Oct 28 (Reuters) – Top U.S. renewable energy producer NextEra Energy Inc ( NEE.N ) beat its previous quarterly profit forecast on Friday to strong demand amid rising electricity prices, while predicting an increase from the latest anti-inflation law.
The push to promote alternative energy sources has gained new urgency this year as Russia’s invasion of Ukraine fueled a rally in natural gas and crude oil prices, boosting demand for companies like NextEra that produce wind and solar power.
NextEra’s third-quarter revenue of $6.72 billion was nearly a billion more than expected, while profit of 85 cents per share topped estimates of 80 cents.
Shares of the company rose about 3% to $77.6 in afternoon trading.
NextEra was now set to take advantage of the US Inflationary Reduction Act (IRA) which includes measures to shift consumers to green energy and reduce carbon emissions.
“The IRA provides a tremendous opportunity for us across the board … it creates more immediate financial opportunities to advance wind, solar and battery storage,” Chief Executive Officer John Ketchum said in an earnings call.
NextEra Energy Resources, the company’s clean energy business, would benefit even more after 2025 when the incentives are expected to expire.
The segment signed about 2,345 megawatts of new renewable and maintenance projects in the quarter, while adjusted revenue increased 18% to $729 million.
Managers also pointed out that inflationary pressures have moderated but have come down from the highs of the past few months when commodity prices rose.
The company separately reached an agreement to buy a large portfolio of landfill gas operations at power plants for approximately $1.1 billion and nearly $37 million in project finance debt. The transaction is expected to close in early 2023.
Reporting by Mrinalika Roy in Bengaluru; edited by Milla Nissi and Sriraj Kalluvila
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