While the COVID-19 outbreak had a significant impact on the U.S. economy during the second quarter, it didn't have much effect on electricity demand. That's why electric utility NextEra Energy (NYSE:NEE) was able to generate strong results. That kept the company well on track to deliver on its 2020 guidance and long-term growth objectives.

A look at NextEra Energy's second-quarter earnings

Metric

Q2 2020

Q2 2019

Year-Over-Year Change

Adjusted earnings

$1.286 billion

$1.133 billion

13.5%

Adjusted earnings per share

$2.61

$2.35

11.1%

Data source: NextEra Energy.

NextEra Energy benefited from strong results at its primary electric utility in Florida and its renewables-focused energy resource operations:

NextEra Energy's earnings by segment in the first quarter of 2020 and 2019.

Data source: NextEra Energy.

Earnings at leading Florida electric utility FPL grew by 13% year over year. The primary growth driver was the recent completion of several capital projects. One of the company's focuses has been cleaning up its generation profile by phasing out coal-fired power plants and replacing them with cleaner sources like natural gas and solar power. During the quarter, the company announced plans to retire its final coal plant in early 2022, which will make it the first utility to eliminate coal from its generation portfolio.

Gulf Power's earnings declined by 5% during the quarter. That was due to the weather and COVID-19, as some of the utility's customers couldn't pay their power bills because of the pandemic. The company partially offset those issues by continuing to reduce operating and maintenance costs, which have fallen 25% since its acquisition of Gulf Power in early 2019.

Finally, earnings at the company's energy resources segment jumped more than 15%. One of the big drivers was improved results at its existing power generation assets, thanks to strong wind resources. NextEra also benefited from new investments as it continued building out additional wind and solar energy facilities.

A field of solar panels with wind turbines in the background at dawn.

Image source: Getty Images.

What's ahead for NextEra Energy

NextEra Energy's strong second-quarter results kept the company well on track with its 2020 guidance. That forecast would see the company generate between $8.70 and $9.20 per share of adjusted earnings, about 7% above last year's total at the midpoint.

This forecast allowed the company to reaffirm its long-term earnings growth forecast of 6% to 8% per year through 2022. However, the company said it would be disappointed if its results didn't end up at or near the top end of that range. The utility continues to believe it can grow its dividend at a 10% annual rate through at least 2022.

One factor powering that forecast is the company's continued ability to secure and build new renewable energy projects. NextEra's energy resource segment added 1,730 megawatts (MW) of additional projects during the quarter, including wind (708 MW), solar (844 MW), and battery storage (178 MW). These new additions pushed the company's total project backlog to 14,400 MW, which is the largest it has had in its 20-year development history. To put that size into context, it's bigger than the total currently operating wind and solar portfolios of all but two other companies in the world.

NextEra Energy's future remains bright

NextEra Energy's operations have been almost entirely immune to the COVID-19 outbreak, so it's on track to deliver strong earnings and dividend growth this year and well into the future. That should provide the utility with the power to continue generating above-average total returns for its investors.