NextEra beats profit estimates as data center power demand lifts utility growth

Wind turbines at the San Gorgonio Pass wind farm, owned by NextEra Energy Inc., in Whitewater, California, U.S., on Wednesday, Feb. 17, 2021. Riverside County set up a three-day mobile vaccination clinic at Sea View Packing, where Medjool dates and other fruits are packed, as part of an effort to innoculate local agricultural workers. Photographer: Bing Guan/Bloomberg

NextEra Energy beat Wall Street estimates for second-quarter profit on Friday, driven by rising electricity demand from data centers that boosted its utility and renewable energy businesses.

U.S. utilities are investing billions of dollars to expand power generation and transmission as technology companies and data centers race to secure electricity.

NextEra, one of the world’s largest renewable energy developers, is among the companies attempting to seize on that growth, including with a series of data center hubs that it is developing.

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The company also plans to restart the Duane Arnold nuclear plant in Iowa to supply power to Google data centers. On a post-earnings call, CEO John Ketchum said NextEra had acquired the remaining 30 per cent stake in Duane Arnold from its cooperative partners, giving it full ownership.

However, it has not yet finalized the natural gas-fired power projects that are backed by a U.S.-Japan initiative, Ketchum added. The gas-based plants have a combined capacity of nearly 10 GW.

NextEra is also moving ahead on its agreement to buy Dominion Energy D.N in a $66.8 billion deal that would create one of the world’s largest electric utilities and broaden its regulated footprint across fast-growing U.S. markets.

The deal is under regulatory review after drawing opposition from U.S. Senator Angus King, who argued it would concentrate too much market power in one company.

Florida Power & Light, the company’s regulated utility, posted a 10.2 per cent rise in quarterly net income to $1.41 billion.

FPL continues to see about 21 GW of hyperscaler opportunities in its pipeline, including nearly 12 GW under advanced negotiations, NextEra said. It expects to sign at least one agreement under its large-load tariff by year-end, the company added.

NextEra Energy Resources, its renewable energy unit, reported a net income of $1.63 billion, up 66.2 per cent, and added 3.6 GW of storage projects, taking its backlog to about 35.1 GW.

The company earned $1.15 per share on an adjusted basis in the quarter, above analysts’ average estimate of $1.11, according to data compiled by LSEG.

(Reporting by Katha Kalia in Bengaluru. Additional reporting by Laila Kearney in New York; Editing by Leroy Leo)