Duke’s 3Q’17 Earnings To Rise Backed By Customer Growth And Cost Savings

November 2nd, 2017 by Trefis Team
-5.05%
Downside
99.11
Market
94.10
Trefis
DUK: Duke Energy logo
DUK
Duke Energy

Duke Energy (NYSE:DUK), the largest U.S. power company by generation capacity, is slated to release its financial numbers for the September quarter on 3rd November 2017((Duke Energy To Announce Third Quarter Results, 2nd October 2017, Duke Website)). Since the company divested its International Energy business toward the end of 2016, the company’s 3Q’17 results are not directly comparable with those in the corresponding period of last year. That said, the company is likely to witness a steady rise in its customer base backed by the strong economic activity during the quarter. Consequently, the company’s revenue and earnings are expected to come in higher on a sequential basis.

We have a price estimate of $75 per share for the company, which is lower than its current market price. We will review our model shortly based on the company’s 3Q’17 results and guidance.

See Our Complete Analysis For Duke Energy Here

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Key Trends Witnessed In 3Q’17

  • With a steady economic growth, including a recovery in the housing market characterized by an increase in single-family housing construction, we expect Duke’s customer base in both the Electric Utilities & Infrastructure and the Gas Utilities & Infrastructure segments to grow for the third quarter.
  • Similar to the last quarter, we expect the company’s grid modernization and cost reduction efforts to generate cost savings, which help boost its operating profits and margins for the quarter.
  • The company is investing in expanding its natural gas pipeline infrastructure as well as ramping up the generation from renewables, as evident from the sharp growth in renewables generation results in 2Q’17. This will enable Duke to capitalize on the growth opportunities presented by the growing demand for gas and renewables.
  • The results of the Commercial Renewables segment will continue to benefit from new projects that were brought online in 2016.

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 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

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