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NextEra's adjusted earnings for Q4, FY'16 grow, but miss Street estimates

NextEra Energy Inc.'s quarterly adjusted earnings failed to beat analyst estimates even as they grew year over year.

The company reported fourth-quarter 2016 adjusted earnings of $566 million, or $1.21 per share, up from $539 million, or $1.17 per share, in the same period of 2015. The S&P Capital IQ consensus normalized EPS estimate was $1.29 for the 2016 fourth quarter.

Due to continued investment to modernize generation and improve the grid, principal rate-regulated utility Florida Power & Light Co. contributed adjusted earnings of $371 million, or 79 cents per share, in the fourth quarter of 2016, compared with $365 million, or 79 cents per share, in the prior-year period.

The competitive energy business NextEra Energy Resources LLC, meanwhile, booked fourth-quarter 2016 adjusted earnings of $191 million, or 41 cents per share, compared with $185 million, or 40 cents per share, in the same 2015 quarter.

NextEra's operating revenues fell to $3.70 billion in the fourth quarter of 2016, from $4.07 billion a year ago, while its operating income grew to $926 million from $876 million.

On a GAAP basis, NextEra reported fourth-quarter 2016 net income attributable to the company of $966 million, or $2.06 per share, compared with $507 million, or $1.10 per share, in the corresponding 2015 quarter.

Like its quarterly results, NextEra missed analyst expectations for its full-year adjusted earnings despite increases in 2016.

The company recorded adjusted earnings of $2.88 billion, or $6.19 per share, in 2016, compared with $2.60 billion, or $5.71 per share, in 2015. The S&P Capital IQ consensus normalized EPS estimate was $6.22 for full-year 2016.

"We grew 2016 adjusted earnings per share by 8.4 percent and delivered total shareholder return of 18.4 percent that not only beat the S&P Utility Index, but also the S&P 500," NextEra Chairman and CEO Jim Robo said.

FPL's adjusted earnings increased to $1.73 billion, or $3.71 per share, in 2016, from $1.65 billion, or $3.63 per share, in 2015, while NextEra Energy Resources' earnings grew to $1.09 billion from $926 million.

NextEra's operating revenues dropped to $16.16 billion in 2016, from $17.49 billion in 2015, and operating income fell to $4.61 billion from $4.63 billion year over year.

On a GAAP basis, NextEra Energy reported net income attributable to the company of $2.91 billion, or $6.25 per share, in 2016, compared with $2.75 billion, or $6.06 per share, in 2015.

"Our performance during 2016 was strong both financially and operationally, highlighted by outstanding execution on our initiatives all across the board," said Robo.

NextEra continues to target adjusted EPS in the range of $6.35 to $6.85 for 2017, but raised its guidance range for 2018 to $6.80 to $7.30 from $6.60 to $7.10.

The company said it is extending financial expectations by two years from 2018 to 2020, due to strength and diversity of its growth prospects. NextEra expects a compound annual growth rate in adjusted earnings per share to be in a range of 6% to 8% through 2020, off a 2016 base.