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Duke Energy’s Expected 4Q17 Earnings and Outlook

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Feb. 15 2018, Published 8:35 a.m. ET

Earnings

According to analysts’ estimates, Duke Energy (DUK) is expected to report an EPS (earnings per share) of $0.92 per share for the quarter ending on December 31, 2017. For the same quarter in 2016, Duke Energy reported an EPS of $0.81—a year-over-year increase of more than 13% in Duke Energy’s EPS.

For fiscal 2017, Duke Energy is expected to report earnings of $4.56 per share—in line with its guidance. Duke Energy is aiming for a long-term annual earnings growth rate of 4%–6%, which is similar to the industry average (XLU).

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Earnings drivers

Duke Energy’s earnings for the quarter are expected to mainly be driven by investments in its regulated rate base. Duke Energy’s gas operations have been expanding in the last few quarters after the Piedmont Natural Gas acquisition.

Tax reforms approved by Congress in December last year will likely offer slight or no benefits to regulated utilities in the country. On the flipside, these utilities might have to pass on the discounts received by tax cuts to their customers in terms of lower power rates.

Duke Energy’s capital investments in midstream projects increased significantly in the last few years due to lower growth opportunities in the electric domain. Duke Energy is a partner with Southern Company (SO) and Dominion Energy (D) in the Atlantic Coast Pipeline project. The project is expected to start commercial operations by the middle of 2019.

Duke Energy’s large exposure to regulated operations facilitates stable and predictable earnings. Duke Energy’s decent earnings growth is expected to enable fair dividend per share growth for the next few years. To learn more about Duke Energy’s dividends, read Analyzing Duke Energy before Its Ex-Dividend Date.

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