Duke Energy (DUK) Q4 Earnings Beat, Revenues Decline Y/Y

Duke Energy Corporation DUK reported fourth-quarter 2020 adjusted earnings of $1.03 per share, which surpassed the Zacks Consensus Estimate of $1.02 by 1%. The bottom line also improved 13.2% year over year, driven by increased investments in electric and gas utilities and new renewable projects placed in service.

Including one-time adjustments, the company reported GAAP losses of 12 cents per share against the year-ago quarter’s GAAP earnings of 88 cents.

For 2020, the company recorded adjusted earnings of $5.12 per share, which surpassed the Zacks Consensus Estimate of $5.10 by 0.4%. The bottom line also improved 1.2% from the prior year.

Total Revenues

Total operating revenues came in at $5,777 million, which dropped 5.3% from $6,103 million a year ago. The reported figure also missed the Zacks Consensus Estimate of $6,222 million by 7.1%.

In 2020, the company recorded revenues of $23.87 billion, down 4.8% from $25.08 billion a year ago. The full-year figure missed the Zacks Consensus Estimate of $24.31 million by 1.8%.

The Regulated electric unit’s revenues were $5,059 million (down 6.2% year over year), representing 87.6% of total revenues in the quarter.

Revenues from the regulated natural gas business totaled $527 million, down 0.2% year over year.

The Non-regulated Electric and Other segment generated revenues of $191 million, which improved 4.4% year over year.

Operational Update

Duke Energy’s total operating expenses amounted to $5,703 million in the reported quarter, up 14.3% year over year. The escalation was on account of higher impairment charges, increased depreciation and amortization, and escalated property and other taxes.

Operating income plunged 93.3% to $74 million from $1,109 million in the year-ago quarter.

Interest expenses fell to $535 million from $547 million in fourth-quarter 2019.

Segmental Highlights

Electric Utilities & Infrastructure: Adjusted income in the fourth quarter totaled $675 million, which was higher than $584 million reported in the year-ago quarter.

Gas Utilities & Infrastructure: Adjusted income in this segment totaled $150 million, down from $159 million a year ago.

Commercial Renewables: This segment witnessed an adjusted income of $79 million in the quarter under review compared with $59 million in the year-ago quarter.

Other: The segment includes corporate interest expenses not allocated to other business units, resulting from Duke Energy’s captive insurance company and other investments.

This segment incurred an adjusted loss of $127 million compared with a loss of $124 million in the year-ago quarter.

Duke Energy Corporation Price, Consensus and EPS Surprise

Duke Energy Corporation Price, Consensus and EPS Surprise

Duke Energy Corporation price-consensus-eps-surprise-chart | Duke Energy Corporation Quote

Financial Condition

As of Dec 31, 2020, Duke Energy had cash & cash equivalents of $259 million, down from $311 million as of Dec 31, 2019. Long-term debt was $55.63 billion at the end of 2020 compared with $54.99 billion at 2019-end.

In 2020, the company generated net cash from operating activities of $8.86 billion compared with $8.21 billion in 2019.

Guidance

Duke Energy issued its 2021 adjusted EPS guidance. It expects adjusted earnings per share of $5.00-$5.30. The Zacks Consensus Estimate for 2021 earnings is pegged at $5.22 per share, above the midpoint of the company’s projected range.

Zacks Rank

Duke Energy currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Utility Releases

Xcel Energy Inc. XEL posted fourth-quarter 2020 operating earnings of 54 cents per share, in line with the Zacks Consensus Estimate.

NextEra Energy, Inc. NEE reported fourth-quarter 2020 adjusted earnings of 40 cents per share, which beat the Zacks Consensus Estimate of 39 cents by 2.6%.

CMS Energy Corporation CMS reported fourth-quarter 2020 adjusted earnings per share of 56 cents, which surpassed the Zacks Consensus Estimate of 55 cents by 1.8%.

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