FPL Group Ahead of Expectations - Analyst Blog

Power producer FPL Group Inc. (FPL) reported better-than-expected fourth quarter results, helped by a robust performance from its utility subsidiary on the back of favorable weather conditions. Adjusted net earnings came in at 79 cents per share, 6 cents above the Zacks Consensus Estimate.

However, on a year-over-year basis, FPL Group’s adjusted earnings per share was down approximately 12.2%, hurt by a planned outage at one of its nuclear plant, a poor wind resource across its fleet of wind turbines, and unfavorable market conditions in the Texas region. Total revenue during the quarter declined to $3,658 million from $4,003 million a year ago.

Florida Power & Light Company

Revenue at Florida Power & Light Company (FPL Group's rate-regulated utility subsidiary) declined 2.4% year-over-year to $2,753 million. However, net income was up 23.2% to $186 million, primarily due to the favorable impact of unseasonably warm weather that led to a 7.7% rise in retail electricity sales. Total number of customers remained essentially unchanged compared with the prior-year period.

NextEra Energy Resources

NextEra Energy Resources’ (the competitive energy subsidiary of FPL Group) revenue in the quarter was down 24.1% from last year at $864 million. The unit’s earnings (on an adjusted basis) decreased 30.3% from the fourth quarter of 2008 to $152 million.

NextEra Energy Resources continued to make progress on its wind development program during the quarter. The company’s wind program include 985 megawatts (MW) of newly built projects in Colorado, Illinois, Iowa, North Dakota, Oklahoma and Oregon, along with the purchase from Babcock & Brown of 185 megawatts of operating wind projects in South Dakota, Texas and Wisconsin. In total, NextEra Energy added 1,170 MW of wind power in North America during 2009.

Guidance

FPL Group lowered the upper end of its 2010 adjusted earnings guidance from $4.85 to $4.65. The company now expects earnings in the range of $4.25 – $4.65 per share for the year, as it sees a slow recovery of the Florida economy. Management further said that it expects continued moderation in natural gas prices, and is looking to add another 1,000 MW to its U.S.-leading wind portfolio in 2010.

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