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.
Guidance
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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Click to get this free report DUKE ENERGY CP (DUK): Free Stock Analysis Report AMER ELEC PWR (AEP): Free Stock Analysis Report CMS ENERGY (CMS): Free Stock Analysis Report PG&E CORP (PCG): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research