NextEra Energy (NEE) Q3 2026 Earnings Call Transcript

Motley Fool Transcribing, The Motley FoolWed, October 21, 2026 at 6:57 PM UTC

0

Image source: The Motley Fool.DATE

Wednesday, Oct. 21, 2026

CALL PARTICIPANTS -

Director of Investor Relations - Michael Dowling

Chairman, President, and Chief Executive Officer of NextEra Energy - John Ketchum

Executive Vice President and Chief Financial Officer of NextEra Energy - Mike Dunne

Vice Chairman of NextEra Energy - Armando Pimentel

President and Chief Executive Officer of Florida Power & Light Company - Scott Bores

President and Chief Executive Officer of NextEra Energy Resources - Brian Bolster

Executive Vice President of NextEra Energy - Mark Hickson

TAKEAWAYS -

Adjusted EPS -- $1.24, representing a 9.7% increase year over year driven by strong financial and operational performance across the business segments.

FPL Net Income -- $1.62 billion, compared to $1.463 billion in the prior-year quarter, primarily reflecting continued disciplined capital investments.

Energy Resources Adjusted Earnings -- $1.247 billion, an increase of 13% year over year supported by new investments and more normalized wind resources.

Renewables and Storage Backlog -- 36.7 gigawatts, after adding 3.7 gigawatts in the third quarter and placing 1.8 gigawatts into commercial service.

Battery Storage Origination -- 2.4 gigawatts, marking the fourth consecutive quarter Energy Resources added more than 3.5 gigawatts of total renewables and storage to its backlog.

Regulated Capital Employed -- 9.2% growth at FPL year over year, driven by approximately $2.4 billion in quarterly capital expenditures.

Transmission and Gas Portfolio -- $12.7 billion in invested capital and secured expenditures, an increase of approximately 25% since December 2025.

Federal Hub Projects -- 16.5 gigawatts across three signed agreements, which have secured $5.7 billion in initial funding year to date to support development and construction.

FPL Retail Sales -- 2.8% increase year over year, or 1.4% on a weather-normalized basis, reflecting continued customer growth in Florida.

Large Load Pipeline -- 20 gigawatts of advanced projects, including over 18 gigawatts of gas-fired generation intended to serve data center demand.

FPL Large Load Target -- 8 gigawatts by 2032, an increase from the previous 6-gigawatt expectation due to high customer interest.

Renewable Recontracting -- 1,400 megawatts of projects recontracted year to date at an average premium of approximately $20 per megawatt hour over recent realized pricing.

Duane Arnold Restart -- $1.9 billion loan closed with the Department of Energy to support the recommissioning of the nuclear plant by the first quarter of 2029.

Interest Rate Hedging -- $48 billion forward starting program with an average rate of approximately 4% to mitigate financing risk for future projects.

Equity Needs -- $12 billion to $17 billion in total expected issuances through 2032 to support the long-term capital investment plan.

Dominion Energy Combination Commitments -- $2 billion in proposed rate credits and $100 million in additional customer bill assistance through 2038 for Virginia customers.

Workforce Expansion -- 1,000 total new jobs committed to Virginia, including 600 from NextEra Energy and 400 from secured letters of intent with suppliers.

Full Year FPL Investment -- $12 billion in expected capital expenditures for 2026 to support grid resiliency and clean energy infrastructure.

Storm Restoration Cost Avoidance -- 140,000 outages avoided during Hurricane Isaias due to smart grid technology and a stronger grid.

Operating Cash Flow -- Expected to grow at or above the adjusted earnings per share compound annual growth rate through 2032.

Need a quote from a Motley Fool analyst? Email pr@fool.com

RISKS -

Ketchum stated, "The high end of that range also includes the El Niño impacts that we expect to occur on our wind facilities in Q4 of this year," noting that wind generation is projected to fall to 90% to 95% of the long-term average during that period.

NextEra Energy, Inc. (NYSE:NEE) reported a 9.7% increase in adjusted earnings per share for the third quarter, supported by a 9.2% increase in regulatory capital employed at Florida Power & Light and 13% growth in adjusted earnings at NextEra Energy Resources. Management emphasized the execution of a multiyear growth plan centered on meeting accelerating power demand through a 20-gigawatt large load project pipeline and the expansion of the renewables backlog to nearly 37 gigawatts. The company is progressing toward its pending combination with Dominion Energy, having secured shareholder approval and establishing procedural schedules for state regulatory reviews expected to conclude in early 2027. Management maintained its 2026 adjusted earnings guidance while targeting the high end of the range, despite projected weather-related headwinds in the wind portfolio.

Management confirmed that federal hubs are expected to generate approximately 50% of the adjusted earnings per share that Energy Resources would receive if it owned the projects, despite the company investing no capital in these facilities.

CEO Ketchum noted that Energy Resources has the opportunity to build and own an incremental 6 gigawatts to 11 gigawatts of battery storage to support data center load at these federal hub sites.

The company executed a 20-year power purchase agreement for 1 gigawatt of the Point Beach nuclear asset, ensuring the facility is contracted into the 2050s.

CFO Dunne reported that a 50 basis point move in interest rates would only impact 2028 adjusted earnings per share by $0.01 to $0.03, representing less than 1% of expected earnings.

Management stated that FPL's typical residential bill remains 37% below the national average, with a projected average annual increase of only 2% through 2030.

The company closed a $1.9 billion loan with the Department of Energy to facilitate the restart of the Duane Arnold nuclear plant in Iowa by early 2029.

The proposed merger with Dominion Energy includes a $5 billion Virginia supplier program and the creation of a new shareholder-funded co-headquarters in Richmond.

INDUSTRY GLOSSARY -

ERCOT: Electric Reliability Council of Texas, the organization that operates the state's electrical grid and manages the deregulated market for 75% of Texas.

Federal Hub: NextEra Energy's term for large-scale energy infrastructure projects where the company earns development, construction, and operation fees without investing its own capital.

FPL: Florida Power & Light Company, the largest electric utility in the United States and a subsidiary of NextEra Energy.

Gigawatt (GW): A unit of power equal to 1,000 megawatts, often used to measure the capacity of large power plants or energy portfolios.

MISO: Midcontinent Independent System Operator, a regional transmission organization that manages the power grid across several U.S. states and Manitoba, Canada.

NextEra Energy Resources: The competitive energy subsidiary of NextEra Energy, focusing on renewable energy and clean infrastructure.

PPA: Power Purchase Agreement, a long-term contract between an electricity generator and a customer to buy power at a fixed price.

Rate Stabilization Mechanism: An accounting process at FPL used to manage earnings and customer rates by amortizing or reversing regulatory credits.

SMR: Small Modular Reactor, a type of advanced nuclear reactor that is smaller and more flexible than traditional large-scale nuclear plants.

Full Conference Call Transcript

Operator: Good morning, and welcome to the NextEra Energy Inc. third quarter 2026 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Michael Dowling, Director of Investor Relations. Please go ahead.

Michael Dowling: Good morning, everyone, and thank you for joining our third quarter 2026 financial results conference call for NextEra Energy. With me this morning are John Ketchum, Chairman, President, and Chief Executive Officer of NextEra Energy; Mike Dunne, Executive Vice President and Chief Financial Officer of NextEra Energy; Armando Pimentel, Vice Chairman of NextEra Energy; Scott Bores, President and Chief Executive Officer of Florida Power & Light Company; Brian Bolster, President and Chief Executive Officer of NextEra Energy Resources; and Mark Hickson, Executive Vice President of NextEra Energy. John will start with opening remarks, and then Mike will provide an overview of our results. Our executive team will then be available to answer your questions.

We will be making forward-looking statements during this call based on current expectations and assumptions, which are subject to risks and uncertainties. Actual results could differ materially from our forward-looking statements if any of our key assumptions are incorrect or because of other factors discussed in today's earnings news release, in the comments made during this conference call, in the Risk Factors section of the accompanying presentation, or in our latest reports and filings with the Securities and Exchange Commission, each of which can be found on our website, www.nexteraenergy.com. We do not undertake any duty to update any forward-looking statements. Today's presentation also includes references to non-GAAP financial measures.

You should refer to the information contained in the slides accompanying today's presentation for definitional information and reconciliations of historical non-GAAP measures to the closest GAAP financial measure. With that, I will turn the call over to John.

John Ketchum: Thanks, Michael, and good morning, everyone. NextEra Energy delivered strong third-quarter results with adjusted earnings per share increasing 9.7% year over year. Through the first 9 months of the year, our adjusted earnings per share has increased 9.5% year over year. The continued strong financial and operational performance at both FPL and Energy Resources positions our company well to meet its overall objectives for the year. Before I turn to the progress we have made executing against our broader strategy, I want to spend a moment on Hurricane Isaias. FPL continues to stand shoulder to shoulder with our communities throughout Northwest Florida devastated by this high-end Category 2 storm.

While we have restored power to all customers able to safely accept service, it will undoubtedly take months for life to truly recover from the destructive wind, torrential rain, and toppled trees that ravaged many homes and businesses. In preparation for the storm, FPL assembled a restoration workforce of approximately 17,000 men and women from 29 states, pre-positioning crews, equipment, and supplies ahead of the storm so that restoration could begin as soon as conditions were safe. I want to recognize our employees and the thousands of contractors, mutual assistance crews, first responders, and community partners who worked around the clock for our customers. Their preparation, dedication, commitment, and selflessness allowed us to restore power safely and quickly.

The hurricane exited our service area early Saturday morning, and by Tuesday, we restored power to more than 97% of customers affected. Early forensic analysis shows investing in a stronger, smarter, and more storm-resilient grid benefited our customers. Not a single hardened transmission or distribution pole failed during Isaias. Underground neighborhood power lines performed approximately 14 times better than overhead lines, and smart grid technology avoided approximately 140,000 outages. To be clear, these investments do not make the grid hurricane-proof, but together with our preparation and coordinated response, they have reduced both the number and duration of outages and enable us to get our customers' lives back to normal faster.

It is our people who make the biggest difference, and I again want to say thank you to our teams and the thousands of mutual assistance crews who worked tirelessly to support our communities when they needed us most. A year ago, we laid out a clear plan for NextEra Energy with more than 12 ways to deliver value for our customers across our regulated and long-term contracted businesses. The backdrop then is the same as it is today. America needs more electrons on the grid. Affordability, reliability, scale, and speed to market are more important than ever. Here is what is materially different between then and now. Today, we are not just talking about a plan.

We have executed and continue to execute against that plan. In many areas, we have exceeded our own expectations. In a complex environment where power demand continues to accelerate, customers cannot afford to wait. They need a partner who can deliver now and do it affordably. That is exactly what we continue to do all across America. It is why we believe NextEra Energy remains one of the best-positioned companies in the sector. No company does more to build generation and energy infrastructure necessary to keep pace with the demand for power across this country.

We have the scale, the balance sheet, the supply chain, the technology, the customer relationships, and the development and operating expertise to build what our customers need, when and where they need it. We are executing across the full set of growth opportunities we laid out 12 months ago by staying focused on affordability, reliability, and delivering every day for our customers. I could not be prouder of the team's execution this year, and I could not be more excited about what we have left to accomplish in 2026 and beyond. At FPL, we continue to support Florida's strong and growing economy.

Florida remains one of the fastest-growing states in the nation, supported by continued net in-migration, job creation, and business investment. Florida's $1.9 trillion annual economy is the 14th largest in the world. Florida's growth continues to drive the need for new energy infrastructure across the state. We are making smart capital investments to meet those customer needs. We also continue to demonstrate that serving growth can be done affordably and reliably. FPL's typical residential bill is approximately 37% below the national average and is only projected to increase 2% annually on average through the end of the decade. We drive consistently low bills through exceptional operating efficiency.

FPL's non-fuel O&M is more than 70% lower than the industry average on a dollar per megawatt hour basis. Customers also continue to benefit from top decile reliability that's more than 60% better than the national average. This performance is a direct result of a proven long-term strategy centered on sustained, disciplined capital investment scale, a strong balance sheet and credit rating, a highly efficient operating model, and a diverse generation fleet. FPL's customer service is also ranked top decile nationally for residential customer satisfaction while maintaining the lowest billing cost per customer. We've worked hard to extend this customer value proposition in Northwest Florida over the last 8 years. In addition to reliability investments, we've focused on customer affordability.

When adjusting for inflation, FPL's typical residential bill in that part of the state is now approximately 25% lower than it was in 2018 before we acquired Gulf Power. We have also put into place a large load framework that allows us to serve new demand while ensuring existing customers are protected from the incremental costs required to serve that growth. FPL's large load tariff is not only one of the most customer protective in America, its protections and provisions have also been largely codified into Florida law. Needless to say, hyperscalers know exactly how we plan to serve them in Florida. As we discussed throughout the year, the interest is high.

It's why we raised our large load expectations from 6 gigawatts to 8 gigawatts by 2032, and we remain confident in our ability to announce a large load transaction by the end of the year. At Energy Resources, we have turned an extraordinary opportunity set into real execution across the board in both our regulated and long-term contracted businesses. Our regulated and invested capital, along with our secured capital expenditures across electric and gas transmission, have increased roughly 25% to approximately $12.7 billion since December 2025. In the first quarter, Lone Star Transmission received ERCOT approval to build portions of 2 new transmission lines in North Central Texas to improve reliability in the region.

In the second quarter, MISO selected NextEra Energy Transmission to build 2 large-scale 765 kV transmission projects in Illinois to help deliver safe, reliable, and cost-competitive energy for decades. In addition, our gas transmission business formed a joint venture during the quarter with Chesapeake Utilities Corporation to build a $1.2 billion 97-mile intrastate gas pipeline in South Florida. We continue to add renewables and storage to our backlog at a pace that underscores the strength of our customer demand and the value of our speed-to-power development platform. For the quarter, Energy Resources added 3.7 gigawatts of renewables and storage projects to its backlog. This includes another strong quarter of battery storage origination at 2.4 gigawatts.

Importantly, we have multiple growth avenues for battery storage. We build standalone battery storage, co-locate storage at existing sites, develop storage as a grid solution, and expand batteries from 4 hours to 8 hours at existing projects. In a market driven by a significant need for quick capacity solutions, Energy Resources remains well positioned to serve customers with battery storage. Here's what's important. With these new additions to our backlog and projects that reach commercial operation, we have now achieved greater than two-thirds of the midpoint of our 2026 through 2029 development expectations, and we added approximately 15 gigawatts to the backlog in the last 12 months. We also continue to make significant progress across our large load opportunity set.

To date, we have advanced more than 20 gigawatts of large load projects, over 18 gigawatts of which are gas-fired generation. We expect these opportunities to derive value in 2 different ways. The first is our federal hubs, where Energy Resources expects to develop, build, and operate projects for fees without investing capital. The second includes projects that we expect to develop, own, and operate ourselves. Starting with the federal hubs, we have signed definitive agreements to develop, construct, and operate 3 projects across Texas and Pennsylvania, totaling approximately 16.5 gigawatts that have secured $5.7 billion in initial funding year to date.

Energy Resources earns fees based on a predetermined schedule for development and construction of the projects and for the first 20 years of operations. Across all 3 federal hubs, we are advancing construction and PPA solicitation in parallel to maximize speed to market while working to secure required permits and other approvals. We expect to serve significant load as early as 2028 and 2029 using behind-the-meter generation, and then ramp to the full requirements of these campuses from 2030 through 2032. Importantly, each of these projects are perfect examples of matching new electric load with new power generation, ensuring data centers pay for their own generation and infrastructure, not existing utility customers.

While we do not put any capital into the projects, we expect federal hubs to generate approximately 50% of the expected adjusted earnings per share that Energy Resources would receive if we own the projects ourselves over the first 20 years of operation. The 3 federal hubs, on an equivalent adjusted EPS basis, are approximately equal to the top end of our natural gas development expectations of 4-8 gigawatts by 2032. We also have the opportunity to build and own battery storage to support data center load at these federal hub opportunities, which could be an incremental 6-11 gigawatts or an approximate 15%-30% potential upside to our storage development expectations.

We also continue to advance a significant pipeline of large load projects that we expect to own and operate ourselves. In July, we were part of a coalition of energy, infrastructure, and utility companies that announced a strategic partnership to develop a data center campus at the U.S. Department of Energy's Paducah site in Western Kentucky. NextEra Energy expects to build and own dedicated generation resources to power the campus, including up to 2 gigawatts of natural gas and up to 2.6 gigawatts of battery storage systems. We also have a development pipeline of 30 potential hubs we are discussing with the market, and we continue to expect that number to rise to 40 by year-end.

Duane Arnold, our nuclear plant in Iowa, remains on track to be recommissioned and reenter service no later than Q1 2029. During the quarter, we closed a loan with the Department of Energy for up to $1.9 billion to support the restart. This milestone moves us closer to restarting Iowa's only nuclear plant and adding reliable around-the-clock energy to the regional grid. We continue to evaluate advanced nuclear, closely assessing the commercial and technical capabilities of various SMR OEMs. We have 6 gigawatts of SMR co-location opportunities at our nuclear sites, and we are working to develop new greenfield sites.

Of course, any new nuclear build would have to include the right commercial terms, conditions with appropriate risk-sharing mechanisms that limit our ultimate exposure. We also continue to successfully recontract across our existing portfolio. During the quarter, we executed a 20-year power purchase agreement for approximately 1 gigawatt of our Point Beach Nuclear asset in Wisconsin at a competitive price, which remains subject to approval by the Public Service Commission of Wisconsin. The full output of the plant is now contracted into the 2050s. Since the last earnings call, we also recontracted over 250 megawatts of existing renewable projects.

This brings our year-to-date recontracting total to nearly 1,400 megawatts of renewables, which have been priced on average at a roughly $20 per megawatt hour premium above recent realized pricing for these projects. In total, we have recontracted nearly 2,400 megawatts to date this year. Bottom line, we believe it is important to do what we say. Last year, we laid out our plan across 12 key growth areas. One year later, we are delivering. Our growth plan is not dependent on any single technology, customer market, or policy outcome. We have multiple ways to deliver affordable and reliable power for our customers. As proud as we are of what we have accomplished, we are not satisfied.

That has always been part of the culture at NextEra Energy, never settling and constantly looking for ways to get better every day for our customers. When it comes to the opportunity set in front of us, the runway for growth is significant. We also continue to advance our pending combination with Dominion Energy. As I have said before, this is a merger of addition, not subtraction. We are bringing together 2 industry leaders with a shared commitment to safety, reliability, affordability, customer service, and execution at a time when the power industry is tasked with meeting rapidly growing electricity demand.

America needs new generation transmission, and customers expect us to meet that growth while continuing to keep their bills affordable. That is what makes this combination so compelling. Dominion Energy brings deep local knowledge and experienced workforce, critical generation assets, a significant transmission and distribution system, and longstanding relationships with its customers and communities. NextEra Energy brings additional scale, balance sheet strength, a strong credit rating, supply chain reach, and one of the largest energy infrastructure development and construction platforms in the country. In addition, the combination adds global leadership in renewables and battery storage, driving the ability to accelerate clean energy and battery storage.

Bringing all of these capabilities together would give the combined company an even stronger platform to buy, build, finance, and operate the infrastructure our customers need more efficiently over time. Importantly, this combination is about preserving Dominion Energy's strengths while putting NextEra Energy's scale and capability behind them. Dominion Energy would remain locally led and separately regulated while gaining access to NextEra Energy's experience across the full energy value chain, including renewables, battery storage, nuclear, natural gas generation, transmission, and grid infrastructure. We believe that the combination of local expertise and national scale will uniquely position the combined company to help meet unprecedented energy demand while maintaining an intense focus on reliability, affordability, and customer service that both companies share.

We are backing that strategic rationale with tangible commitments to Dominion Energy's customers, employees, and communities. In September, we announced an enhanced benefits package that demonstrates our commitment to Virginia. We provided additional commitments that further demonstrate our dedication to protecting and delivering value for customers. We organized the package around affordability, jobs, and building more clean energy and battery storage faster to decrease reliance on expensive imports.

We have doubled the residential bill credits from 2 to 4 years, provided an additional $100 million of shareholder-funded support for Dominion Energy's customer bill assistance program through 2038, provided $100 million to directly support workforce development, created up to a $5 billion Virginia supplier program through spending commitments over 5 years that support cost-competitive contractors, suppliers, and service providers doing business in Virginia. Committed to creating 600 new NextEra Energy jobs in Virginia, who will work out of a new shareholder-funded co-headquarters tower in downtown Richmond, and committed to maintaining Virginia employee headcount for the next 5 years. We intend to bring others with us to Virginia.

Through our extensive supplier relationships, we have already secured letters of intent for at least 400 new jobs if the combination is approved, bringing the total to 1,000 new Virginia jobs as we work to create an ecosystem of economic growth centered on energy. We believe these additional commitments deliver on those priorities and further demonstrate the tangible benefits this combination can deliver for customers and communities. We also will continue to engage in constructive dialogue with stakeholders in South Carolina and North Carolina, and we expect to share specifics as those conversations move forward. I am confident this combination will deliver benefits that matter most to each state. We have reached several important milestones since our last call.

On September 3rd, shareholders of both NextEra Energy and Dominion Energy approved the pending combination, satisfying an important closing condition. The state regulatory reviews are also moving forward. In Virginia and South Carolina, procedural schedules have been set with hearings in November and December, and we expect final orders in January 2027. In North Carolina, the commission has established a procedural schedule with expert witness hearings beginning in February 2027. The federal review processes are also underway and continuing. We continue to expect the combination will close in the second half of 2027. With that, I'll turn the call over to Mike.

Mike Dunne: Thank you, John, and good morning, everyone. For the third quarter of 2026, FPL's earnings per share increased by $0.06 year-over-year. The principal driver of this performance was FPL's regulatory capital employed growth of approximately 9.2% year-over-year. FPL's capital expenditures were approximately $2.4 billion for the quarter, and we expect FPL's full year capital investments to be approximately $12 billion. For the 12 months ending September 2026, FPL's reported return on equity for regulatory purposes will be approximately 11.8%. During the third quarter, we reversed approximately $172 million of the rate stabilization mechanism, leaving FPL with an after-tax balance of roughly $1.5 billion.

FPL's third quarter retail sales increased 2.8% from the prior year comparable period due to customer growth and weather. On a weather normalized basis from the prior year comparable period, retail sales increased by 1.4% due to an increase in customer growth. Now let's turn to Energy Resources, which reported adjusted earnings growth of approximately 13% year-over-year. At Energy Resources, adjusted earnings per share increased by $0.06 year-over-year. To align with our 12 ways to grow, we have made select changes to certain categories that I will walk through. Contributions from new investments, which now include federal hubs, increased $0.09 per share, primarily driven by continued growth in our power generation portfolio and initial contributions from federal hubs.

Existing energy assets now include contributions from natural gas and peaking generation, which were in other, prior to this quarter. Federal hubs will move from new investments to existing energy assets after 12 months of fees earned. Contributions from our existing energy portfolio increased $0.05 year-over-year, primarily reflecting more normalized wind resource compared with the prior year period. Wind resource for the third quarter of 2026 was approximately 101% of the long-term average versus only 90% in the third quarter of 2025. The comparative contribution from our customer supply business decreased by $0.04 per share, primarily driven by timing of origination activity last year.

Regulated operations is a new category and will include contributions from NextEra Energy Transmission and regulated gas transmission assets. All other impacts decreased by $0.04 per share, primarily driven by interest expense and timing of capital recycling in the prior year comparable quarter. Energy Resources had a strong quarter of new renewables and storage origination, adding 3.7 gigawatts to the backlog. With these additions, our backlog now totals nearly 36.7 gigawatts after taking into account more than 1.8 gigawatts of new projects placed into service since our last earnings call. This highlights the continued strong demand for renewables and storage and marks the fourth consecutive quarter that Energy Resources has added over 3.5 gigawatts to its backlog.

We only have 17.6 gigawatts left to add to our 2026 through 2029 backlog before we hit the midpoint of our development expectations over that period. Turning now to our third quarter 2026 consolidated results. Adjusted earnings per share from corporate and other decreased by $0.01 per share year-over-year. We remain well positioned to navigate the current interest rate environment through our more than $48 billion forward starting interest rate hedging program, which has an average rate of approximately 4% and an average tenor of approximately 9 years. This program allows us to lock in project economics at PPA execution and avoid window risk. Additionally, this program helps support our refinancings as large portions of our near-term maturities are hedged.

Our debt has a weighted average maturity of approximately 15 years with a well-staggered maturity profile. As a result of our financial discipline, a 50 basis point move in rates only has a $0.01-$0.03 per share impact in 2028, which is less than 1% of expected 2028 adjusted earnings per share. Our 2026 adjusted earnings per share expectations range of $3.92 to $4.02 remains unchanged, and we are targeting the high end of that range. We expect to grow adjusted earnings per share at a compound annual growth rate of 8%+ through 2032 and are targeting the same from 2032 through 2035, all off the 2025 base of $3.71 of adjusted earnings per share.

From 2025 to 2032, we expect that our average annual growth in operating cash flow will be at or above our adjusted earnings per share compound annual growth rate range. We also continue to expect to grow our dividends per share at roughly 10% per year through 2026 off a 2024 base and 6% per year from year-end 2026 through 2028. As always, our expectations assume our caveats. That concludes our prepared remarks, and with that, we will open the line for questions.

Operator: Thank you. We will now open the line for questions for the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. The first question comes from Steve Fleishman with Wolfe Research. Please go ahead.

Steve Fleishman: Yeah. Hi, good morning. Thanks. Just, I guess first question on the. Looks like you are tracking already through 3 quarters to the high end of the range, and it looks like you are also starting to already get the income from the federal hub process that probably, if it was done through normal contracting, would have come when the plants start running down the road. Just how should we think about the potential for kind of a rebasing in the near term of the outlook, just given that new addition and how you are tracking so far?

John Ketchum: Thanks, Steve. As you noted, we expect to have adjusted earnings per share of $3.92 to $4.02 this year and are targeting the high end of that range. The high end of that range also includes the El Niño impacts that we expect to occur on our wind facilities in Q4 of this year. As we look at what those wind impacts could be, we expect that generation to be anywhere between 90%-95% of the long-term average. So we expect to be at the high end of our range despite those impacts.

As we look at our long-term forecast, I would point you to the S-4, where we have provided to our board, to Dominion's board, and out publicly to what our expectations are for our growth of our business. While we have maintained our existing earnings per share growth of 8%+ on a long-term basis, in a combination with Dominion, we expect that to be 9%+.

Steve Fleishman: Okay, great. Just separately, yesterday or 2 days ago, we got the proposed views of the governor's office in Virginia and the Virginia staff, and the governor's office proposal seems to have a lot of pretty onerous conditions. Staff, maybe not as much, but potentially on ring fence. So maybe, John, you could give some perspective on those proposals and how do you find a path, particularly with the governor's office, to some kind of resolution there?

John Ketchum: Yeah, Steve, thanks for the question. First of all, here's how I look at it. We have the intervener testimony in, right? We're going through all of that. As I look at it, I really look forward to prosecuting this case as we move forward our rebuttal, and then hearings in mid-November. As we have reached out across the stakeholder group, we've talked quite a bit about this. I think this case breaks down to really 3 things. One is affordability, the second is jobs, and the third is clean energy. I think we have really put forward a very strong case in each of those areas.

Of course, there'll be some nuances that we'll have to deal with as we go along. I look at affordability, moving the residential rate credits from 2 to 4 years, and we have almost $2 billion in rate credits in front of the Virginia SCC in our current proposal. That is by far the most of any transaction of this nature. We increase that commitment to the EnergyShare program by $100 million to help those in need. We have the long-term scale benefits, which I think speak for themselves, when you look at the need to add new generation and transmission to Virginia to decrease reliance on expensive imports.

Then I just point to the track record of FPL, which I went through. A bill 37% lower than the national average, a bill that is 20% lower today than it was 20 years ago while investing in generation, while investing in transmission to keep up with growth from one of the fastest-growing states in the country. On jobs, I think we just have an incredible story. First of all, Dominion will stay locally led, locally run. We are not making any changes there. We are actually bringing 1,000 jobs to Virginia and to Richmond, 600 of our own, 400 from the letters of intent from suppliers that I talked about, the new office tower.

Really trying to create an ecosystem around Virginia with the $5 billion supplier program, the $100 million workforce development program. I do not know if folks saw it. Virginia Chamber put a study out here recently, not only talking about the direct economic benefits of what we put forward, but the indirect. I mean, this is just billions of dollars of potential investment opportunity for Virginia and just thousands of direct and indirect jobs. They will crystallize that report here in the middle of November. So affordability jobs, and the last one is clean energy. When I look at clean energy, we are the world's leader, right? In renewables, we are the world's leader in storage.

If we cannot get it done, I do not know who else can in terms of meeting the requirements of the Virginia Clean Economy Act. The combined company will become the second largest in the United States in nuclear, and I think when you look at the pieces and you put them together, there is just no company better positioned to deliver on Virginia's goals and the governor's recently released energy plan than this combined company. I think that is just undeniable. We look forward to prosecuting that case as we move forward. Again, it is going to be really, really important that we are also able to bring speed to power to the table, right?

Which is what we do every single day. Look at the results of this quarter. I will be super disappointed if we cannot accelerate the storage build in Virginia, for example, to help alleviate some of the high import charges they are facing, both on the energy and the capacity side. Because it is very important when you have a supply-demand imbalance like we see in Virginia, that we get new generation transmission up and running as quickly as we can, but do it in an affordable way for customers, which I think our package does.

Really look forward to bringing this case forward in front of the commission in mid-November and really looking forward to responding to the intervener testimony that we saw come in Monday, which we are still digesting, and in a very strong rebuttal that we will file here in a couple of weeks.

Steve Fleishman: Great. Thank you.

Operator: Thank you. The next question comes from Paul Zimbardo with Jefferies. Please go ahead.

Paul Zimbardo: Hi. Good morning, team. Thanks for taking the time.

John Ketchum: Thanks, Paul.

Paul Zimbardo: Yeah, no, thank you. The first one I was going to ask, obviously, there's this permitting reform bill out there. If you could kind of discuss your thoughts on it and specifically what it could mean for NextEra, whether it's the wind platform, competitive transmission, just if you have any thoughts on that.

John Ketchum: Yeah, absolutely. I'll take that. This is John. Look, first of all, we've been trying to get permitting reform legislation moving forward for the industry for quite some time now. I think it's great to see both sides of the aisle come together and really trying to make a conscientious effort to move a package forward that makes sense. There are puts and takes in the bill. There's some good things. There's always going to be some things that may perhaps you don't like as much, but that's the spirit of compromise. I think when I look at the overall features of the bill, it does a lot of great things.

We need more linear infrastructure in this country, which requires permitting reform. Whether that is new transmission to enable more generation across the U.S. or it's new gas transmission across the U.S. We are in a period where power demand is expected to increase sixfold across this country, and it's imperative that we do right by our customers, which means getting power to where it needs to go and having linear infrastructure available to meet those needs as we look to the future. So I think there are a lot of promising things in the bill.

I applaud the efforts of Congress to really try to move this forward and looking forward to potential outcomes as we approach the end of the year.

Paul Zimbardo: Okay, great. Thank you. Then one other last one for me quick. Just could you frame the benefit of the federal hubs in the third quarter and just any way you'd recommend we think about it for calendar 2026 or 2027 in the interim early years? Thank you.

Mike Dunne: In the interim early years, it's going to be a relatively modest payment that is based on the development activities that we are pursuing. As you look at that, as that grow, you can imagine a relatively modest payment in 2026 and 2027, and then that will grow over time through 2032 when we receive the operating fees. You look at those operating fees from 2032 to 2052, you'd expect those to be roughly half the earnings per share as if we owned the facilities.

Paul Zimbardo: Okay, great. Thank you very much.

Operator: Thank you. The next question comes from Constantine Lednev with Wells Fargo. Please go ahead.

Constantine Lednev: Hi, good morning, John and team. Maybe just shifting to Florida. In terms of the data center targets, the targets are up, but the deals aren't signed yet. How much visibility do you have into the advanced development stages? What does that ramp timing look like, and is there availability of turbines to serve that ramp?

Advertisement

Scott Bores: Konstantin, good morning. It's Scott. I'll take that. I think as John said on the call this morning, we remain confident. We have a large pipeline of over 20 gigawatts of interest as we've indicated in prior quarters. That remains. These are complicated deals, multi-billion dollar deals that take some time, and given the outside environment, we're working with the local communities to build the consensus and support so we can move forward before we announce these deals.

I think as we said previously, as you look at our system to serve the first couple of gigawatts of large load, we really just need to build battery storage, given that we've got a strong base load gas fleet and the nuclear fleet behind that. So we're well-positioned and again, remain confident with announcing a deal before the end of the year.

Constantine Lednev: Okay, perfect. Maybe a broader question in terms of equity needs and capital markets tightening, do you see any incremental funding needs versus the equity plan announced earlier? Any thoughts around alternative instruments, alternative funding sources, especially as projects start increasing in size over time?

Mike Dunne: Thanks. To take that, in terms of our expected equity issuances as we look through 2032, we remain consistent in the range that we have provided of roughly $12 billion-$17 billion of total equity needs through 2032. As we do look at the various funding plans that we have, you have seen us diversify our corporate funding across the globe. This year, we've been in markets such as Europe, in Australia, in Canada, and the U.S. So we are providing access to multiple markets to raise our financing. Then as you look at our project-level financing, we remain the tax equity providers partner of choice.

Many times they are selecting us because of the stability and the confidence they have in our projects. In addition to that, you will see that with the rise of many of our partners in the financial spectrum, those partners, such as the larger asset managers, are also looking to deploy capital with us. We are working with those partners in a new path of raising funds. When you look across the broad transom, we have multiple different ways to raise our financing and feel very confident about where we sit.

Constantine Lednev: Okay. So no major changes versus the plan. Maybe just a quick follow-up to Steve's question on the Virginia merger process. Is there a path to find any concessions through the rebuttal process or any partial settlement options, anything of the sort?

John Ketchum: Yeah. Constantine, this is John. I'll speak to that. Again, first of all, I think we put a very strong case forward. As I said before, I'm not going to go back through the details again. But absolutely, I mean, in the rebuttal process and through the hearings themselves, there's always opportunities for compromise on certain specific issues. But again, I stand behind the strength of the filing that we have put forward.

Constantine Lednev: Excellent. Really appreciate it. Thanks for the time today.

John Ketchum: Thank you.

Operator: Thank you. The next question comes from Nick Campanella with Barclays. Please go ahead.

Nick Campanella: Hey, good morning. Thanks for all the information today. I just wanted to ask on follow-up on the funding and financing, just given the 4-6 gigawatts of gas development was going to be substantial CapEx, and now that is kind of capital light, and you are getting the associated earnings for your plan. Can you do less asset sales, and can there be downward pressure kind of overall there from the balance sheet run that creates? Is keeping that net income and EBITDA now upside to the plan, and is that included in the S1 earnings power? Can you kind of talk through the asset sales?

I think you had the cycling of 7-12 in the last plan, and just wondering if there is downward pressure there. Thanks.

Mike Dunne: Yeah. I think when we look at our assets that we invest into, we intend to hold those assets through their life because we believe that these are very attractive investments for us. Now, when we put together the asset recycling, we have based that on history where parties come to us and say that they value that more than the value that we see for our shareholders. When that happens, we will execute capital recycling. But our base plan for how we run our business is to not rely on capital recycling to meet equity needs because we believe these projects are best suited for our investors. We believe these are very attractive projects.

As we move over time, I would expect us to look to see that $7 billion-$12 billion of capital recycling for us to look to hold on to more of that unless there's an opportunistic opportunity where a party comes in and values it far more than we value it.

Nick Campanella: Okay, thanks. I appreciate that. Then, just one follow-up on getting a data center deal done in Florida this year. Is there anything that you can offer on the sizing of this? Is this getting a couple of hundred megawatts done, or could it be something more sizable, near a gigawatt?

Mike Dunne: Nick, we're not going to comment on that. Obviously, we'll announce that at the time a deal is announced.

Nick Campanella: No problem. Have a great day. Thanks.

Operator: Thank you. The next question comes from Carly Davenport with Goldman Sachs. Please go ahead.

Carly Davenport: Hey, good morning. Thanks so much for taking the questions and for all the updates today. Just one from me, more on the industry side. I guess on the solar front, seemed like the backlog got revised a little bit lower in certain years, and it seems like costs across the industry have been rising due to interest rates, Section 232, and some equipment constraints. I guess, could you just talk a little bit about any sort of cost pressures you might be seeing on the solar side and confidence in your ability to pass those costs through in higher PPA prices?

John Ketchum: Yeah, sure, Carly. Let me go ahead and take it, and then Brian could fill in with anything that I might have missed. First of all, we continue to see in our discussions as we look to the future with customers, strong demand. When I think about solar and where solar prices out against alternative technologies is a very compelling product offering. When I think about how we are positioned around our supply chain, I think we've got a real competitive advantage there. I like the outlook for our ability to continue to develop and offer solar as a competitive offering to customers.

Then also when you think about combining that with storage, with 4 potentially going to 8 hours on expansion opportunity over time, it just further adds to the appeal. So, we have not changed really our views and continue to feel very good about the solar market moving forward.

Brian Bolster: The only thing I'd add is that as we're out with customers right now, we've seen a focus on capacity. That's why we've seen a big pickup in storage. We are starting to see our customers look for more energy products. I do think you're going to see a shift in the coming quarters back towards more energy than capacity as you think about those products. It's very consistent with what's going on in the market. There's a need to fill in capacity, and when people get that sorted out, they're going to look at their energy needs. That's what we're seeing amongst our customers.

These things ebb and flow, but we feel like the mix is going to be consistent with our expectations over time.

Carly Davenport: Got it. Great. That's really helpful context. I'll leave it there. Thank you.

Operator: Thank you. The next question comes from Nick Amicucci with Evercore ISI. Please go ahead.

Nick Amicucci: Hey, guys. Good morning. Just wanted to ask too, just as we kind of think about the Virginia process, and obviously we don't want the truth to get in the way of good political headlines. Just kind of thinking through that, and obviously the statute says, it's a do-no-harm. Could we just kind of walk through the baseline of that when you're talking about a do-no-harm clause and kind of just how to think about any type of go forward on that?

John Ketchum: Yeah, Nick, this is John. I will go ahead and take that. The standard is adequate service, just and reasonable rates, right? Like you said, it is a do-no-harm statute. The proposal that we have put forward around affordability with the 4 years of credits, almost $2 billion, the $100 million EnergyShare program step up through 2038, the long-term scale benefits that we bring, the track record of running one of the best run utilities in the U.S., I would say the best run in Florida Power & Light. I like our chances under that standard reflecting the affordability benefits there. That is not for me to decide. That is for the SCC to decide.

On the jobs side, look, I think we are making a real commitment to Virginia. It is going to stay locally run, locally led, but we are also moving more roles from NextEra also to Virginia. From a job standpoint and a capability of running generation transmission and all the planning that goes into running an affordable and a reliable system for customers, I think I feel very good about where we stand there. On the clean energy point of being able to build more generation transmission affordably and reliably in Virginia to make sure that we are able to comply with that do-no-harm standard. I feel good about what we are putting forward there as well.

But again, all that is not for me to decide. It is for the SCC to decide. They will apply the law, and I have no doubt that they will look at all the facts and circumstances, the filing, and do their job at the end of the day. That is all you can ask for.

Nick Amicucci: Great. Thanks, John. As we kind of think about too, just the Point Beach upgrades and when that is approved, how can we kind of think about the earnings uplift and what kind of start date should we be kind of pointing to?

John Ketchum: On Point Beach, you said?

Nick Amicucci: Yeah.

John Ketchum: Point Beach has a current contract with We Energies, and as those contracts roll off in 2031 to 2033, the new contract will be put in place. I think as we mentioned in December, is that we believe the overall contribution will be roughly $0.21 on average from Point Beach under this new contract.

Brian Bolster: Nick, just to be clear, you used the word upgrade. This is our recontracting the existing facility. This is not an upgrade. It is just taking the existing capacity and extending out the contract for 20 years when the contract rolls off.

Nick Amicucci: Yeah. Understood. Sorry. Misspoke there. Thanks, guys.

Operator: Thank you. The next question comes from Jeremy Tonet with J.P. Morgan. Please go ahead. Excuse me, Jeremy, your line is open. Is your phone muted accidentally?

Jeremy Tonet: Hi. Sorry about that.

Operator: Please go ahead.

Jeremy Tonet: Hi. Good morning.

Operator: Thank you.

Jeremy Tonet: Thanks for all the details today. Just wanted to kind of come back to the nuclear side, if I will. I think you talked a bit about the SMRs earlier, and was just wondering within NextEra's strategy, if you see room for large scale in any scenario, or is it just SMR? If you could just walk us through the gives and takes there, that would be helpful. Thanks.

Brian Bolster: Hey, Jeremy, it is Brian. I am going to start with something that we repeat often, which is we build for customers, right? Take that input first and foremost. John has said this several times, as we look at the opportunity set, we are also going to look to make sure that we have got those 4 walls in place. As we look at any nuclear opportunity that involves new build, we are going to want to be able to look at our investors and say, we know where we are going to be able to draw the line from a capital perspective.

I would say those are going to be our first 2 guiding lights as we look at opportunities, which is, one, what does the customer need? 2, what is the structure that is going to protect our shareholders? I do think we have a bias, and John talked towards SMRs because I do think there is a benefit to the scale of capital you are putting to work, especially as we start out in this industry again, rebuilding. Again, if the protections are right and the customer has a very strong preference for something of large scale, then we are obviously going to look at that.

We have a preference, but at the end of the day, we are building these for the customers, and we need to have the right protections in place.

Jeremy Tonet: Got it. Understood. That's helpful. Thank you.

Operator: Thank you. The next question comes from David Arcaro with Morgan Stanley. Please go ahead.

David Arcaro: Oh, hey, good morning. Thanks so much. Wanted to ask on the electric and gas transmission side of things. You're already tracking at 25% growth rate ahead of the original plan. I was wondering, what's the potential for further extension and upside in that side of the business?

Mike Dunne: As we look at our transmission broadly, and we looked at roughly 20% to 25% CAGR and rate base growth from 2025 through 2032, we believe that what we are doing today positions us well to hit that overall metric. As we look at where could we see additional opportunities, I think as we look there, it's really on the gas transmission side. One of the key things that we had seen in December of 2025 was a very robust process on electric transmission.

But as we look now at the opportunity set, particularly with bring your own generation and the needs that we are seeing across the gas value chain, we think that can be an opportunity for us to expand beyond our expectations. But I would caution that our overall growth expectations for this segment are already quite high in the 20% plus range.

Brian Bolster: David, I appreciate the comment, and we're very excited about the growth that we've achieved. But I would remind everyone, just so we can put these things in perspective, because compound growth rates get skewed. We're growing effectively a small utility into a $50 billion utility if we hit our numbers from the standpoint of you just think a rate base type multiple against these. So we've had good success. We're very happy with the targets that we've put out there.

But just to give people a sense of the order of magnitude that we're talking about from the size of what we'll have when we're done, that would be on the order of a $50 billion type utility just sitting within Energy Resources. So we're staying quite busy.

David Arcaro: Absolutely. That makes a lot of sense. Then, just other question I had. In the broader backdrop of rising rates on the renewable side of the business, the question that we usually come to, are you able to pass through higher cost of capital in new PPA rates with new renewable contracts? Are you able to potentially see higher equity returns, going forward, to reflect that as well?

Mike Dunne: So as we look at today's environment, number one, when we sign our PPAs, we lock in the interest rates to lock in the economics. Then the second question is, as we look, how exposed are we to interest rate movements for our origination activities? There are 2 key things that we see driving today that allow us to pass that through. Number one is that people need power. So when you need power, people are looking for the lowest cost power and the people who can execute and deliver that. In both cases, that's us.

So when we look at their comparative alternatives, they're going to be higher, and they are going to be less reliable from an execution perspective for what we're providing. The second piece is obviously that as you look at tax credits, particularly for wind and solar, those help reduce the cost of wind and solar relative to other choices. So those 2 things create us in a place where we are competing against the other projects, and we are able to pass through the interest rates of those to our customers.

Brian Bolster: Mike, the only thing I would add is, we were never the low-cost bidder in the market, and so actually this is helping us because I think others are feeling a lot more pressure because their margins were skinnier, and so they are having to get. So I actually think it is going to help us on a market share perspective as well as a return perspective because it is flushing out some of the low-cost bidders that were in the market. So we are quite comfortable with our competitive position in this rate environment or anything consistent with what we have been seeing recently.

David Arcaro: Got it. Okay, thanks. Appreciate it.

Operator: Thank you. This concludes our question and answer session, and the conference has also now concluded. Thank you for attending today's presentation. You may all now disconnect.

Should you buy stock in NextEra Energy right now?

Before you buy stock in NextEra Energy, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and NextEra Energy wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $370,440!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,330,110!*

Now, it’s worth noting Stock Advisor’s total average return is 924% — a market-crushing outperformance compared to 212% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.

See the 10 stocks »

*Stock Advisor returns as of October 21, 2026.

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. Parts of this article were created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

The Motley Fool has positions in and recommends NextEra Energy. The Motley Fool has a disclosure policy.

Original Article on Source

Source: “AOL Money”