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Friday's Energy Stocks: NextEra leads utility gains; energy sectors mixed

The SNL Energy Index capped the Friday, Jan. 27, trading session in the red, sliding 0.60% down to 286.67 as merchants extended their previous day's losses and midstream players relinquished gains reaped in the past trading sessions. The SNL Merchant Generator Index gave up 1.21% to 86.12 while the SNL Midstream Energy Index withered 1.22% to 126.44.

Broader markets, meanwhile, finished the trading day little-changed. The Dow Jones Industrial Average tripped 0.04% to 20,093.78, and the S&P 500 fell 0.09% to 2,294.69.

Taking in the largest gains among utilities, NextEra Energy Inc. climbed 2.21% in robust trading to finish at $121.37, after its 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.

During the company's earnings call, NextEra Chairman, President and CEO James Robo sought to reassure investors that the future for renewable power remains bright, and his company is well-positioned to hit earnings growth targets regardless of the various corporate tax reforms being floated by congressional Republicans and President Donald Trump.

NextEra Energy Partners shed 2.16% on more than three times the average volume to finish at $27.57, following an agreement with its sponsor NextEra Energy to amend the structure of the partnership's incentive distribution rights, or IDR.

NextEra Energy Partners declared a 15% increase to its annual distribution rate to $1.41 per share from the comparable annualized rate in 2015. The annual IDR fees based on the recently declared dividend are approximately $56 million per year. Going forward, any excess amount to the current annual distribution rate will be shared 75% to shareholders and 25% to IDR fees.

Among other utilities, AES Corp. rose 1.60% in brisk trading to $11.40, PNM Resources Inc. moved up 0.74% to $33.85 and American Electric Power Co. Inc. ticked up 0.53% on average volume to $62.97. The SNL Electric Company Index booked an increase of 1.05% to 423.82.

Shares of 8point3 Energy Partners LP tumbled 7.39% in about four times the average trading to settle at $13.66. Full-year earnings for the yieldco landed largely in line with analyst expectations for 2016, with adjusted EBITDA coming in at $76.19 million, according to the company's after market close earnings release on Jan. 26.

Enbridge Inc. declined 3.02% in heavy volume to $43.03 after one of its units agreed to acquire all the outstanding common units of Midcoast Energy Partners LP for $170.2 million, resulting in its privatization.

Midcoast partially owns Enbridge Energy Partners LP's natural gas gathering and processing business. When Midcoast pays out its quarterly distribution for the quarter ended Dec. 31, 2016, on Feb. 14, the subordination period for Midcoast's subordinated units owned by Enbridge Energy Partners will end, and the subordinated units will be converted into common units on a one-for-one basis.

Enbridge Energy Partners will shuffle its capital structure to help fund ongoing projects and improve cash flow including the deal with Midcoast. Midcoast Energy Partners slid 4.57% on more than 21 times the average volume to end at $8.35, while Enbridge Energy Partners plummeted 17.64% in almost nine times the normal trading volume to close at $21.33.

In other midstream stocks, Enbridge Energy Management LLC plunged 21.56% in active trading to $20.37, Spectra Energy Corp weakened 3.34% on strong volume to $42.00 and Williams Cos. Inc. saw a drop of 1.62% in below-average trading to 28.50.

Peabody Energy Corp. gave up 37.89% to $1.77 after securing court approval for several of its reorganization initiatives, paving the way for the company to take the next steps to emerge from its bankruptcy.

Alliance Resource Partners LP ascended 3.18% in strong trading to $24.35, Alliance Holdings GP LP inched forward 3.13% in weak trading to $29.01 and Foresight Energy LP withdrew 1.23% on light volume to $7.20. The SNL Coal Index edged up 0.12% to 79.60.

February natural gas futures turned positive as the contract rolled off the board at the close of business Friday, Jan. 27.

Market prices and index values are current as of the time of publication and are subject to change.