Duke Energy beats profit estimates on higher margins

Nov 2, 2023

By Nicole Jao

NEW YORK (Reuters) -Duke Energy Corp on Thursday beat Wall Street estimates for third-quarter profit, with the company pointing to higher retail margins and so-called rider charges which are added to utility bills to recoup some costs.

“We experienced earnings growth from rate cases and riders, favorable weather and lower O&M (operations and maintenance) from our cost mitigation initiatives,” CFO Brian Savoy told analysts on Thursday. These factors aided its electric utilities business but were offset by lower weather-normalized volumes, higher storm costs and higher interest expense, he said.

Retail margin and rider charges, which are added to utility bills to recover the costs of specific programs, rose to $0.11 per share during the quarter from -$0.02 a year ago.

Duke’s electric utilities, which serve 8.2 million customers in North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky, reported adjusted income of $1,447 million, down 6% from the same quarter in 2022.

Its gas utilities, which serve 1.6 million customers in North Carolina, South Carolina, Tennessee, Ohio and Kentucky, reported income of $15 million for the quarter.

“We expect our capital plan to increase as we move further into energy transition,” Savoy said.

The energy company plans to spend $65 billion over the next five years with most of it going into its transition to low-carbon energy sources.

As part of its energy transition strategy, the company filed a resource plan in North Carolina and South Carolina, which includes adding 6,000 megawatts(MW) of new solar in-service and 2,700 MW of battery storage in-service by 2031.

On an adjusted basis, Duke reported earnings per share of $1.94 in the quarter ended Sept. 30, above analysts’ estimates of $1.92 per share, LSEG data showed.

However, the Charlotte, North Carolina-based company missed revenue estimates, reporting $7.994 billion in the quarter versus expectations of $8.131 billion.

Duke narrowed its adjusted 2023 earnings per share forecast to $5.55 to $5.65 and reaffirmed its long-term adjusted EPS growth rate of 5 to 7% through 2027.

Shares of Duke Energy were up 0.6% at 11:11 a.m. ET on Thursday.

(Reporting by Nicole Jao; Editing by Kirsten Donovan and Jonathan Oatis)


[featured sponsor]

[sponsored headlines]