Duke Energy Corporation DUK an electric and natural gas utility based in Charlotte, NC, is set to report third-quarter 2017 results on Nov 3, before the opening bell.
Last quarter, the company posted a negative earnings surprise of 0.98%. However, the company surpassed the Zacks Consensus Estimate in one of the past four quarters, with an average earnings beat of 1.21%.
Let’s see how things are shaping up prior to this announcement.
Factors at Play
At the onset of the third quarter, Duke Energy announced a 4.1% hike in its quarterly cash dividend on common stock to 89 cents per share. The dividend payment was scheduled for Sep 18, 2017, to stockholders on record as of Aug 18, 2017.This indicates that the company has been generating robust cash flow from various operations and the soon-to-be-reported quarter is poised to reflect that.
On the flip side, Hurricane Irma led to catastrophic losses in Florida last month. The storm damaged the grid system of electricity providers like Duke Energy, which has extensive service territories in the region. This in turn led to disruption in distribution network and widespread outages.
Duke Energy reported that its electrical system suffered significant damages in Hardee and Highlands County. The company took several initiatives to address these issues and initiated repair work which included rebuilding this system.
Moreover, Duke Energy in September waived off late payment charges and estimated bills for 1.8 million Florida customers to restore power in the state.
These must have increased the third-quarter expenses of Duke Energy, which we believe will weigh down on its bottom line.
For the to-be-reported quarter, the Zacks Consensus Estimate for earnings reflects a decline of 7.8% year over year, whereas sales are anticipated to drop 1.1% to $6.75 billion.
Earnings Whisper
Our proven model does not show that Duke Energy will beat earnings this quarter. Notably, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Duke Energy lacks these attributes, as mentioned below:
Zacks ESP: Duke Energy has an Earnings ESP of -0.91%. This is because the Most Accurate estimate is $1.53, lower than the Zacks Consensus Estimate of $1.55. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Duke Energy currently carries a Zacks Rank #4 (Sell).
Note that we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Duke Energy Corporation Price and EPS Surprise
Duke Energy Corporation Price and EPS Surprise | Duke Energy Corporation Quote
Stocks That Warrant a Look
Here are a few utility stocks which have the right combination of elements to post an earnings beat this quarter:
NRG Energy, Inc. NRG will report next quarterly results on Nov 2. The company has an Earnings ESP of +7.92% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Exelon Corporation EXC has an Earnings ESP of +0.48% and a Zacks Rank #3. The company is scheduled to report next quarterly results on Nov 2.
Chesapeake Utilities Corporation CPK has an Earnings ESP of +1.45% and a Zacks Rank #3. The company is slated to release next quarterly results on Nov 9.
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