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NextEra CEO Expects Strong Earnings to Beat Expectations in the Next Three Years

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NextEra Energy (NYSE:NEE) experienced a significant boost in its stock price, surging 7% in Tuesday’s trading session. This surge comes after the company reported better-than-expected adjusted earnings for Q3, despite a $900 million impairment charge.

During NextEra Energy’s post-earnings conference call, CEO John Ketchum shared an optimistic outlook. He stated that he expects the company’s financial results to either meet or exceed its adjusted EPS expectations through 2026.

NextEra Energy also revealed its plans to transfer approximately $400 million in tax credits this year, with expectations of this figure growing to $1.6-1.8 billion by 2026.

Renewable energy projects, particularly solar and wind, are thriving despite higher interest rates. Raymond James analyst Pavel Molchanov noted that solar newbuilds are at a record high, while wind newbuilds are nearing an all-time peak.

In Q3 alone, NextEra Energy added 3.2 gigawatts (GW) to its renewable energy project backlog, surpassing the 1.7 GW added in Q2 and the 2 GW added in Q1.

Molchanov highlighted the significance of falling hardware costs, remarking that they have offset the impact of higher interest rates. He emphasized that the cost of capital is not the sole determining factor in the success of renewable energy projects.

Prior to the conference call, concerns arose regarding increased competition and higher interest rates potentially hindering NextEra’s renewable business. However, Edward Jones analyst Mike Doyle expressed relief that record originations on the renewable side and an increased backlog of projects dispelled these concerns.

Doyle also commented on the impressive performance of NextEra Energy’s utility business, predicting that it will exhibit strong growth compared to other pure utilities in the future.

Wind farm at sunset.
Image Source: inakiantonana/E+ via Getty Images

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