NextEra profits beat estimates as company preps for nuclear restart

By Laila Kearney

NextEra Energy's NEE renewable power business helped the major U.S. electricity provider beat Wall Street's third-quarter profit estimates on Tuesday as the company prepares to expand its nuclear fleet to serve Big Tech data centers.

The technology industry's rapid expansion of artificial intelligence technologies requiring energy-intensive data centers is propelling U.S. power consumption to record highs and prompting huge deals to develop, restart or expand power plants.

"America is in a golden age of power demand," NextEra CEO John Ketchum said on an investor call. "Electrons can't get on the grid fast enough."

DEAL WITH GOOGLE TO RESTART IOWA NUCLEAR PLANT

NextEra and Google GOOG, on Monday, announced an agreement to restart the Duane Arnold nuclear plant in Iowa, which was shut five years ago.

The plant restart is pending regulatory review, Ketchum said on Tuesday's call. He declined to provide financial details of the 25-year power purchase agreement with Google or put a figure on the capital investment required to resurrect the plant, though he said Duane Arnold could be restarted efficiently.

NextEra Energy has ordered major equipment for the restart, with items including a power generator and cooling towers, Ketchum told Reuters on Tuesday.

The Duane Arnold plant was shut for economic reasons in 2020, the same year that a severe windstorm damaged the plant's cooling towers. In addition to the structures, which are used to cool steam released in nuclear power production, NextEra will also replace a generator at the site and a transformer.

"We have all of that equipment lined up," said Ketchum, who added that the company has completed preliminary engineering studies and initial construction work.

Much of the work for the restart would happen during a typical refueling outage, which happened at Duane Arnold every two years, Ketchum said.

As part of a broader agreement with Google, NextEra is also exploring the development of next-generation nuclear power, including small modular reactors.

Elsewhere in the company, Florida Power & Light (FPL) - NextEra's regulated electric utility - posted net income of $1.46 billion, up 13.2% from a year earlier.

FPL plans to invest about $40 billion over the next four years in energy infrastructure, including 5.3 gigawatts of solar and 3.4 GW of battery storage.

NextEra Energy Resources (NEER), which is the unregulated business that develops and operates renewable energy projects like solar and wind farms, added about 3 GW of new renewables and storage to its backlog in the quarter. Its total backlog now totals roughly 30 GW.

NEER reported net income of $1.28 billion in the third quarter, compared with $1.22 billion a year earlier.

NextEra reported quarterly revenue of $7.97 billion, compared with $7.57 billion in the same quarter last year.

The company earned $1.13 per share on an adjusted basis, compared with analysts' average estimate of $1.02, according to data compiled by LSEG.

Despite surpassing Wall Street estimates, shares of NextEra Energy were down about 2% at midday after rising by roughly the same amount in pre-market trading.