What To Expect From Duke’s First Quarter Results

by Trefis Team
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Duke Energy (NYSE: DUK) will release its first-quarter 2018 results on May 10 and conduct a conference call with analysts the same day. Consensus market estimates suggest a mean EPS (Non-GAAP) estimate of $1.14 per share, 10% higher year-on-year (y-o-y) and a mean revenue estimate of $5.78 billion, similar to its Q1 2017 level. The company expects its 2018 earnings growth to be backed by its continuous and regulated investments and attractive service offerings in its key regions.

Duke expects its 2018 EPS to be between the range of $4.55 and $4.85 per share, 3% higher y-o-y (assuming mid-points). A strengthening U.S. economy is expected to cater to this growth rate. However, revenue is not expected to display significant growth in the first quarter of 2018 as the U.S. housing market construction remained subdued during the quarter as a result of lack of buildable lots and an increasing material costs. Nevertheless, we expect the company’s continued grid modernization and cost reduction efforts to generate cost savings for the quarter which should enhance the company’s operating profits and margins.

Duke continues to remain focused on increasing its proportionate share of electricity generation from non-carbon emitting sources, including wind, solar, and biomass. As per the company’s latest projections, Duke by 2030 aims to achieve more than 80% (vs 67% currently) of its energy generation to emit either low levels of carbon or no carbon at all. The company projects its fuel composition by 2030 to comprise of 16% contribution from coal, 32% from nuclear power, 42% from natural gas, and 10% from renewable sources. Since per unit generation costs of energy from renewable sources are higher for utility companies, it will be interesting to see if the company decides to pass these costs on to the consumer and risk slow adoption or whether it chooses to take losses in order to grow customer sign up rates.

Our key expectations for the company’s 2018 results are summarized in our interactive dashboard. You can make changes to our assumptions in case you have a different outlook and arrive at your own fair price estimate for the company.


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