NextEra shares tumble as revenue misses, head of key unit leaves
Reuters
Published Jan 25, 2023 07:42AM ET
Updated Jan 25, 2023 02:41PM ET
(Reuters) -NextEra Energy Inc on Wednesday posted mixed quarterly results, sending its shares sliding as the renewable power company announced the retirement of the head of its key Florida utility unit.
NextEra, the largest generator of renewable energy in the United States, fell short of Wall Street's revenue estimates, though executives said recent U.S. legislation should cause in renewables to surge in coming years.
NextEra's shares dropped 6% on Wednesday, making the company one of the day's biggest losers in the Standard & Poor's 500 Index. The company is the third-largest U.S. energy company by market value, trailing only oil and gas giants Exxon Mobil (NYSE:XOM) and Chevron Corp. (NYSE:CVX)
Juno Beach, Florida-based NextEra's fourth-quarter revenue of $6.16 billion fell short of Wall Street estimates of $6.55 billion, according to Refinitiv data. Adjusted profit of 51 cents per share, however, beat estimates of 49 cents per share.
The company said Eric Silagy, head of NextEra subsidiary Florida Power & Light (FPL), America's largest electric utility, would retire after more than 11 years at the helm. He will be succeeded by Armando Pimentel.
A political watchdog group filed a complaint last year with the U.S. Federal Election Commission, saying FPL violated Florida election laws. NextEra CEO John Ketchum said an internal review should show FPL would not be liable for violating any laws, but added that this and other issues may have contributed to Silagy's retirement.
"When you think about all the challenges that he had to overcome with the hurricanes and with high natural gas prices and inflation in the supply chain and the media allegations and all those things ... I think it took a toll," he told analysts on the conference call.
Previous executives had generally served for about a decade, Silagy said on the call.
Analysts at Morningstar said the decline in shares on Wednesday could be related to Silagy's retirement and regulatory uncertainty.
The company's clean energy unit logged its best year for new renewables and storage growth, adding more than 8,000 megawatts to its backlog. NextEra is banking on increased use of renewable energy like solar and wind for power generation amid a global push to shift to cleaner fuel sources.
That move accelerated last year following sanctions on Russia due to its invasion of Ukraine, which sent gas and oil prices soaring. The U.S. Inflation Reduction Act should increase spending on renewable projects, Ketchum said.
"We anticipate a tremendous acceleration of growth in renewables and storage deployment across the U.S. due in part to the IRA, particularly in the latter half of the decade," he said.
Get The News You Want
The power sector last year was battered by extreme weather conditions. NextEra was hit by $53 million in storm restoration costs during the quarter.
Natural gas prices averaged $6.10 per million British thermal units (mmBtu) in the October-December quarter, about 26% higher than the previous year.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.