Yahoo Finance NextEra Energy Partners (NEP) Up 16.6% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for NextEra Energy Partners (NEP). Shares have added about 16.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is NextEra Energy Partners due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
NextEra Energy Partners Q1 Earnings Beat Estimates
NextEra Energy Partners, LP recorded first-quarter 2024 operating earnings of 75 cents per unit, which surpassed the Zacks Consensus Estimate of 12 cents by 525%. In the year-ago quarter, the firm reported a loss of 17 cents per unit.
Revenues
The firm’s operating revenues of $257 million missed the Zacks Consensus Estimate of $346 million by 25.7%. The figure, however, increased 4.9% from $245 million registered in the prior-year period.
Highlights of the Release
Total operating expenses were $278 million, down 0.7% from the year-ago quarter’s level of $280 million. This was due to lower operations and maintenance expenses, which totaled $123 million, down 15.8% from the prior-year quarter’s recorded figure of $146 million.
The firm reported an operating loss of $21 million compared with a loss of $35 million registered in the corresponding period of 2023.
Financial Condition
The firm had cash and cash equivalents of $245 million as of Mar 31, 2024, compared with $274 million as of Dec 31, 2023.
Long-term debt was $4.942 billion as of Mar 31, 2024, compared with $4.941 billion as of Dec 31, 2023.
Net cash provided by operating activities for the first three months of 2024 totaled $78 million compared with $82 million in the year-ago period.
Distribution Update
NEP declared a quarterly distribution of 89.25 cents per common unit to an annualized rate of $3.57 to its unit holders. This declaration reflects an annualized increase of 6% from its fourth-quarter 2023 distribution per common unit. It will be payable on May 15, 2024, to unit holders of record as of May 7, 2024.
Guidance
NextEra Energy Partners expects its run-rate for 2024 adjusted EBITDA to be in the $1.9-$2.1 billion range. It also anticipates CAFD to be in the band of $730-$820 million.
The firm continues to foresee 5-8% annual growth in limited partner distributions per unit, with a current target of 6% growth per year, as a reasonable range of expectations through at least 2026.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
The consensus estimate has shifted 31.96% due to these changes.
VGM Scores
At this time, NextEra Energy Partners has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
NextEra Energy Partners has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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NextEra Energy Partners, LP (NEP) : Free Stock Analysis Report
