NextEra Energy, the largest generator of renewable energy in the United States, posted mixed results in its fourth-quarter earnings report on Wednesday, sending shares tumbling. The company announced the retirement of Eric Silagy, the head of its key Florida utility subsidiary, Florida Power & Light (FPL), which is America’s largest electric utility.
Despite the company’s clean energy unit logging its best year for new renewables and storage growth, adding more than 8,000 megawatts to its backlog, NextEra’s shares dropped 6% on Wednesday, making it one of the day’s biggest losers in the Standard & Poor’s 500 Index.
The company’s fourth-quarter revenue of $6.16 billion fell short of Wall Street estimates of $6.55 billion, according to Refinitiv data. However, adjusted profit of 51 cents per share beat estimates of 49 cents per share.
NextEra CEO John Ketchum said that the recent U.S. Inflation Reduction Act (IRA) should increase spending on renewable projects, and that he anticipates “a tremendous acceleration of growth in renewables and storage deployment across the U.S. due in part to the IRA, particularly in the latter half of the decade.”
However, the power sector has been hit hard by extreme weather conditions and the company was hit by $53 million in storm restoration costs during the quarter. Natural gas prices also averaged $6.10 per million British thermal units (mmBtu) in the October-December quarter, which is about 26% higher than the previous year.
Analysts at Morningstar said that the decline in shares could be related to Silagy’s retirement and regulatory uncertainty. The company has faced a complaint filed last year by a political watchdog group with the U.S. Federal Election Commission, accusing FPL of violating Florida election laws. Ketchum said that an internal review should show that FPL would not be liable for violating any laws, but acknowledged that this and other issues may have contributed to Silagy’s retirement.