Duke Weathers Q1 Earnings

By Chris Lange Published May 1, 8:40AM EDT

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Duke Energy Corp. (NYSE: DUK) reported its first-quarter financial results before the markets opened Friday. The utility giant had $1.24 in earnings per share (EPS) on $6.06 billion in total operating revenue. That compared to Thomson Reuters consensus estimates of $1.14 in EPS on $6.30 billion in revenue. In the same quarter of the previous year, it posted EPS of $1.17 and revenue of $6.62 billion.

These earnings were driven by cold winter weather and strong operational performance. At the same time, the Midwest Generation business, which was sold to Dynegy at the beginning of April, benefited from higher wholesale capacity prices and energy margins. These favorable drivers were partially offset by macro-economic headwinds at International Energy related to the ongoing drought in Brazil and lower MTBE prices at National Methanol.

The company reaffirmed its guidance for 2015 as EPS in the range of $4.55 to $4.75. The analysts’ consensus estimates are $4.67 in EPS on $25.44 billion in revenue.

On April 6, 2015, Duke received delivery of and retired approximately 16.6 million of its shares. That was roughly 85% of the total number of shares of Duke Energy common stock expected to be repurchased under a $1.5 billion accelerated stock repurchase program.

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In terms of its segments, compared to the first quarter of the previous year, Duke reported:

Regulated Utilities recognized first-quarter 2015 adjusted segment income of $774 million, compared to $737 million.
International Energy recognized first-quarter 2015 adjusted segment income of $36 million, compared to $130 million.
Commercial Power recognized first-quarter 2015 adjusted segment income of $95 million, compared to $10 million.

Lynn Good, president and CEO of Duke, said:

I am pleased with our operational and financial performance in the first quarter. Our customers needed a record amount of electricity during the exceptionally cold weather in February, and we were there. We were also quick to respond during numerous winter storms that caused significant outages.

We continue to make progress on our strategic initiatives, including closing the transaction to sell our Midwest Generation business to Dynegy and obtaining provisions to enable the NCEMPA purchase transaction in North Carolina.

Cash and cash equivalents for the first quarter were $2.82 billion, compared to $2.03 in the fourth quarter of 2014.

Shares of Duke closed Thursday down 1.1% at $77.57. Following the release of the financial results, shares were inactive in premarket trading. The stock has a consensus analyst price target of $82.25 and a 52-week trading range of $68.81 to $89.97.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.