• Adjusted Earnings Per Share (EPS): Increased by 8.3% year-over-year.

• Regulatory Capital Employed Growth: Approximately 11.5% year-over-year.

• Capital Expenditures: Approximately $2.3 billion for the quarter.

• Reported Return on Equity (ROE): Approximately 11.8% for regulatory purposes.

• Reserve Amortization: Utilized approximately $572 million, leaving a balance of roughly $651 million.

• New Solar Capacity: 1,640 megawatts placed into service.

• New Renewables and Storage Projects: Added 2,765 megawatts to the backlog.

• Adjusted Earnings Growth (Energy Resources): Approximately 13.1% year-over-year.

• New Investments Contribution: Increased $0.15 per share year-over-year.

• Interest Costs: Increased by $0.07 per share, half related to new borrowing.

• Adjusted EBITDA (NextEra Energy Partners): $462 million.

• Cash Available for Distribution (NextEra Energy Partners): $164 million.

• Warning! GuruFocus has detected 5 Warning Signs with NEE.

Release Date: April 23, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Q & A Highlights

Q: Could you discuss how you're positioned to handle potential AD/CVD cases related to solar panels and the removal of the bifacial panel tariff exemption? A: John W. Ketchum, President, CEO & Chairman of NextEra Energy, explained that any potential trade actions would be manageable. The company has diversified suppliers and contractual protections to ensure timely delivery. The U.S. solar panel market is robust, with significant growth in domestic manufacturing capacity, which provides a strong buffer against potential trade disruptions. Ketchum also noted that the removal of the bifacial exemption would have minimal impact on NextEra, as they have contracted their panel needs through February 2026.

Q: How is the demand for data centers influencing your backlog, and what are the expectations for long-term partnerships or agreements in this area? A: John W. Ketchum highlighted the significant demand from data centers, driven by a 15% CAGR in data center demand through the end of the decade. NextEra Energy has a strong track record with data center customers, offering integrated solutions that address their specific needs for low-cost energy, decarbonization, and strategic location. Ketchum emphasized the company's competitive advantage in meeting these demands, particularly with renewable energy solutions.

Q: Are there any updates or potential resolutions regarding the capital structure challenges faced by NextEra Energy Partners (NEP), especially considering the current capital market pressures? A: John W. Ketchum mentioned ongoing discussions about a private capital raise as a potential solution for NEP's capital structure challenges. However, he indicated that there might not be significant updates on this matter at the upcoming Analyst Day, suggesting that discussions are still in progress without a definitive resolution at this time.

Q: With the strong growth in solar and storage in your backlog, are there any implications for your financial guidance given the weaker performance in wind? A: Rebecca J. Kujawa, President & CEO of NextEra Energy Resources, reassured that the company remains comfortable with its development expectations and financial guidance. She noted that changes in technology mix are expected and that incentives introduced by the IRA have made solar and storage more attractive. Kujawa emphasized the company's ability to deliver attractive returns across all technologies.

Q: Can you discuss the role of battery storage in meeting growing electricity demands and its economic attractiveness? A: Armando Pimentel, CEO & President of Florida Power & Light Company, highlighted the increasing role of battery storage in their strategy, noting that the company has doubled its storage plans to 4 gigawatts in the next decade. Pimentel pointed out the economic benefits of integrating storage with solar to meet customer needs effectively and economically.

Q: How quickly can renewable generation ramp up to meet the increasing electricity demand, especially from data centers and other industrial growth? A: Rebecca J. Kujawa acknowledged the challenges in ramping up renewable generation quickly due to the long lead times typically associated with electrical infrastructure projects. However, she expressed confidence in NextEra Energy's preparedness and competitive advantages, which position the company well to meet long-term electricity demands across various sectors.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.