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What Could Drive Duke Energy’s 4Q17 Revenues?

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Analysts expect higher revenues

Duke Energy (DUK), the second-largest utility by market capitalization, will report its 4Q17 and fiscal 2017 earnings on February 20, 2018. According to Wall Street analysts’ estimates, Duke Energy is expected to report total revenues of $6.2 billion for the quarter ending on December 31, 2017. Duke Energy reported revenues of $4.8 billion for 4Q16.

Utilities have been trading weak for the last few months. Duke Energy stock has been one of the laggards among the constituents of the S&P 500 Utilities Index. Will Duke Energy’s earnings help its stock next week?

DUK rev

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Revenue drivers

Duke Energy’s retail electric volume growth in 2017 was almost flat. For the rolling 12 months ended on September 30, 2017, its electric volume growth was ~0.2%—compared to the same period in 2016. Declining electricity consumption per customer prompted by energy efficiency programs has been impacting utilities’ (VPU) (XLU) top lines.

Duke Energy’s customer base expansion has been offsetting the impact to some extent. Annual growth in the number of residential electric customers stood at 1.4%, while Duke Energy’s gas customers increased 1.3% compared to 2016. Population migration to the Southeast region continued to drive Duke Energy’s customer base and revenue growth in the last few quarters.

Southern Company (SO) plans to report its quarterly earnings on February 21, 2018. PG&E (PCG) reported its quarterly earnings last week. To learn more, read How California Wildfires Impacted PG&E’s 4Q17 Earnings.

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