FPL Parent NEE Sees Revenue Growth, But Rising Costs Hit Q3 Operating Income

TL;DR

**NEE's revenue is up, but soaring interest and depreciation costs are eating into profits, making it a hold until cost pressures ease.**

AI Summary

FLORIDA POWER & LIGHT CO (FPL) and NextEra Energy, Inc. (NEE) reported a mixed financial performance for the three and nine months ended September 30, 2025. NEE's operating revenues increased to $7,966 million for the three months ended September 30, 2025, up from $7,567 million in the prior year, and to $20,912 million for the nine months, up from $19,368 million. However, operating income for NEE decreased to $2,527 million for the three-month period, down from $2,856 million, primarily due to a significant increase in depreciation and amortization expenses, which rose to $2,096 million from $1,642 million. Interest expense also surged to $(1,153) million for the quarter, compared to $(1,817) million in the prior year, and to $(3,987) million for the nine months, up from $(2,960) million. Gains on disposal of businesses/assets decreased to $143 million from $231 million for the quarter. The company faces ongoing regulatory and development risks, including the ability to recover costs and potential impacts from changes in clean energy incentives.

Why It Matters

This filing reveals that while NextEra Energy, Inc. (NEE), FPL's parent company, is growing its top-line revenue, its profitability is being squeezed by increasing operating expenses, particularly depreciation and amortization, and a substantial rise in interest expenses. This trend could impact NEE's ability to fund future capital projects and maintain its dividend growth, directly affecting investors. For customers, these rising costs could eventually translate into higher utility rates, especially if FPL struggles to recover costs through regulatory mechanisms. In the broader market, NEE's performance, as a major player in the clean energy transition, signals potential headwinds for the utility sector, particularly concerning capital-intensive infrastructure development and the cost of financing.

Risk Assessment

Risk Level: medium — The risk level is medium due to significant increases in operating expenses, specifically depreciation and amortization rising to $2,096 million from $1,642 million for the three months ended September 30, 2025, and interest expense surging to $(3,987) million for the nine months from $(2,960) million. These cost pressures could impact future profitability and cash flow, despite revenue growth.

Analyst Insight

Investors should closely monitor NEE's upcoming earnings calls for management's strategy on mitigating rising interest and depreciation costs. Consider holding existing positions but deferring new investments until there's clearer evidence of cost control or improved regulatory recovery mechanisms for FPL.

Financial Highlights

revenue

$7,966M

operating Margin

31.7%

net Income

$2,135M

eps

$1.18

revenue Growth

+5.3%

Revenue Breakdown

Key Numbers

• $7.966B — Operating Revenues (3 months) (Increased from $7.567B in Q3 2024, showing top-line growth.)
• $2.527B — Operating Income (3 months) (Decreased from $2.856B in Q3 2024, indicating pressure on profitability.)
• $2.096B — Depreciation and Amortization (3 months) (Increased significantly from $1.642B in Q3 2024, a major contributor to reduced operating income.)
• $(3.987)B — Interest Expense (9 months) (Increased substantially from $(2.960)B in the prior nine-month period, impacting net income.)
• $143M — Gains on Disposal of Businesses/Assets (3 months) (Decreased from $231M in Q3 2024, reducing non-operating income.)
• 2,082,609,684 — Shares Outstanding (NEE) (As of September 30, 2025.)

Key Players & Entities

• FLORIDA POWER & LIGHT CO (company) — utility company
• NextEra Energy, Inc. (company) — parent company and registrant
• U.S. Securities and Exchange Commission (regulator) — filing recipient
• Florida Public Service Commission (regulator) — regulates FPL
• XPLR Infrastructure, LP (company) — formerly NextEra Energy Partners, LP
• NextEra Energy Resources, LLC (company) — operating segment of NEE
• NextEra Energy Capital Holdings, Inc. (company) — subsidiary of NEE
• NextEra Energy Transmission, LLC (company) — operating segment of NEE

FAQ

Risk Factors

• Cost Recovery and Regulatory Approval [high — regulatory]: FPL faces ongoing risks related to its ability to recover costs incurred for new projects and infrastructure investments through regulatory rate approvals. Delays or denials in rate cases could impact financial performance.
• Changes in Clean Energy Incentives [medium — market]: The company's financial results can be affected by changes in federal, state, and local incentives for clean energy development. Reductions or eliminations of these incentives could impact the economics of renewable energy projects.
• Depreciation and Amortization Expenses [medium — operational]: A significant increase in depreciation and amortization expenses, rising to $2,096 million for the quarter from $1,642 million in the prior year, directly reduced operating income. This suggests substantial capital investments or changes in asset useful life estimations.
• Rising Interest Expenses [medium — financial]: Interest expense surged to $(1,153) million for the quarter and $(3,987) million for the nine months, impacting net income. This indicates increased borrowing or higher interest rates on existing debt.
• Decreased Gains on Disposal of Assets [low — financial]: Gains on disposal of businesses/assets decreased to $143 million from $231 million for the quarter, reducing non-operating income and contributing to a less favorable financial outcome compared to the prior year.

Industry Context

The utility sector, particularly for companies like FPL and its parent NEE, is characterized by significant capital investment in infrastructure and a growing emphasis on renewable energy sources. The industry faces evolving regulatory landscapes and increasing pressure to decarbonize operations while ensuring reliable service delivery. Competition exists from other utilities, independent power producers, and emerging energy technologies.

Regulatory Implications

FPL operates in a heavily regulated environment where its ability to set rates and recover costs is subject to approval by state utility commissions. Changes in regulatory policy, particularly concerning environmental standards and cost recovery mechanisms for new energy projects, pose significant risks. The company must navigate these regulations to maintain profitability and fund future investments.

What Investors Should Do

1. Monitor regulatory filings and rate case outcomes.
2. Analyze the impact of rising interest rates and debt levels.
3. Assess the company's strategy for clean energy transition and associated costs.

Glossary

Operating Revenues

The total amount of money generated from the company's primary business activities before deducting expenses. (Indicates the company's top-line performance and market demand for its services.)

Operating Income

Profitability from core business operations after deducting operating expenses but before accounting for interest and taxes. (Measures the efficiency of the company's operations and its ability to generate profit from its main activities.)

Depreciation and Amortization

The systematic allocation of the cost of tangible assets (depreciation) and intangible assets (amortization) over their useful lives. (A significant non-cash expense that impacts operating income; an increase suggests new capital expenditures or changes in accounting estimates.)

Interest Expense

The cost incurred by a company for borrowed funds. (Directly reduces net income; an increase can signal higher debt levels or rising interest rates.)

Gains on Disposal of Businesses/Assets

Profits realized from selling off parts of the company or specific assets. (Contributes to non-operating income; a decrease can reduce overall profitability compared to periods with higher gains.)

Net Income Attributable to NEE

The portion of the company's net income that belongs to the shareholders of NextEra Energy, Inc. after accounting for noncontrolling interests. (Represents the bottom-line profit available to NEE's shareholders.)

Earnings Per Share (EPS)

The portion of a company's profit allocated to each outstanding share of common stock. (A key metric for investors to assess profitability on a per-share basis.)

Year-Over-Year Comparison

For the three months ended September 30, 2025, NextEra Energy, Inc. (NEE) reported increased operating revenues ($7,966M vs $7,567M), indicating top-line growth. However, operating income declined ($2,527M vs $2,856M) primarily due to a significant rise in depreciation and amortization expenses ($2,096M vs $1,642M). Interest expense also increased substantially over the nine-month period ($(3,987)M vs $(2,960)M), further pressuring profitability. Gains on asset disposals were also lower this quarter ($143M vs $231M).

Key Financial Figures

• $0.01 — red NextEra Energy, Inc. Common Stock, $0.01 Par Value NEE New York Stock Exchange

Filing Documents

• nee-20250930.htm (10-Q) — 2971KB
• nee-q32025xex10a.htm (EX-10.A) — 231KB
• nee-q32025xex10b.htm (EX-10.B) — 230KB
• nee-q32025xex10c.htm (EX-10.C) — 57KB
• nee-q32025xex22.htm (EX-22) — 15KB
• nee-q32025xex31a.htm (EX-31.A) — 10KB
• nee-q32025xex31b.htm (EX-31.B) — 10KB
• nee-q32025xex31c.htm (EX-31.C) — 10KB
• nee-q32025xex31d.htm (EX-31.D) — 11KB
• nee-q32025xex32a.htm (EX-32.A) — 8KB
• nee-q32025xex32b.htm (EX-32.B) — 8KB
• nee-20250930_g1.jpg (GRAPHIC) — 290KB
• nee-20250930_g2.jpg (GRAPHIC) — 56KB
• 0000753308-25-000056.txt ( ) — 16099KB
• nee-20250930.xsd (EX-101.SCH) — 91KB
• nee-20250930_cal.xml (EX-101.CAL) — 92KB
• nee-20250930_def.xml (EX-101.DEF) — 540KB
• nee-20250930_lab.xml (EX-101.LAB) — 991KB
• nee-20250930_pre.xml (EX-101.PRE) — 670KB
• nee-20250930_htm.xml (XML) — 3000KB

Forward-Looking Statements

Forward-Looking Statements 4

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements 7 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 43 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 56 Item 4.

Controls and Procedures

Controls and Procedures 56

– OTHER INFORMATION

PART II – OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 57 Item 1A.

Risk Factors

Risk Factors 57 Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities 57 Item 5 . Other Information 57 Item 6. Exhibits 58

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS This report includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions, strategies, future events or performance (often, but not always, through the use of words or phrases such as: may result, are expected to, will continue, is anticipated, believe, will, could, should, would, estimated, may, plan, potential, future, projection, goals, target, outlook, predict and intend or words of similar meaning) are not statements of historical facts and may be forward looking. Forward-looking statements involve estimates, assumptions and uncertainties. Accordingly, any such statements are qualified in their entirety by reference to, and are accompanied by, the following important factors (in addition to any assumptions and other factors referred to specifically in connection with such forward-looking statements) that could have a significant impact on NEE's and/or FPL's operations and financial results, and could cause NEE's and/or FPL's actual results to differ materially from those contained or implied in forward-looking statements made by or on behalf of NEE and/or FPL in this combined Form 10-Q, in presentations, on their respective websites, in response to questions or otherwise. Regulatory, Legislative and Legal Risks NEE's and FPL's business, financial condition, results of operations and prospects may be materially adversely affected by the extensive regulation of their business. NEE's and FPL's business, financial condition, results of operations and prospects could be materially adversely affected if they are unable to recover in a timely manner any significant amount of costs, a return on certain assets or a reasonable return on invested capital through base rates, cost recovery clauses, other regulatory mechanisms or otherwise. Regulatory decisions that are important t

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements NEXTERA ENERGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (millions, except per share amounts) (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 OPERATING REVENUES $ 7,966 $ 7,567 $ 20,912 $ 19,368 OPERATING EXPENSES Fuel, purchased power and interchange 1,423 1,451 3,771 3,937 Other operations and maintenance 1,410 1,247 3,803 3,541 Depreciation and amortization 2,096 1,642 4,964 3,949 Taxes other than income taxes and other – net 653 602 1,877 1,721 Total operating expenses – net 5,582 4,942 14,415 13,148 GAINS ON DISPOSAL OF BUSINESSES/ASSETS – NET 143 231 197 318 OPERATING INCOME 2,527 2,856 6,694 6,538 OTHER INCOME (DEDUCTIONS) Interest expense ( 1,153 ) ( 1,817 ) ( 3,987 ) ( 2,960 ) Equity in earnings (losses) of equity method investees 204 237 ( 266 ) 599 Allowance for equity funds used during construction 48 50 130 147 Gains on disposal of investments and other property – net 68 1 169 132 Change in unrealized gains (losses) on equity securities held in NEER's nuclear decommissioning funds – net 63 108 65 148 Other net periodic benefit income 67 66 201 171 Other – net 61 95 206 218 Total other income (deductions) – net ( 642 ) ( 1,260 ) ( 3,482 ) ( 1,545 ) INCOME BEFORE INCOME TAXES 1,885 1,596 3,212 4,993 INCOME TAX EXPENSE (BENEFIT) ( 250 ) 5 ( 1,027 ) 168 NET INCOME 2,135 1,591 4,239 4,825 NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS 303 261 1,061 918 NET INCOME ATTRIBUTABLE TO NEE $ 2,438 $ 1,852 $ 5,300 $ 5,743 Earnings per share attributable to NEE: Basic $ 1.18 $ 0.90 $ 2.57 $ 2.80 Assuming dilution $ 1.18 $ 0.90 $ 2.57 $ 2.79 This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2024 Form 10-K. 7 NEXTERA ENERGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (millions) (unaudited) Three Months Ended September 30, Nine Months

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