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NextEra Energy's Q2 Profit Estimates Fall Short Amid Rising Expenses
NextEra Energy has reported results below profit estimates for the second quarter, primarily due to increased interest rates and elevated expenses within its renewables division. The rise in interest rates, initiated by the U.S. Federal Reserve last year to control inflation, has significantly impacted the utilities sector. These higher rates have made dividend-yielding stocks such as REITs and utilities, often referred to as bond proxies, less appealing to investors while simultaneously raising borrowing costs.
Impact of Rising Interest Rates
The company revealed that its interest expenses have surged to $802 million in the second quarter, compared to just $135 million during the same period last year. This sharp increase has taken a toll on the financial health of the world's largest renewables firm.
Revenue Decline
NextEra Energy's revenue for the quarter experienced a significant dip of about 17%, dropping to $6.07 billion from the previous year's figures. This revenue figure fell short of the $7.36 billion estimated by LSEG.
Quarterly Profit
On an adjusted basis, the company posted a profit of 96 cents per share, which was below the anticipated 98 cents per share as projected by LSEG data.
Future Earnings Forecast
Despite the current challenges, NextEra Energy has not altered its forecast for adjusted earnings per share for 2024, maintaining a projected range between $3.23 and $3.43 per share.
