NEXTERA ENERGY INC: profit nearly doubled, but half came from one-offs while EBITDA fell 10%

On 21 October NEXTERA ENERGY INC released third-quarter 2026 results. Revenue rose 9.5% year on year to $8,100 million, but EBITDA fell 10.1% to $4,157 million while net profit nearly doubled, up 95.9% to $4,775 million. The profit jump came not from operations but from one-offs: the filing shows hedge and nuclear-decommissioning-fund remeasurement adjustments added $2,955 million pre-tax, whereas a year earlier they worked against profit. Our conclusion: rather unattractive – EV/EBITDA of 18.6 against its own three-year average of 16.9, a 10% premium to history, outweighs the strong top-line growth. Our view: the share is rather unattractive at the current price; no portal model for this share; EV/EBITDA 18.6 against a 3-year average of 16.9, a 10% premium to its history.

Our view: is there upside

Our view in numbers

Key takeaways

— Revenue rose 9.5%, but growth slowed from 17.7% a quarter earlier

— EBITDA fell 10.1% and the margin compressed from 62.5% to 51.3%

— Net profit nearly doubled on one-offs, not operations

— Leverage of 6.55x EBITDA is a level, not a trend

— Operating cash flow of $5,046 million covers capex of $2,459 million

— Dividend yield of 2.82% is modest for its history and does not offset the multiple premium

— EV/EBITDA of 18.6 against its own average of 16.9 is a 10% premium to history

Key figures, USD bn

Revenue rose 9.5%, but growth slowed from 17.7% a quarter earlier

In the third quarter of 2026 revenue was $8,100 million, up 9.5% year on year. That is a strong result, but noticeably slower than the previous quarter: in the second quarter growth was 17.7%. The slowdown came after a very high base in the second quarter, when revenue reached $7,534 million.

By segment, the filing shows FPL provides the bulk of revenue at $5,421 million, while NextEra Energy Resources brings $2,516 million and corporate and other $153 million. A year earlier FPL generated $5,285 million and the resources segment $2,566 million, so growth came from the regulated part, not from generation.

For assessing sustainability, it matters that FPL's revenue growth is accompanied by a 9.2% year-on-year increase in regulatory capital employed, as the company reports. This means revenue grows with investment, not through one-off factors.

EBITDA fell 10.1% and the margin compressed from 62.5% to 51.3%

EBITDA for the third quarter of 2026 was $4,157 million against $4,623 million a year earlier – a 10.1% decline. This diverges from revenue growth and means costs grew faster than income. The EBITDA margin fell from 62.5% to 51.3%.

The filing shows operating profit rose to $2,624 million from $2,527 million, but depreciation and amortisation fell to $1,651 million from $2,096 million. It was the drop in depreciation that supported operating profit, while EBITDA, which adds depreciation back, came under pressure from other factors.

The company does not disclose the reason for the EBITDA decline in the press release, but the report's structure shows that in the NextEra Energy Resources segment operating profit fell to $455 million from $801 million a year earlier. That was the main source of weakness in consolidated EBITDA.

Net profit nearly doubled on one-offs, not operations

Net profit in the third quarter of 2026 was $4,775 million against $2,438 million a year earlier – growth of 95.9%. However, the income statement shows pre-tax adjustments including non-qualifying hedge losses of $3,005 million, a change in unrealised losses on nuclear decommissioning fund securities of $49 million, XPLR investment gains of $9 million and merger-related expenses of $19 million.

These items totalled $2,955 million pre-tax, and after the tax effect adjusted earnings were $2,592 million, or $1.24 per share, against $2,348 million, or $1.13, a year earlier. That is, adjusted earnings grew only 10.4%, not 95.9%.

The gap between GAAP and adjusted profit shows that the GAAP profit increase was almost entirely due to one-offs, not operational improvement. For assessing earnings sustainability the adjusted figure matters more, and it grows far more modestly.

Leverage of 6.55x EBITDA is a level, not a trend

Net debt as of 30 September 2026 was $100,379 million. The ratio of net debt to trailing-twelve-month EBITDA is 6.55. That is a high level for a company with a regulated business, but it reflects a growth model built on capital investment.

The facts do not include a prior value for this ratio, so it cannot be said that leverage rose or fell. Only the level can be stated: 6.55x EBITDA is a significant burden that limits financial flexibility.

Interest expense in the filing is $1,929 million, but this figure includes internal reallocations between segments. For assessing the cost of debt, it matters more that the company continues to invest in its regulated base, which supports future cash flows.

Operating cash flow of $5,046 million covers capex of $2,459 million

Operating cash flow in the third quarter of 2026 was $5,046 million, while capital expenditures were $2,459 million. Free cash flow is therefore positive at about $2,587 million, which covers dividend payments.

For comparison, a year earlier operating cash flow was $4,028 million and capital expenditures $2,450 million. A 25% increase in cash flow with almost unchanged investment means the company generates more money to service debt and pay shareholders.

It is worth noting, however, that capital expenditures in the regulated FPL segment were about $2.4 billion for the quarter, with the full year expected at $12 billion. This means free cash flow can be volatile from quarter to quarter.

Dividend yield of 2.82% is modest for its history and does not offset the multiple premium

The trailing-twelve-month dividend yield is 2.82%. The company says it expects to grow dividends per share at roughly 10% a year through 2026 and 6% a year from end-2026 through 2028. This means the current dividend is not the main argument for buying.

At a share price of $78.86 before the release, a 2.82% yield looks modest for a company with this debt burden. For comparison, yields on risk-free instruments in the US are currently higher, making the dividend less attractive.

Our estimate for the 2026 dividend is based on the stated 10% growth policy and the earnings base. However, if adjusted earnings grow less than expected, dividend growth could slow. A dividend cut is possible only with a significant deterioration in cash flow, which is not currently observed.

EV/EBITDA of 18.6 against its own average of 16.9 is a 10% premium to history

The trailing-twelve-month EV/EBITDA multiple is 18.6, while its own three-year average is 16.9. This means the share trades at a 10% premium to its history. For a company with slowing revenue growth and falling EBITDA, such a premium looks unjustified.

The trailing-twelve-month P/E is 21.3, also above historical levels, though an exact comparison is difficult. Market capitalisation is $180,945 million and net debt $100,379 million, giving a significant EV.

The premium to history could be justified by expectations for the pending merger with Dominion Energy, which the company says should close in the second half of 2027. However, regulatory risks and the long timeline make this premium vulnerable.

Valuation on the latest reported figures

Bottom line

The strong points of the report remain revenue growth of 9.5% and positive free cash flow that covers the dividend. However, profit growth was almost entirely due to one-offs, while adjusted earnings grew only 10.4%. EBITDA fell 10.1% and the margin compressed to 51.3%. Leverage of 6.55x EBITDA remains high. The share trades at a 10% premium to its own history on EV/EBITDA, which is not justified by current dynamics. Our conclusion: rather unattractive – EV/EBITDA of 18.6 against an average of 16.9, a 10% premium. Our view: the share is rather unattractive at the current price; no portal model for this share; EV/EBITDA 18.6 against a 3-year average of 16.9, a 10% premium to its history.