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Duke Energy (DUK) Q2 Earnings Beat, Revenues Decline Y/Y

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Duke Energy Corporation (DUK - Free Report) reported second-quarter 2020 adjusted earnings of $1.08 per share, which surpassed the Zacks Consensus Estimate of $1.04 by 3.9%.

Including one-time adjustments, the company incurred GAAP loss of $1.13 per share,which deteriorated from the year-ago quarter’s earnings figure of $1.12.

The second-quarter results were impacted by mild weather, lower volumes from commercial and industrial customers, courtesy of the COVID-19 pandemic, along with higher depreciation on a growing asset base. Also, costs related to the abandonment of the ACP investment had an unfavorable impact.

Total Revenues

Total operating revenues came in at $5,421 million, which declined 7.7% from $5,873 million a year ago. The reported figure also missed the Zacks Consensus Estimate of $5,753 million by 5.8%.

Duke Energy Corporation Price, Consensus and EPS Surprise

Duke Energy Corporation Price, Consensus and EPS Surprise

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

The Regulated electric unit’s revenues were $4,963 million (down 8.5% year over year), representing 92% of total revenues in the quarter.

Revenues from the regulated natural gas business totaled $263 million, down 6.1% year over year.

The Non-regulated electric and Other segment generated revenues of $195 million, which improved 14.7% year over year.

Operational Update

Duke Energy’s total operating expenses amounted to $4,251 million in the reported quarter, down 7.1% year over year. The decline was on account of lower natural gas costs as well as reduced operation, maintenance and other expenses. Also, lower expenses related to fuel used in electric generation contributed to reduced operating expenses.

Operating income declined 9.3% to $1,177 million from $1,298 million in the year-ago quarter.

Interest expenses rose to $554 million from $542 million in the year-ago quarter.

Segmental Highlights

Electric Utilities & Infrastructure: Adjusted income in the second quarter totaled $753 million, which was lower than $809 million in the year-ago quarter.  

Gas Utilities & Infrastructure: Adjusted income at this segment totaled $50 million, up from $40 million a year ago.

Commercial Renewables: This segment recorded an adjusted income of $90 million in the quarter under review compared with $86 million in the year-ago quarter.

Other: The segment includes corporate interest expenses not allocated to other business units, results from Duke Energy’s captive insurance company and other investments.

This segment incurred an adjusted loss of $84 million compared with a loss of $115 million in the year-ago quarter.

Financial Condition

As of Jun 30, 2020, Duke Energy had cash & cash equivalents of $341 million, up from $311 million as of Dec 31, 2019. Long-term debt was $56.14 billion at the end of second-quarter 2020 compared with $54.99 billion at 2019-end.

At the end of second quarter, the company had net cash from operating activities of $3,357 million compared with $3,056 million in the year-ago period.

Guidance

Duke Energy reiterated its 2020 adjusted EPS guidance. It continues to expect adjusted earnings per share in the range of $5.05-$5.45. The Zacks Consensus Estimate for 2020 earnings is in line with the lower end of the company’s projected range.

Zacks Rank

Duke Energy currently carries a Zacks Rank #4 (Sell).

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

Other Utility Releases

Xcel Energy Inc. (XEL - Free Report) posted second-quarter 2020 operating earnings of 54 cents per share, which surpassed the Zacks Consensus Estimate of 46 cents by 17.4%.

FirstEnergy Corporation (FE - Free Report) reported second-quarter 2020 operating earnings of 57 cents per share, which beat the Zacks Consensus Estimate of 55 cents by 3.6%.

DTE Energy Company (DTE - Free Report) reported second-quarter 2020 operating earnings per share of $1.53, which beat the Zacks Consensus Estimate of $1.31 by 16.8%.

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