Duke Stumbles Over Weak Earnings

Duke Energy Corp. (NYSE: DUK) reported its third-quarter financial results before the markets opened on Thursday. The company had of $1.47 in earnings per share (EPS) on $6.48 billion in revenue. That compared to Thomson Reuters consensus estimates of $1.52 in EPS on revenue of $6.87 billion. In the same period of the previous year, the utility posted EPS of $1.40 and $6.40 billion in revenue.

So far in 2015, the company has been able to offset weakness in the international business with favorable weather, solid operational performance in the regulated business and benefits from closing certain strategic initiatives earlier than anticipated.

Duke has slightly lowered its 2015 EPS guidance range to $4.55 to $4.65 from $4.55 to $4.75. Consensus estimates for the full year call for $4.63 in EPS on $24.91 billion in revenue.

In terms of its segments Duke reported:

  • Regulated electric reported $6.02 billion in revenue, up 2.7% from last year.
  • Nonregulated electric and other reported $337 million, down 25%.
  • Regulated natural gas reported $89 million, up 4.7%.

In connection with the transaction to sell its Midwest Generation business to Dynegy for $2.8 billion, which closed in early April, Duke completed a $1.5 billion accelerated stock repurchase program.

Lynn Good, president and CEO of Duke, commented on earnings:

I am pleased with our overall operational and financial performance to date in 2015. We are on-track to achieve our financial objectives for the year and our regulated generation fleet continues to reliably meet customer needs.

She added:

Additionally, we are taking significant steps to grow our low-risk regulated business mix as highlighted by last week’s announced acquisition of Piedmont Natural Gas, which provides us with additional capabilities and growth potential around natural gas infrastructure.

On the books, this utility giant had $1.37 billion in cash and cash equivalents at the end of September, compared to $2.04 billion at the end of December 2014.

Shares of Duke Energy traded down 0.6% at $71.50 midday Thursday. It has a consensus analyst price target of $78.50 and a 52-week trading range of $67.27 to $89.97.

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