Duke Energy (DUK) Q3 profit jumps 23%, beats estimates

Duke Energy Corp. (NYSE: DUK) reported a 23% jump in earnings for the third quarter of 2019 driven by growth from investments at electric and gas utilities, favorable weather, and lower O&M expenses. The bottom line exceeded analysts’ expectations while the top line missed consensus estimates.

Net income climbed by 23% to $1.33 billion or $1.82 per share. Adjusted earnings grew by 9% to $1.79 per share. Operating revenues increased by 5% to $6.94 billion.

Looking ahead into the full year 2019, the company narrowed its adjusted earnings guidance to the range of $4.95 to $5.15 per share from the previous estimate of $4.80 to $5.20 per share. Duke Energy reaffirmed its long-term earnings growth target of 4% to 6% through 2023 of the midpoint of its original 2019 outlook range of $5.

For the third quarter, the segment income from Electric Utilities and Infrastructure grew by 16% backed by contributions from base rate changes and higher rider revenues, favorable weather, and lower O&M expenses. This was partially offset by higher depreciation and amortization on a growing asset base and lower volumes.

The segment income from Gas Utilities and Infrastructure climbed by 53% driven primarily by higher earnings from midstream investments. The favorable wind resource and growth from new projects drove the segment income from Commercial Renewables higher.

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However, the higher financing costs related to funding various investments and timing of income tax expense hurt the segment income from Others, which showed wider losses for the quarter.

The company expects to issue about $2.5 billion of equity to maintain its strong credit metrics during ACP construction. Duke Energy expects common stock issuances of $500 million per year through 2022 via DRIP/ATM programs to support a $37 billion growth capital plan.

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