It has been about a month since the last earnings report for Duke Energy (DUK - Free Report) . Shares have added about 0.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Duke Energy due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Duke Energy Q1 Earnings Top Estimates, Revenues Miss
Duke Energy Corporation reported first-quarter 2019 earnings of $1.24 per share, which surpassed the Zacks Consensus Estimate of $1.21 by 2.5%. The bottom line also improved 40.9% year over year, driven by revenues as well as operating income growth.
Total operating revenues came in at $6,163 million, up 0.5% from $6,135 million a year ago. The reported figure, however, missed the Zacks Consensus Estimate of $6,249 million by 1.4%.
The regulated electric unit’s revenues were $5,285 million (almost flat year over year), representing 85.8% of total revenues in the first quarter. Revenues from the regulated natural gas business totaled $728 million, up 4% year over year.
The Non-regulated and Other segment generated revenues of $150 million, which slipped 0.7% year over year.
Duke Energy’s total operating expenses amounted to $4,787 million in the reported quarter, up from $4,779 million in 2018’s first quarter. The uptick was on account of higher natural gas cost, escalated depreciation and amortization expenses as well as increased property and other taxes.
Operating income increased 9.3% to $1,373 million from $1,256 million a year ago.
Interest expenses rose to $543 million from $515 million in 2018’s first quarter.
Quarterly Segmental Highlights
Electric Utilities & Infrastructure: Net income in the first quarter totaled $750 million, which came in flat with the year-ago quarter’s figure.
Gas Utilities & Infrastructure: Net income at this segment summed $226 million, up from $116 million recorded a year ago.
Commercial Renewables: This segment reported net income of $13 million in the quarter under review compared with $20 million a year ago.
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 net loss of $89 million compared with that of $266 million in the year-ago quarter.
As of Mar 31, 2019, Duke Energy had cash & cash equivalents of $377 million, down from $442 million as on Dec 31, 2018. Long-term debt was $53.7 billion at the end of first quarter compared with $51.1 billion at 2018 end.
In the first quarter, the company generated net cash from operating activities of $1,239 million compared with $1,391 million in the prior year.
Duke Energy reaffirmed its earnings guidance for 2019. It still expects adjusted earnings per share of $4.80-$5.20. The Zacks Consensus Estimate for 2019 earnings is pegged at $4.94, below the mid point of the company’s projected range.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
Currently, Duke Energy has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Duke Energy has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.