Duke’s Earnings To Surge Backed By Improving Economic Activity

by Trefis Team
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Duke Energy (NYSE:DUK) is slated to release its financial numbers for the December quarter and full year 2017 on February 20. [1] Since the company divested its International Energy business toward the end of 2016, the company’s 4Q’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 stronger economic activity during the quarter. Consequently, the company’s revenue and earnings are expected to come in higher on a sequential as well as annual basis. We have a price estimate of $84 per share for Duke, which is close to its current market price.

Key Trends Witnessed In 4Q’17

  • With 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 December quarter as well as full year 2017.

  • Similar to the last quarter, we expect the company’s grid modernization and cost reduction efforts to generate cost savings, which should 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 the previous quarters. 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.

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  1. Duke Energy To Announce December Quarter Results, 9th January 2018, Duke Website []
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