Duke Energy Corporation (DUK - Free Report) reported second-quarter 2018 adjusted earnings of 93 cents per share, missing the Zacks Consensus Estimate of $1.03 by 9.7%. Quarterly earnings also declined 7.9% year over year, primarily due to a lower tax shield on holding company interest as a result of the Tax Cuts and Jobs Act of 2017 (Tax Act), higher depreciation from a growing asset base, and higher operation and maintenance expenses (O&M) including storm costs.
Barring one-time adjustments, the company reported GAAP earnings of 71 cents in the reported quarter compared to 98 cents in the prior-year quarter.
In the reported quarter, the company’s total operating revenues were $5,643 million, up 1.6% from $5,555 million a year ago. The reported figure also surpassed the Zacks Consensus Estimate of $5,590 million by 1%.
The regulated electric unit’s revenues were $5,178 million (up 1.2%), representing approximately 91.8% of the company’s quarterly total revenues. Revenues from the regulated natural gas business were $291 million (up 5.8%). Moreover, its non-regulated and other segment generated revenues of $174 million, up 7.4% year over year.
The company’s total operating expenses were $4,667 million in the quarter, up from $4,209 million a year ago. Costs flared up due to excessive fuel used in electricity generation and purchased power, cost of natural gas, operation, maintenance and other expenses, depreciation and amortization expenses, property impairment charges, as well as other taxes.
Consequently, operating income in the quarter decreased to $979 million from $1,353 million a year ago.
Interest expenses rose to $518 million from $486 million a year ago.
Duke Energy Corporation Price, Consensus and EPS Surprise