NextEra Energy (NYSE:NEE) delivered another strong year operationally as well as financially in 2019. Overall, the clean energy focused utility grew its adjusted earnings per share by 8.7% versus 2018, which was above the top end of its 6% to 8% guidance range. That gave the company the power to generate a high-end total return of 43%, which outpaced both the S&P 500 Utility Index as well as the broader S&P 500

Digging into the numbers

Metric

Q4 2019

Q4 2018

YOY  Change (Decline)

Adjusted earnings

$706 million

$718 million

(1.7%)

Adjusted earnings per share

$1.44

$1.49

(3.4%)

Data source: NextEra Energy. YOY = year over year.

While NextEra's earnings slipped slightly against the year-ago period, they were enough to push its full-year total to $4.06 billion, or $8.37 per share, which came in above its guidance. Overall, the company generated solid results across its three operating segments:

NextEra's earnings by segment in the fourth quarter of 2019 and 2018.

Data source: NextEra Energy. Chart by author.

Earnings within Florida Power & Light, which is the largest rate-regulated electric utility in the country, declined slightly versus the year-ago period, due mainly to storm restoration costs. The segment's full-year earnings, meanwhile, rose 7.5% thanks to the roughly $5.8 billion the company spent to expand those operations, which helped it add 100,000 new customers during the fourth quarter.

Gulf Power, which the company acquired last year, generated solid results during the quarter, pushing its full-year adjusted earnings to $200 million, up 25% versus 2018. The company made excellent progress in integrating that business, which helped reduce its operating and maintenance costs by 20% during the year.

Finally, the company's energy resource segment produced solid results as earnings rose slightly to $326 million. For the full year, the renewable energy and gas pipeline business generated $1.7 billion, or $3.49 per share, of adjusted earnings, up 11% on a per-share basis. Powering that growth was the 2,700 megawatts (MW) of renewable energy projects the company completed last year.

Solar panels with a bright sun in the background.

Image source: Getty Images.

A look at what's ahead

NextEra's strong showing in 2019 gave it the confidence to reaffirm its long-term outlook of growing its adjusted earnings by 6% to 8% per year through 2022. CEO Jim Robo stated in the earnings release that he would "be disappointed if we are not able to deliver financial results at or near the top end of our adjusted earnings per share expectations ranges in 2020, 2021 and 2022, while at the same time maintaining our strong credit ratings."

For 2020, NextEra expects earnings growth in that 6% to 8% range, plus an additional $0.15 per share of accretion from Gulf Power as it benefits from its cost savings. That implies adjusted earnings should be between $8.70 and $9.20 per share this year. 

One of the factors powering the company's optimism is the rate at which it's securing new renewable energy investments. Its energy resources segment added more than 5,800 MW of wind and solar projects during the year, including 1,609 MW since late October. The annual total more than replaced the 2,700 MW of projects it commissioned.

It's also worth noting that NextEra continues to secure solar projects backed by battery storage. It added 770 MW of new solar in the last couple of months, along with 340 MW of battery storage backing solar, compared with about 500 MW of wind. That lines up with its outlook for a quickening pace of new solar development thanks to the falling costs of energy storage.

A utility stock for the long haul

NextEra continues to deliver on its strategy to build one of the cleanest utilities in the world by focusing on developing renewable energy projects. With a large backlog of growth ahead, NextEra has the power to continue generating high-end results. That should enable the company to keep growing its dividend as well as shareholder value.