Electric utility giant, NextEra Energy, Inc. NEE is expected to beat expectations when it reports second-quarter 2015 earnings results before the opening bell on Aug 3, 2015.
Last quarter this Juno Beach, FL-based company had posted a 10.2% positive surprise. Let’s see how things are shaping up for this announcement.
What is Driving the Better-than-Expected Earnings?
NextEra Energy could clinch an earnings beat this season driven by organic growth, renewable investments and favorable economic factors.
The company has already commenced two large-scale combined-cycle natural gas projects in the past two years and is on track with the third one to be completed in mid-2016. Investment in these clean energy modernization ventures is bringing in a number of benefits for the utilities especially due to rock bottom natural gas prices.
NextEra’s investment in renewables over the last few years has been compelling – a fact well reflected in first-quarter results. Its subsidiary – NextEra Energy Partners, LP – entered into an agreement to acquire Shafter, a 20 megawatt contracted solar project in California that was scheduled to be completed in the second quarter 2015.
In the second quarter, Florida Power & Light Company, another NextEra subsidiary, partnered with Florida International University to build a commercial-scale distributed solar power facility which calls for installation of 5,700 solar panels.
As for economic factors, the ongoing improvement in the Florida economy, resulting in a declining unemployment rate and increasing housing permits, has spurred demand for utility services. This is sure to boost the prospects of NextEra.
Why a Likely Positive Surprise?
Our proven model shows that NextEra Energy is likely to beat earnings because it has the right combination of two key ingredients.
Positive Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is at +1.33%. This is because the Most Accurate estimate of $1.52 per share is higher than the Zacks Consensus Estimate of $1.50. This is a meaningful indicator of a likely positive earnings surprise for the shares.
Zacks Rank: NextEra is currently carrying a Zacks Rank #3 (Hold). The combination of NextEra Energy’s Zacks Rank #3 and +1.33% ESP makes us positive of an earnings beat this season.
The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
Other Stocks to Consider
NextEra Energy is not the only stock looking up this earnings season. We also see likely earnings beats coming from these three industry peers.
NRG Energy, Inc. NRG has an earnings ESP of +40.00% and a Zacks Rank #3 (Hold).
UIL Holdings Corporation UIL has an earnings ESP of +7.14% and a Zacks Rank #3.
Consolidated Edison, Inc. ED has an earnings ESP of +1.56% and a Zacks Rank #3.
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