Duke Energy: What Analysts Expect from Its Q4 Earnings



Duke Energy

Duke Energy (DUK), the second-largest utility by market cap, is scheduled to report its fourth-quarter and fiscal 2018 earnings on February 14. According to analysts’ estimates, Duke Energy could report an EPS of $0.89 for the quarter ending December 31. During the fourth quarter of 2017, the company reported an EPS of $0.94.

So far, Duke Energy stock has underperformed its peers this year. The stock has risen 4%, while utilities (XLU) at large have gained more than 5% YTD (year-to-date).

DUK eps

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Earnings drivers

Duke Energy is expected to report total revenues of $5.80 billion in the fourth quarter, which implies flattish growth compared to the fourth quarter of 2017. Duke Energy’s customer base expansion rate was higher than 1% YoY (year-over-year) for the last several quarters. US utilities (IDU) focused on increasing the number of customers. The electricity consumption per customer fell due to energy efficiency initiatives. Duke Energy’s investments on its rate base could have a positive impact on its revenues during the quarter.

Duke Energy’s management has given an earnings guidance range of $4.65–$4.85 per share for 2018, which is ~4% growth compared to 2017. The company aims to grow 4%–6% per year through 2022, which is in line with broader utilities’ average.

Dominion Energy (D) reported its earnings on February 1. For fiscal 2018, Dominion Energy reported an EPS of $4.05, which was ~13% higher compared to 2017. Dominion Energy’s Atlantic Coast Project, where Duke Energy and Southern Company (SO) are partners, is estimated to cost $7.0 billion–$7.5 billion. The project will likely be in service by early 2021.


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