Duke Energy (DUK) to Report Q1 Earnings: Is a Beat in Store?

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Duke Energy Corporation DUK is set to report first-quarter 2018 results on May 10, before the opening bell.

In the last reported quarter, the company delivered a positive earnings surprise of 3.30%. Also, it surpassed the Zacks Consensus Estimate in two of the past four quarters, the average beat being 0.59%.

Let's see how things are shaping up prior to this announcement.

Why a Likely Positive Surprise?

Our proven model shows that Duke Energy is likely to beat estimates this quarter. That is because it has the right combination of two key ingredients - a positive  Earnings ESP  and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) - for this to happen.

Zacks ESP:  Duke Energy has an Earnings ESP of +1.66%. You can uncover the best stocks to buy or sell before they're reported with our  Earnings ESP Filter .

Zacks Rank:  The company carries a Zacks Rank #3, which along with a positive Earnings ESP indicates a positive surprise prediction.

Please note that we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) while going into an earnings announcement.

Duke Energy Corporation Price and EPS Surprise

Duke Energy Corporation Price and EPS Surprise | Duke Energy Corporation Quote

Factors at Play

During the fourth-quarter 2017 earnings call, Duke Energy announced that the latest U.S. tax reform has lowered the tax rate, resulting in reduced deferred taxes, which in turn will increase the utility's rate base. Accordingly, management anticipates this higher rate base growth, to result in a substantial bottom-line improvement for the company.

We expect the favorable impacts of the tax reform to boost the company's earnings starting from the first quarter of 2018. In line with this, the Zacks Consensus Estimate for Duke Energy's first-quarter earnings pegged at $1.15, reflects an annual improvement of 10.6%.

In the first quarter, Duke Energy announced its decision to contribute savings from lower tax rate to its North Carolina customers in the form of lower bills in the near term. In this context, we expect to see customer growth in the upcoming quarterly results, since lower bills attract more customers.

Meanwhile, both Duke Energy Carolinas and Duke Energy Indiana customers have set a new all-time record for energy use in January 2018, prompted by the freezing temperatures prevalent during this year's winter. This development is further likely to bolster the company's overall revenues in the yet-to-be-reported quarter's results.

Evidently, the Zacks Consensus Estimate for Duke Energy's first-quarter revenues are anticipated to rise 0.2% to $5.74 billion.

Other Stocks to Consider

Here are some other Utilities you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat this quarter:

Pattern Energy Group Inc. PEGI has an Earnings ESP of +51.52% and a Zacks Rank #3. It is slated to report first-quarter 2018 results on May 10. You can see  the complete list of today's Zacks #1 Rank stocks here .

Just Energy Group, Inc. JE has an Earnings ESP of +23.08% and a Zacks Rank of 3. It is expected to report first-quarter results on May 16.

Atlanta Yield PLC AY has an Earnings ESP of +2,100.00% and a Zacks Rank #3. It is slated to release first-quarter results on May 21.

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Duke Energy Corporation (DUK): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Earnings , Stocks
Referenced Symbols: DUK , PEGI , JE , AY

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