Duke Energy’s Q1 EPS fell

Duke Energy (DUK), the second-biggest utility by market cap, reported its first-quarter earnings today. It reported adjusted earnings of $1.24 per share for the quarter ending March 31. In the same quarter last year, it reported earnings of $1.28 per share. Milder weather and share dilution negatively affected Duke Energy’s EPS in Q1 2019. Duke Energy’s management kept its EPS guidance range of $4.80 to $5.20 per share for 2019, indicating earnings growth of ~6% YoY.

Highlights from Duke Energy’s Q1 2019 Earnings

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Earnings highlights

The utility’s total revenues came in at $6.16 billion in Q1 2019, implying flattish growth compared to Q1 2018. Duke Energy’s average number of customers in its electric segment increased 1.6% during the quarter against the same period last year. The positive impact of its higher customer base on its revenues could have been offset by lower electric consumption. Duke Energy’s total electric sales during the quarter fell by 4.5% compared to Q1 2018.

In Q1 2019, Duke Energy’s power generation from renewables and natural gas notably increased in order to shift away from coal. It generated ~23% of its power from coal in Q1 2019, down from 33% in Q1 2018.

Due to Duke Energy’s large regulated operations, its earnings are relatively stable and predictable. The company intends to grow its EPS 4%–6% through 2023 in line with utilities at large.

Duke Energy stock has been weak recently. It is up about 4% so far this year, while the Utilities Select Sector SPDR ETF (XLU), which is representative of top utility stocks, is up almost 10% in the same period.

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