Duke Energy (DUK) released better-than-expected results. The company kept its commitment of delivering strong results for the third consecutive quarter. Duke Energy largely benefited due to a higher temperature, which led the customers to use more air conditioning, raising electricity consumption. Management is anticipating improvement in the demand for electricity in the future. It has also posted an upbeat guidance, and is expected to see growth in the EPS.
The company is gaining momentum
In the recently reported quarter, Duke Energy posted a good 80% growth in the profit on higher revenue. The company is pleased with the rise in the temperature, which is leading customers to use more electricity. This can be noted by a good 7% increase in revenue from its regulated electric utilities.
Duke Energy is pleased with the growth momentum that it is seeing. The weather is changing, and the higher temperature is increasing the electricity usage, which is a positive sign for Duke Energy. The company is pleased with the momentum that it is seeing in its growth strategy. It is making efforts to maximize its value from its commercial portfolio and is making efforts around coal ash management for the same purpose.
Duke Energy has aggressive investment strategies. The company is targeting to invest about $16 billion to $20 billion in its growth initiatives such as infrastructure projects, new generation and regulatory compliance initiatives. Duke Energy is seeing significant progress in its initiatives, which are advancing its portfolio of new generation projects.
Constructing new capacity
Moving on, Duke Energy has plans for the construction of its three major construction projects in Florida. The company is investing around $1.9 billion in these projects. Duke Energy is expecting these projects to yield good results by the end of 2018, which will strengthen Duke Energy's long-term prospects. Similarly, in the South Carolina project, Duke Energy is investing $600 million and the project is expected to be operational by 2017, which will be an early start of benefits to Duke Energy with these potential projects.
Duke Energy is pleased by the strong response it is receiving with its solar RSP project in North Carolina. In addition, the company is engaged in negotiations for power purchase agreements and ownership options for approx 300 MW of regulated solar generation. Moreover, Duke Energy is planning to enter a 30-year full requirement wholesale contract to supply power to NCEMPA, which will provide benefit to both the customers of Duke Energy Progress and members of NCEMPA.
Solicitation for a major new natural gas pipeline into North Carolina by Duke Energy and Piedmont Natural Gas is a good move by the company while, on the other hand, Carolina's utilities are expected to enter into a gas transportation contract with the pipeline.
There are various moves that Duke is undertaking to enhance shareholders' wealth. The company is expecting to see improvement in earnings by 2016. Besides these, there are many strategies aimed at international expansion while there are some tax effective moves that Duke Energy is undertaking.
It is making aggressive moves toward coal ash management. It is also bifurcating the short- and long-term plans for the coal ash basins. Duke Energy is committed to developing a scientifically engineered solution for each site that will protect the environment and allow the company to continue providing safe, reliable, and cost effective electricity for its customers.
Conclusion
Moving on to the valuation, with a trailing P/E of 22.9, Duke Energy is reasonable and has room for earnings growth, which is furthe
No comments:
Post a Comment