Earnings Review: Lower Maintenance Costs Help Duke Post A Profit

by Trefis Team
-14.37%
Downside
87.51
Market
74.93
Trefis
DUK
Duke
Rate   |   votes   |   Share

Duke Energy (NYSE:DUK) reported financial results for the second quarter of fiscal year 2016 on Thursday, August 4th. The company reported adjusted earnings per share (EPS) of $1.07, an increase of 12.5% compared to $ 0.95 in the second quarter of last year. The gain was largely the result of a 13.6% increase in income generated from Duke’s regulated utilities division, which reported a net income of $708 million compared to $632 million in the previous year. The division benefited from lower operation and maintenance costs offsetting the impact of reduced electricity consumption per user and unfavorable weather conditions.

The company’s international power division posted a loss of $ 102 million, despite a near 25% increase in the volume of power sold over the quarter. The low value of currencies in the South American countries in which Duke operates relative to the U.S. dollar offset all of its impact. Additionally, Duke took a $181 million loss in asset impairments over the quarter. The company is already in the process of selling off this division and has received offers from many interested parties. According to management, the potential buyers are in the process of meeting regulatory compliances before submitting a formal offer. Duke is targeting an announcement on this front late this year and the sell off is supposed to be completed in 2017.

duk earnings

Going forward, Duke is looking to increase its renewable assets portfolio. It has outlined a $30 billion capital plan to have 33% of its generation to come from solar, wind and biomass sources by 2020. The company is in the process of implementing a smarter grid system to go with its new portfolio and has received regulatory approval for the same from regulators in the state of Indiana.  Additionally, it is looking to complete its acquisition of Piedmont Natural Gas. The company expects to receive regulatory approval from the North Carolina Utilities Commission for the deal and expects to close the deal “within a few days” of approval.

Have more questions about Duke? See the links below:

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Duke Energy
Interactive Institutional Research (Powered by Trefis):

Global Large CapU.S. Mid & Small CapEuropean Large & Mid Cap |More Trefis Research

Rate   |   votes   |   Share

Comments

Name (Required)
Email (Required, but never displayed)
Be the first to comment!