NextEra Energy, the world’s largest producer of wind and solar power, reported better-than-expected earnings for the second quarter of 2023, driven by strong growth in its clean energy business. The company also raised its guidance for the full year and announced a new goal to eliminate carbon emissions from its operations by 2030.
NextEra Energy Resources Leads the Way
NextEra Energy Resources, the company’s unregulated subsidiary that develops and operates renewable energy projects, added nearly 2,020 megawatts of new renewables and storage projects to its backlog in the second quarter. The unit also signed contracts for more than 1,600 megawatts of wind, solar and battery storage projects with various customers, including Sysco, the foodservice leader.
The company said it is benefiting from a clean energy investment push that has received major public policy support in recent months, such as the Inflation Reduction Act signed by President Joe Biden in 2022. The act provides financial incentives for green hydrogen production, which NextEra Energy is pursuing as a potential source of low-carbon fuel for power generation and transportation.
NextEra Energy Resources reported an adjusted net income of $1.2 billion for the second quarter, up 18% from the same period last year. The unit accounted for more than half of the company’s total earnings.
Florida Power & Light Continues to Expand Solar Portfolio
Florida Power & Light, the company’s regulated utility arm that serves about 5.6 million customers in the state, also delivered strong results in the second quarter. The utility increased its solar portfolio to 4,600 megawatts, the largest of any utility in the country. It also announced plans to add nearly 20 gigawatts of new solar capacity by 2030, doubling the amount in last year’s approved plan.
The utility said it is expanding its cost-effective solar and storage projects to provide a valuable hedge for its customers against volatile natural gas prices and meet the electricity demand of its growing customer base. Natural gas prices surged following Russia’s invasion of Ukraine in 2022 and have remained high since then.
Florida Power & Light reported a net income of $1.1 billion for the second quarter, up 10% from the same period last year. The utility added about 65,000 new customers in the quarter, reflecting Florida’s population growth and economic recovery.
NextEra Energy Sets Industry-Leading Real Zero Goal
NextEra Energy also announced a new goal to eliminate carbon emissions from its operations by 2030, which it calls Real Zero. The company said it will achieve this goal by investing in more renewable energy and storage projects, retiring its remaining coal-fired plants, reducing methane emissions from its natural gas infrastructure, and increasing its use of green hydrogen and other low-carbon fuels.
The company said Real Zero is different from net zero, which allows companies to offset their emissions by purchasing carbon credits or investing in carbon capture and storage technologies. NextEra Energy said Real Zero is more ambitious and transparent, as it aims to reduce its actual emissions to zero without relying on offsets or credits.
The company said Real Zero will not only benefit the environment, but also enhance its competitive advantage and create value for its shareholders. NextEra Energy expects to grow its adjusted earnings per share by 6% to 8% annually through 2023 and beyond, based on its strong pipeline of clean energy projects and opportunities.
NextEra Energy Stock Surges on Earnings Beat and Guidance Hike
NextEra Energy stock rose more than 5% on Tuesday after the company reported its second-quarter earnings and raised its guidance for the full year. The company earned $0.84 per share on an adjusted basis, beating analysts’ average estimate of $0.72 per share. The company also increased its adjusted earnings per share guidance for 2023 to a range of $3.05 to $3.25, up from $2.90 to $3.15 previously.
Analysts praised NextEra Energy’s performance and outlook, saying that the company is well-positioned to capitalize on the growing demand for clean energy and benefit from favorable regulatory policies. They also noted that NextEra Energy’s dividend yield of 2.4% is attractive compared to other utilities and renewable energy companies.
NextEra Energy stock has gained more than 20% year-to-date, outperforming the S&P 500 index and the utilities sector. The company has a market capitalization of about $200 billion, making it one of the most valuable energy companies in the world.