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Duke Energy (DUK) Q3 Earnings Top Estimates, Revenues Up Y/Y

Duke Energy Corporation DUK reported third-quarter 2019 earnings of $1.79 per share, which surpassed the Zacks Consensus Estimate of $1.69 by 5.9%. The bottom line also improved 8.4% year over year, driven by higher revenues and operating income growth.

Total Revenues

Total operating revenues came in at $6,940 million, up 4.7% from $6,628 million a year ago. The reported figure also exceeded the Zacks Consensus Estimate of $6,816 million by 1.8%.

The Regulated electric unit’s revenues were $6,515 million (up 4.8% year over year), representing 93.9% of total revenues in the quarter.

Revenues from the regulated natural gas business totaled $223 million, down 3% year over year.

The Non-regulated and Other segment generated revenues of $202 million, which improved 11% year over year.

Operational Update

Duke Energy’s total operating expenses amounted to $5,011 million in the reported quarter, down 1% year over year. The decline was driven by lower natural gas costs, reduced operation, maintenance and other expenses, and decreased impairment charges.

Operating income increased 22.2% to $1,929 million from $1,579 million a year ago.

Interest expenses rose to $572 million from $517 million in 2018’s third quarter.

Segmental Highlights

Electric Utilities & Infrastructure: Net reported income in the third quarter totaled $1,385 million, which was higher than the year-ago quarter’s $1,167 million.  

Gas Utilities & Infrastructure: Net reported income at this segment summed $26 million, up from $17 million a year ago.

Commercial Renewables: This segment witnessed a net reported income of $40 million in the quarter under review, against a net reported loss of $62 million in the year-ago quarter.

Other: The segment includes corporate interest expenses not allocated to other business units, results from Duke Energy’s captive insurance company and other investments.

This segment incurred a net reported loss of $124 million compared with a loss of $44 million in the year-ago quarter.

Duke Energy Corporation Price, Consensus and EPS Surprise

Financial Condition

As of Sep 30, 2019, Duke Energy had cash & cash equivalents of $379 million, down from $442 million as on Dec 31, 2018. Long-term debt was $54.8 billion at the end of the third quarter compared with $51.1 billion at 2018-end.

In the first nine months of 2019, the company generated net cash from operating activities of $5,637 million compared with $5,667 million in the prior year.

Guidance

Duke Energy has narrowed its 2019 adjusted EPS guidance. It expects adjusted earnings per share of $4.95-$5.15. The Zacks Consensus Estimate for 2019 earnings is pegged at $4.98 per share, below the mid-point of the company’s projected range. The company reaffirms long-term earnings growth target of 4-6%.

Zacks Rank

Duke Energy currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Utility Releases

NextEra Energy NEE reported third-quarter 2019 adjusted earnings of $2.39 per share, beating the Zacks Consensus Estimate of $2.27 by 5.3%. Moreover, earnings rose 10.1% on a year-over-year basis.

Entergy Corporation ETR reported third-quarter 2019 adjusted earnings of $2.52 per share, which surpassed the Zacks Consensus Estimate of $2.31 by 9.1%. Moreover, the reported figure rose 7.2% from $2.35 per share in the year-ago quarter.

Public Service Enterprise Group PEG, or PSEG, reported third-quarter 2019 adjusted operating earnings of 98 cents per share, which surpassed the Zacks Consensus Estimate of 95 cents by 3.2%. The bottom line also improved 3.2% on a year-over-year basis.

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