Duke Energy Misses Expectations As Storms Hit Earnings

Wedoany.com Report-Nov 13, Power and gas utility Duke Energy Corp. has reported $1.24 billion in adjusted net income for the third quarter, down from $1.49 billion for the same three-month period last year partly due to hurricane costs that it expects will continue into the fourth quarter.

Duke Energy’s adjusted earnings per share of $1.62 missed the Zacks Consensus Estimate, which averages projections by brokerage analysts, by 6.4 percent. Before adjustments, earnings per share stood at $1.6, up from $1.59 for the third quarter of 2023.

“Lower third-quarter 2024 adjusted results were driven by a higher effective tax rate, storm costs, interest expense and depreciation on a growing asset base”, the Charlotte, North Carolina-based company said in its quarterly report. “These items were partially offset by growth from rate increases and riders”.

Duke Energy expects to spend between $2.4 billion and $2.9 billion restoring damages caused by hurricanes Helene, Debby and Milton, mainly sustained by its units serving the Carolinas and Florida. “Total storm restorations costs will be recognized in the third and fourth quarter 2024”, it said in the online statement.

Duke Energy Carolinas, Duke Energy Florida and Duke Energy Progress have entered into term-loan facilities totaling $1.75 billion, with an option for a further $850 million, Duke Energy said.

Chair and chief executive Lynn Good said, "Our team’s commitment to our customers was unwavering as they worked around the clock to restore 5.5 million outages as quickly and safely as possible and rebuilt large portions of our system in a matter of days”.

Duke Energy’s power segment generated an income of $1.45 billion, slightly up year-on-year due to the “net impact of charges related to certain system post-implementation costs”, though adjustments render a lower figure for the third quarter of 2024.

Meanwhile Duke Energy’s gas segment logged a loss of $25 million, primarily driven by depreciation and interests.

Operating revenues totaled $8.15 billion, up from $7.99 billion for the third quarter last year. Regulated power contributed $7.78 billion while regulated gas accounted for $298 million. Operating income landed at $2.14 billion, up from $2.11 billion.

Duke Energy ended the quarter with $12.14 billion in current assets including $376 million in cash and cash equivalents. Its current liabilities stood at $17.43 billion.

It maintained its full-year EPS guidance of $5.58 to $6.1. “The company is reaffirming its long-term adjusted EPS growth rate of 5 percent to 7 percent through 2028 off the 2024 midpoint of $5.98”, Duke Energy added.