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Duke Energy (DUK) Tops Q3 Earnings, Sales; Tweaks View (Revised)
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Duke Energy Corporation (DUK - Free Report) reported third-quarter 2016 adjusted earnings of $1.68 per share beat the Zacks Consensus Estimate of $1.56 by 7.7%. Quarterly earnings also improved 14.3% year over year owing to warm summer weather conditions the company’s service territories, higher retail volumes and rider revenues, and ongoing cost management efforts.
In the third quarter of 2016, the company’s total operating revenue was $6,821 million, up 5.2% from $6,483 million a year ago. The reported figure exceeded the Zacks Consensus Estimate of $6,677 million by 2.1%.
The regulated electric unit’s revenues were $6,303 million (up 4.8%), representing approximately 92.4% of the company’s quarterly total revenue. Revenues from the regulated natural gas business were $89 million, in line with the year-ago level. Its non-regulated electric and other segment generated revenues were $429 million, up 13.8% year over year.
The company’s total operating expenses were $4,344 million in the quarter, down from $4,356 million a year ago. Costs decreased on account of lower fuel expenses in both regulated (12.3% year over year) and non-regulated (30.5%) businesses, and lower cost of natural gas, which were partially offset by higher operation, maintenance and other expenses (up 0.6%) as well as depreciation and amortization expenses (up 2.9%).
Operating income during the quarter increased to $4,805 million from $4,799 million a year ago.
Interest expenses rose to $482 million from $402 million a year ago.
Quarterly Segmental Highlights
Regulated Utilities: Adjusted income in the quarter was $1,200 million, up from $965 million a year ago. The upside can be attributed to favorable weather, lower effective tax, higher rider revenues, increased weather-normal retail customer volumes and lower operating and maintenance expenses.
International Energy: Adjusted income of $64 million at this segment demonstrated a decline from $69 million in the year-ago quarter.
Commercial Portfolio: This segment reported adjusted income of $24 million in the quarter compared with $7 million a year ago. The rise was led by additional wind and solar plants placed in service and improved wind resources.
Other: The segment includes corporate interest expenses not allocated to other business units, results from Duke Energy’s captive insurance company, other investments, and income tax levelization adjustments.
Adjusted net expenses were $125 million, up from $30 million in the year-ago quarter.
Financial Condition
As of Sep 30, 2016, the company had cash & cash equivalents of $6,179 million, up from $857 million as of Dec 31, 2015. Long-term debt was $43.96 billion compared with $37.5 billion as of Dec 31, 2015.
In the first nine months of 2016, net cash from operating activities was $5,592 million compared with $5,396 million a year ago. The company’s capital expenditures totaled $1,921 million in the quarter, down from $2,979 million a year ago.
Guidance
The company expects to report its 2016 adjusted EPS towards the high end of its prior EPS guidance range of $4.50−$4.70.
DTE Energy Company (DTE - Free Report) reported third-quarter 2016 operating earnings per share of $1.96, beating the Zacks Consensus Estimate of $1.54 by 27.3%. Reported earnings were also up 40% from the year-ago figure of $1.40.
Entergy Corporation (ETR - Free Report) reported third-quarter 2016 operating earnings of $2.31 per share, beating the Zacks Consensus Estimate of $1.95 by 18.5%. The reported number also improved 21.6% from $1.90 reported a year ago.
CMS Energy Corporation (CMS - Free Report) reported third-quarter 2016 adjusted earnings per share of 70 cents, beating the Zacks Consensus Estimate of 60 cents by 16.7%. Quarterly earnings also increased 32.1% from the year-ago figure of 53 cents.
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(We have revised this article to correct a mistake. The previous version, published earlier today, should not be relied upon.)
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Duke Energy (DUK) Tops Q3 Earnings, Sales; Tweaks View (Revised)
Duke Energy Corporation (DUK - Free Report) reported third-quarter 2016 adjusted earnings of $1.68 per share beat the Zacks Consensus Estimate of $1.56 by 7.7%. Quarterly earnings also improved 14.3% year over year owing to warm summer weather conditions the company’s service territories, higher retail volumes and rider revenues, and ongoing cost management efforts.
Total Revenue
In the third quarter of 2016, the company’s total operating revenue was $6,821 million, up 5.2% from $6,483 million a year ago. The reported figure exceeded the Zacks Consensus Estimate of $6,677 million by 2.1%.
The regulated electric unit’s revenues were $6,303 million (up 4.8%), representing approximately 92.4% of the company’s quarterly total revenue. Revenues from the regulated natural gas business were $89 million, in line with the year-ago level. Its non-regulated electric and other segment generated revenues were $429 million, up 13.8% year over year.
DUKE ENERGY CP Price, Consensus and EPS Surprise
DUKE ENERGY CP Price, Consensus and EPS Surprise | DUKE ENERGY CP Quote
Operational Update
The company’s total operating expenses were $4,344 million in the quarter, down from $4,356 million a year ago. Costs decreased on account of lower fuel expenses in both regulated (12.3% year over year) and non-regulated (30.5%) businesses, and lower cost of natural gas, which were partially offset by higher operation, maintenance and other expenses (up 0.6%) as well as depreciation and amortization expenses (up 2.9%).
Operating income during the quarter increased to $4,805 million from $4,799 million a year ago.
Interest expenses rose to $482 million from $402 million a year ago.
Quarterly Segmental Highlights
Regulated Utilities: Adjusted income in the quarter was $1,200 million, up from $965 million a year ago. The upside can be attributed to favorable weather, lower effective tax, higher rider revenues, increased weather-normal retail customer volumes and lower operating and maintenance expenses.
International Energy: Adjusted income of $64 million at this segment demonstrated a decline from $69 million in the year-ago quarter.
Commercial Portfolio: This segment reported adjusted income of $24 million in the quarter compared with $7 million a year ago. The rise was led by additional wind and solar plants placed in service and improved wind resources.
Other: The segment includes corporate interest expenses not allocated to other business units, results from Duke Energy’s captive insurance company, other investments, and income tax levelization adjustments.
Adjusted net expenses were $125 million, up from $30 million in the year-ago quarter.
Financial Condition
As of Sep 30, 2016, the company had cash & cash equivalents of $6,179 million, up from $857 million as of Dec 31, 2015. Long-term debt was $43.96 billion compared with $37.5 billion as of Dec 31, 2015.
In the first nine months of 2016, net cash from operating activities was $5,592 million compared with $5,396 million a year ago. The company’s capital expenditures totaled $1,921 million in the quarter, down from $2,979 million a year ago.
Guidance
The company expects to report its 2016 adjusted EPS towards the high end of its prior EPS guidance range of $4.50−$4.70.
Zacks Rank
Duke Energy presently carries a Zacks Rank #3 (Hold).You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Peer Releases
DTE Energy Company (DTE - Free Report) reported third-quarter 2016 operating earnings per share of $1.96, beating the Zacks Consensus Estimate of $1.54 by 27.3%. Reported earnings were also up 40% from the year-ago figure of $1.40.
Entergy Corporation (ETR - Free Report) reported third-quarter 2016 operating earnings of $2.31 per share, beating the Zacks Consensus Estimate of $1.95 by 18.5%. The reported number also improved 21.6% from $1.90 reported a year ago.
CMS Energy Corporation (CMS - Free Report) reported third-quarter 2016 adjusted earnings per share of 70 cents, beating the Zacks Consensus Estimate of 60 cents by 16.7%. Quarterly earnings also increased 32.1% from the year-ago figure of 53 cents.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
(We have revised this article to correct a mistake. The previous version, published earlier today, should not be relied upon.)