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Will Duke Energy Beat Its Q1 Earnings Estimates?

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May. 7 2019, Published 11:47 a.m. ET

Duke Energy

Duke Energy (DUK), the second-biggest utility by market cap, is scheduled to report its first-quarter earnings on May 9. According to analysts’ estimates, Duke Energy will report an EPS of $1.21 for the quarter ending March 31. In the same quarter last year, the company reported an EPS of $1.28. Duke Energy has beat analysts’ EPS estimates 66% of the time in the last six quarters.

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In 2018, Duke Energy reported an EPS of $4.72—an increase of more than 3% compared to its earnings in 2018.

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Earnings drivers

According to consensus estimates, Duke Energy will report total revenues of $6.34 billion in the first quarter—compared to revenues of $6.14 billion in the first quarter of 2018. Duke Energy is the biggest regulated utility in the country. The company generates most of its earnings from regulated operations.

Duke Energy’s management expects its weather-normalized electric load growth to increase 0.5%. The company’s customer base is expected to grow 1.5% in 2019 compared to 2018. Both of these factors could have a positive impact on Duke Energy’s top line this year. Higher gas and electric rates, driven by base rate increases, could have a positive impact on Duke Energy’s earnings in 2019. Share dilution could have a negative impact on the company’s EPS.

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.

Duke Energy stock has risen almost 4% in 2019. So far, the stock has underperformed broader utilities (XLU).

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