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Investors Await a Pleasant Surprise by Duke Energy in 4Q16

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Duke to report on February 16

Duke Energy (DUK) plans to report its 4Q16 and fiscal 2016 results on February 16, 2017. Analysts expect DUK to report total revenues of $5.9 billion for the quarter ended December 31, 2016. For 4Q15, it posted total revenues of $5.3 billion.

Duke Energy is one of the largest regulated utilities in the US. It agreed to sell a major part of its international business this month, which could fortify its regulated operations and further boost its earnings.

DUK revenues

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Revenue drivers

Weather is expected to have a key impact on Duke Energy’s (DUK) 4Q16 earnings. Warmer-than-normal weather during the first half of 4Q16 and colder weather in the latter half of the quarter may balance Duke’s top line in the quarter.

According to the EIA (U.S. Energy Information Administration), the average residential customer should consume 3% more electricity from December 2016 to March 2017 than during the same period in the previous year.

For Duke Energy, customer base expansion is likely to boost revenues and may offset the impacts of unfavorable weather to a certain extent. Duke Energy reported average customer growth of 1.4% in 3Q16.

Duke Energy is a utility with almost entirely regulated operations. Its regulated rate base is expected to increase with the proceeds of Duke’s Latin American merchant generation asset sale and Piedmont Natural Gas.

Peers

Among Duke Energy’s peers, NextEra Energy (NEE) recently reported a significant fall in its 4Q16 revenues. Southern Company (SO) and PG&E (PCG) plan to report their quarterly financial results on February 22 and February 16, 2017, respectively.

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