A month has gone by since the last earnings report for NextEra Energy (NYSE:NEE) Partners (NEP). Shares have added about 8.2% 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 Q4 Earnings Top, Revenues Miss
NextEra Energy Partners, LP’s fourth-quarter 2019 earnings of 50 cents per unit, surpassed the Zacks Consensus Estimate of 44 cents by 13.6%. However, in the year-ago quarter, the partnership incurred a loss of 39 cents.
Revenues
In the quarter under review, the firm generated revenues worth $206 million, missing the Zacks Consensus Estimate of $327 million by 37%. However, the top line improved 32.9% on a year-over-year basis. This upside can be attributed to higher sales in the Renewable energy sales segment.
Highlights of the Release
In the quarter under review, NextEra Energy Partners’ total adjusted operating expenses were $163 million, up 31.5% from the year-ago figure of $124 million
During the year, the partnership acquired more than 600 megawatts of new wind and solar projects as well as Meade Pipeline Co LLC.
Financial Condition
NextEra Energy Partners had cash and cash equivalents of $128 million as of Dec 31, 2019 compared with $147 million as of Dec 31, 2018.
Long-term debt was $4,132 million as of Dec 31, 2019 compared with $2,728 million as of Dec 31, 2018.
Net cash provided by operating activities for 2019 was $346 million, lower than $362 million provided in 2018.
Guidance
For 2020, the firm expects a run rate for cash available for distribution (CAFD) in the range of $505-$585 million (excluding all contributions from the Desert Sunlight projects).
The partnership continues to expect 12-15% per year growth for limited partner distributions through 2024. It expects the annualized rate of fourth-quarter 2020 distribution within $2.40 - $2.46 per common unit.
How Have Estimates Been Moving Since Then?
Estimates revision followed a downward path over the past two months. The consensus estimate has shifted -6.25% due to these changes.
VGM Scores
Currently, NextEra Energy Partners has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. 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 #3 (Hold). We expect an in-line return from the stock in the next few months.
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