.49 million in 2009 and 4.51 million in 2008.
Juno Beach, Fla.’s NextEra also is the nation's No. 1 producer of renewable energy from solar and wind-based power generating facilities, collecting most of its revenue from the wholesale distribution of electricity. The renewable energy unit had generating facilities in 26 states and Canada at the end of March.
NextEra reported adjusted first-quarter earnings of $392 million, up from $386 million in the same period last year. The adjustment does not comply with generally accepted accounting principles, but management said it believes adjusted earnings, which exclude certain non-cash and nonrecurring expenses, present a clearer picture of its profitability.
NextEra forecasted in its first-quarter earnings report "that adjusted earnings per share will grow at an overall average rate of 5 percent to 7 percent through 2014 from a 2011 base."
In the first quarter of 2011, total operating revenues fell to $3.1 billion from $3.6 billion last year, mainly because of a decline of more than $400 million on the renewable energy side of the business.
The long-term potential of the company's renewable energy business remains promising, though. In March, for example, NextEra completed development of the world's first large-scale hybrid solar power plant by connecting solar thermal mirrors with an existing combined-cycle natural gas unit in Martin County, Florida.
The company estimates that the solar modification will cut fossil fuel consumption over the life of the electricity-generating unit by 600,000 barrels of oil and 41 billion cubic feet of natural gas.
NextEra reported lower first-quarter earnings and revenue than Zacks Investment Research had predicted. But "despite the earnings and top-line misses, we appreciate the initiatives employed by NextEra Energy for furthering renewable energy generation," Zacks said in a March 7 report, reiterating a long-term neutral rating on the stock.
In late May, about two-thirds of stock analysts following the company recommended buying NextEra shares, and one-third had neutral hold ratings on the stock.
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