NextEra Energy Partners, LP NEP is set to unveil its fourth-quarter 2023 results on Jan 25, prior to market open, hot on the heels of an earnings surprise of 18.8% in the previous quarter.
Let’s dive into the factors likely to impact the impending quarterly results.
Factors Driving Performance
The firm’s fourth-quarter earnings could see a boost from the sustained expansion of its top-notch portfolio of renewable energy sources. Notably, the commencement of commercial operations of Yellow Pine Solar, a 125 MW solar power plant, and a 65-MW storage facility in Nevada during the third quarter is anticipated to have contributed favorably to NextEra Energy Partners’ fourth-quarter performance.
Furthermore, the firm continues to enjoy structural tax advantages, potentially mitigating meaningful U.S. tax obligations for the next 15 years. This could have further bolstered its fourth-quarter earnings. However, the impact of higher interest rates might have offset some of these positives in the to-be-reported quarter.
Q4 Expectations
The Zacks Consensus Estimate for NextEra Energy Partners’ earnings stands at 4 cents per unit, indicating a significant year-over-year decline of 90%. Meanwhile, the same for revenues is pegged at $369.2 million, denoting an impressive 38.8% annualized growth.
What Our Quantitative Model Predicts
Despite the historical significance of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) likely leading to an earnings beat, our proven model does not conclusively predict a similar outcome for NextEra Energy Partners this time around. Specifically, NEP’s Earnings ESP is 0.00% while it currently carries a Zacks Rank #4 (Sell).
Stocks to Consider
Here are a few key players in the same sector likely to register an earnings beat this reporting cycle.
CNX Resources CNX, expected to report fourth-quarter results on Jan 25, before market open, has an Earnings ESP of +3.25% and a Zacks Rank #3 at present. The company boasts a long-term (three to five years) earnings growth rate of 5.56% and has delivered an average earnings surprise of 67.6% in the last four quarters.
Another player, Plains All American Pipeline PAA, forecast to divulge its fourth-quarter results on Feb 9, before market open, holds an Earnings ESP of +6.12% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for PAA’s earnings is pegged at 37 cents per unit, while the firm has an average earnings surprise of 18.3% in the last four quarters.
Lastly, ONEOK OKE, likely to announce fourth-quarter results on Feb 26, after market close, has an Earnings ESP of +20.78% and a Zacks Rank #3 at present. OKE’s long-term earnings growth rate is 7.64% and it has an average earnings surprise of 6% in the last four quarters.
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