Back to top

Image: Shutterstock

Duke Energy (DUK) to Report Q2 Earnings: What's in Store?

Read MoreHide Full Article

Duke Energy Corporation (DUK - Free Report) is set to report second-quarter 2020 results on Aug 10, before the opening bell. In the last-reported quarter, the company delivered a negative earnings surprise of 5.79%.

However, the bottom line surpassed the Zacks Consensus Estimate in three of the last four quarters and missed in one, with the average earnings surprise being 4.46%.

Let’s see how things have shaped up prior to this announcement.

Factors to Consider

Thanks to the COVID-19 pandemic and the following stay-at-home directive, Duke Energy has been witnessing lower retail sales volume since the start of the second quarter. In April 2020, commercial and industrial usage of electricity was down 10% and 13% respectively, while residential sales were up 6%. Overall, retail sales were down 5% year over year. A similar trend is likely to have continued in the other two months of the second quarter.

The decline in retail sales volumes is expected to have dragged down Duke Energy’s revenues in the soon-to-be-reported quarter.

Duke Energy Corporation Price and EPS Surprise

Duke Energy Corporation Price and EPS Surprise

Duke Energy Corporation price-eps-surprise | Duke Energy Corporation Quote

However, the majority of Duke Energy’s service territories witnessed more or less average temperature that is expected to have favored the utility’s top-line performance in the second quarter.

Currently, the Zacks Consensus Estimate for second-quarter revenues is pegged at $5.75 billion, indicating a 2% dip from the figure reported in the year-ago quarter.

Although Duke Energy has been undertaking notable cost mitigation initiatives since February 2020, its management fears that the impacts of the unprecedented coronavirus pandemic might push up its quarterly expenses. In particular, the company forecasts a potential increase in its bad debt expense, which, in turn, might have hurt its bottom line performance. Moreover, late fees from its customers might also have hampered its earnings in the second quarter.

The Zacks Consensus Estimate for earnings is pegged at $1.04 per share, suggesting 7.1% decline from the year-earlier quarter’s reported figure.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Duke Energy this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.

Earnings ESP: Duke Energy has an Earnings ESP of -0.10%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Utility Releases

FirstEnergy Corporation (FE - Free Report) delivered second-quarter 2020 operating earnings of 57 cents per share, which beat the Zacks Consensus Estimate of 55 cents by 3.64%.

NextEra Energy, Inc. (NEE - Free Report) reported second-quarter 2020 adjusted earnings of $2.61 per share, surpassing the Zacks Consensus Estimate of $2.50 by 4.4%.

CMS Energy Corporation (CMS - Free Report) reported second-quarter 2020 adjusted earnings per share of 49 cents, which surpassed the Zacks Consensus Estimate of 45 cents by 8.9%.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.

Click here for the 6 trades >>