Zacks_Analysts' Blog : NextEra Energy's Unit Issues Notes - Analyst Blog

NextEra Energy Inc. (NEE) announced that its subsidiary Florida Power & Light Company ('FPL') will sell $250 million of first mortgage bonds yielding 5.125% interest per year and maturing on June 1, 2041. The offer price of the bonds is $99.91 (per $100.00 principal) and is supposed to yield 5.131%, at the end of the maturity period.

NextEra Energy's unit will use the proceeds to repay a portion of its outstanding commercial paper obligations and for other corporate purposes.

NextEra Energy's long-term debts as of March 31, 2011, were $18.3 billion versus $18 billion as of December 31, 2010. The debt-to-equity ratio at the end of the first quarter 2011 was 47%, deteriorating from 44% at the end of 2010, mainly due to the issue of new debts in the quarter under review. During the first four months of 2011, NextEra Energy's subsidiaries issued four series of debts which amounted to $371 million.

Interest expenses in the first quarter 2011 swelled by 6.7% to $254 million from $238 million at the end of first quarter 2010 owing to a higher debt level. We expect the interest expenses to increase further in the coming quarters with the issue of new debts.

During the first quarter earnings call, NextEra Energy upgraded its 2011 earnings guidance to a range of $4.35 to $4.65 per share from the prior range of $4.25 to $4.55 per share. The 10-cent hike was due to changes in the estimated life of a portion of the company’s wind fleet.

The Zacks Consensus Estimates for second-quarter 2011, fiscal year 2011 and fiscal year 2012 are $1.06 per share, $4.47 per share and $4.74 per share, respectively.

NextEra Energy currently retains a Zacks #3 Rank (short-term Hold rating). We maintain our long-term Neutral rating on the stock. The company competes with Progress Energy Inc. (PGN) and Southern Company (SO).

Based in Juno Beach, Florida, NextEra Energy Inc., through its subsidiaries, engages in the generation, transmission, distribution and sale of electric energy in Florida.