NextEra Energy Inc. (NEE) said Bank of America Corporation (BAC), the largest U.S. lender, has agreed to invest $177 million in a tax-equity transaction linked to a wind farm project of its business unit, NextEra Energy Resources LLC.
As part of the transaction, NextEra Energy sold Class B membership interests in White Oak Energy Funding LLC, a 150 megawatt wind energy project located in Illinois, to the bank. The company said the transaction will comprise of two fundings.
The White Oak project is expected to qualify for a cash grant under section 1603 of the American Reinvestment and Recovery Act. This is NextEra Energy's first tax-equity transaction which includes cash grant as a component.
Based in Juno Beach, Florida, NextEra Energy Inc. through its subsidiaries engages in the generation, transmission, distribution and sale of electric energy in Florida. The company competes with Progress Energy Inc. (PGN) and Southern Company (SO).
NextEra reported 2011 operating earnings of 94 cents per share, at par with the year-ago quarter. The results of the company lay below the Zacks Consensus Estimate.
As of March 31, 2011, NextEra had $425 million in cash and cash equivalents, up 40.7% from $302 million as of December 31, 2010. Long-term debts of the company were $18.3 billion with a debt-to-equity ratio of 47%.
NextEra Energy expects its 2011 earnings to be in the range of $4.35 to $4.65 per share. The company also expects earnings to grow at an average rate of 5% to 7% from 2011 through 2014. The Zacks Consensus Estimates for second-quarter 2011, fiscal year 2011 and fiscal year 2012 are $1.07 per share, $4.47 per share and $4.74 per share, respectively.
We maintain our Neutral recommendation on NextEra Energy. The quantitative Zacks #3 Rank (short-term Neutral rating) for the company indicates no clear directional pressure on the stock over the near term.
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