Key Takeaways From Duke Energy’s Q1 Results

by Trefis Team
Rate   |   votes   |   Share

Duke Energy (NYSE: DUK) released its first-quarter 2018 results on May 10 and conducted a conference call with analysts the same day. The company’s results depicted a strong start to the year by beating both consensuses earnings and revenue estimates. Duke reported its first-quarter EPS (Non-GAAP) and operating revenue of $1.28 and $6.13 billion, respectively. Earnings reflected a year-on-year (y-o-y) growth rate of 23%, whereas total revenue grew by 7%. The company’s strong results were backed by a favorable weather condition in its market regions and a growth in its electric and gas utilities investments. The bottom line of the company was further supported by a decline in its tax expense as a favorable outcome of the latest tax reform.

Duke’s electric utilities and infrastructure segment realized a 28% increase in its adjusted earnings in the first quarter, largely benefiting from normal weather conditions in comparison to warmer weather in the same period last year. Total consolidated electric unit sales increased by 7.7% y-o-y and the average number of customers increased by 1.4%. Volume growth was also supported by the consequent increase in investments carried out by the company. The gas utilities and infrastructure also experienced significant y-o-y earnings growth of 19%, backed by customer growth and increased investments. However, the commercial renewable segment displayed a y-o-y decline in earnings of 25% as a result of a lower wind resource in comparison to last year.

Additionally, earnings growth across segments was augmented by the reduction in the U.S. corporate tax rate. Duke’s effective tax rate declined by almost 10% y-o-y and its total tax expense almost halved from last year’s reported amount.

Looking forward, the company maintained its adjusted EPS guidance of $4.55 to $4.85 for FY 2018, with long-term earnings growth of CAGR 4% to 6% through 2022. The company expects its strategic investments and regulatory initiatives to continue and enhance its volume and customer growth across the electric and gas utility segment. Furthermore, the prevalent positive trend in the U.S. economy with respect to employment and wages growth is expected to augment the ongoing residential demand in the country and thus support the growth in the electric utilities and infrastructure segment of the company. Our base case scenario has been kept unchanged per the company’s latest results. You can make changes to our assumptions using our interactive dashboard to arrive at your own fair price estimate for the company.


What’s behind Trefis? See How it’s Powering New Collaboration and What-Ifs

For CFOs and Finance Teams | Product, R&D, and Marketing Teams

More Trefis Research

Like our charts? Explore example interactive dashboards and create your own

Rate   |   votes   |   Share


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