FPL Group, the leading U.S. wind and solar power producer, experienced a nuclear power plant shutdown and weak output from its wind farms causing it to trim its profits from a year ago. Oh, the power company still did OK, so not to worry.
So, here’s the question: Which problem can be fixed? A: Nuclear plant shutdown – or – B: weak wind output?
Read the story below, take the quiz and maybe you’ll win a cookie.
Here are a couple of hints to help you out:
- Odds are the unplanned portion of the nuclear plant shutdown is hardware or software related.
- If you’re tempted to pick weak wind output because you think El Nino is Spanish for cracked turbine blade, it’s not.
Bonus question at the end of the article.
NEW YORK, Jan 26 (Reuters) – FPL Group (FPL.N), the leading U.S. wind and solar power producer, posted better-than-expected fourth-quarter earnings but lowered the top end of its 2010 forecast, saying it did not expect a rapid recovery in Florida’s economy.
The shutdown of a nuclear power plant and weak output from its wind farms trimmed its profits from a year ago, outweighing increased weather-related demand at its utility Florida Power & Light, but the company still beat Wall Street forecasts, and its share rose.
Shares of FPL have been hurt by Florida regulators’ plan to allow its utility only a $75 million rate increase rather than the $1.3 billion, or 30 percent, it had sought.
That prompted debt rating agencies Standard & Poor’s and Moody’s to threaten to cut their ratings on FPL, and the company said it would halt about $10 billion in planned capital spending over the next five years.
“We are redoing our entire capex program to determine what changes we should make to our current capital plans,” Lewis Hay, FPL’s chairman and chief executive, told a conference call.
Net profit fell to $349 million, or 85 cents per share, from $408 million, or $1.01 per share, a year earlier.
Excluding items, earnings per share were 79 cents, beating the 76 cents that analysts had forecast, according to Thomson Reuters I/B/E/S.
Revenue was $3.66 billion, lagging the $4.01 billion that analysts had forecast.
FPL said it now expected 2010 earnings of $4.25 to $4.65 per share, compared with its previous forecast $4.25 to $4.85. Analysts have forecast $4.40.
NextEra Energy Resources, FPL’s wholesale and renewable energy arm, added nearly 1,200 megawatts of wind power capacity in 2009, bringing its total to 7,540 MW.
But that unit was hurt by the unplanned outage at its Seabrook Station nuclear plant, which reduced earnings by 13 cents per share when the plant shut in early December for about three weeks after a planned refueling outage.
Weak output from its wind turbines also weighed, said Chief Finacial Officer Armando Pimentel, as the El Nino weather pattern reduced wind during the quarter.
“Based on actual wind speed observations at public meteorological towers near our projects, this quarter was the worst quarter in this year, the worst year over the last 30 years,” he told a conference call.
The company is looking at potential wind acquisitions to add to the 1,000 MW of wind power it plans to add in 2010, he said.
Shares of FPL were up 2.4 percent to $48.90 on the New York Stock Exchange, bringing its year-to-date loss to 7.4 percent.
(Reporting by Matt Daily; Editing by Lisa Von Ahn, Dave Zimmerman)
Allegheny Treasures Bonus Question: What happens when they shut down the “dirty” coal plants and the “dangerous” nuclear sites?