What happened
NextEra Energy (NEE 1.17%) reported its first-quarter 2022 earnings yesterday, and its stock has been tumbling ever since. The energy company that runs the Florida Power & Light utility, as well as a growing renewable-energy subsidiary, had a good start to the year, but investors sold shares anyway. The selling continued today, with shares down 2.2% as of 2:14 p.m. ET. That's on top of yesterday's 6.5% decline.
So what
NextEra grew its earnings per share (EPS) 10.4% year over year and said it believes it is on track to achieve its growth target for earnings and distributions for the year. But investors likely hoped the company would raise its prospects for the year after such a strong quarter of growth. Also, uncertainty surrounding a Commerce Department decision on solar panels and cells supplied from Asia may cause the company to delay some projects.
Image source: Getty Images.
Now what
In its conference call with investors, NextEra Executive Vice President and CFO Kirk Crews explained that the U.S. Department of Commerce initiated a review earlier this month related to an antidumping and countervailing duty-circumvention claim on solar equipment coming from four Southeast Asian countries. While NextEra believes the countries aren't included in rulings related to Chinese solar cell imports, the lack of resolution is having consequences on NextEra's ongoing plans.
Crews summed up the situation, telling investors the uncertainty means "we believe that approximately 2.1 to 2.8 gigawatts of our expected 2022 solar and storage build may shift from 2022 to 2023." The company doesn't believe it will affect its overall construction plans through 2024, but the uncertainty is having near-term consequences.
The company still expects to grow its dividend payments to shareholders at a 10% annual rate through 2024 off of the 2022 base, however. Long-term shareholders should be happy about that outlook and the strong first quarter. Also, planned wind power projects will continue to proceed, but some investors may have decided to reallocate shorter-term funds until the overall solar project outlook clears.
