Duke Energy Lags Earnings Estimates, Provides Guidance - Analyst Blog

Duke Energy Corporation ( DUK ) reported adjusted fourth-quarter 2014 earnings of 86 cents per share that came in below the Zacks Consensus Estimate of 88 cents by 2.3%. Quarterly earnings also decreased 14% from the year-ago figure of $1.00 per share.

Duke Energy Corporation - Earnings Surprise | FindTheBest

In 2014, earnings were $4.55 per share, also missing the Zacks Consensus Estimate of $4.57 by 0.4%.

Stronger performance at Commercial Power was more than offset by a weak International Energy business. Higher operating expenses also aggravated the shortfall.

Operational Update

In 2014, total revenue of $23.9 billion lagged the Zacks Consensus Estimate of $25.3 billion by 5.6%. Revenues in 2014 were, however, up 5.1% year over year. The regulated electric unit's revenues were $21.6 billion (up 6%) representing approximately 90% of the company's total revenue. Its non-regulated electric, natural gas, and other segment generated $1.8 billion in revenue, down 5.9% year over year. Revenues from its regulated natural gas business were $573 million, up 12.1% from the year-ago level.

The company's total operating expenses were $18.7 billion in 2014, up 4.5% from the year-ago period. Costs escalated primarily because of higher regulated input costs (8.1% year over year), natural gas costs (10.7%), operation & maintenance costs (3.2%) and depreciation and amortization expenses (14.9%), but were partially offset by lower non-regulated input costs (1.3%).

Operating income in 2014 climbed 8.3% year over year to $5.3 billion.

Quarterly Segmental Highlights

Regulated Utilities: Adjusted income in the quarter was $551 million, down 9.2% from $607 million a year ago. Higher operations and maintenance expenses primarily resulted in the year-over-year decline.

International Energy: Segment income stood at $72 million, down 33.3% from the year-ago level. The decline was due to unfavorable results in Latin America, particularly lower volumes and higher purchased power costs in Brazil.

Commercial Power: The segment recorded operating income of $32 million in the quarter compared with $3.0 million in the year-ago period. Improved results reflect higher earnings from the Midwest coal and gas generation fleets.

Other: The segment includes corporate interest expenses not allocated to the other business units, results from Duke Energy's captive insurance company and income tax levelization adjustments.

Net expenses were $45 million, up from $5.0 million in the year-ago quarter.

Financial Update

As of Dec 31, 2014, the company had cash & cash equivalents of $2.04 billion, up from $1.5 billion as of Dec 31, 2013. Long-term debt declined to $37.2 billion (excluding current maturities) from $38.2 billion as of Dec 31, 2013.

Net cash from operating activities in 2014 was $6.6 billion as compared to $6.4 billion in 2013. The company made capital expenditure of $5.5 billion in 2014 as compared to $5.6 billion in 2013.


The company offered 2015 adjusted earnings guidance in the range of $4.55 to $4.75 per share with long-term earnings growth of 4% to 6% expected through 2017.

At the Peers

CMS Energy Corp. ( CMS ) reported fourth-quarter 2014 earnings per share of 35 cents on an adjusted basis. Quarterly earnings lagged the Zacks Consensus Estimate by a penny.

PG&E Corp.'s ( PCG ) adjusted operating earnings per share of 53 cents in the fourth quarter of 2014 missed the Zacks Consensus Estimate of 54 cents by a penny.

American Electric Power Company Inc. ( AEP ) reported fourth-quarter 2014 operating earnings of 48 cents per share, missing the Zacks Consensus Estimate of 52 cents by 7.7%.

Zacks Rank

Duke Energy presently holds a Zacks Rank #3 (Hold).

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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.

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

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