Duke Energy Misses Earnings Forecast as Higher Interest Rates Bite
Duke Energy Misses Earnings Forecast as Higher Interest Rates Bite | OilPrice.com
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U.S. utility giant Duke Energy ( NYSE: DUK) reported on Thursday underwhelming fourth-quarter earnings below analyst expectations as rising interest rates raised costs for utilities.
Duke Energy booked adjusted earnings per share (EPS) of $1.51 for the fourth quarter, compared to $1.11 for the fourth quarter of 2022. Higher adjusted results for the quarter compared to last year were driven by lower O&M expense, favorable rate case impacts along with growth from riders and other retail margin, and lower tax expense and franchise tax benefits, partially offset by higher interest expense and depreciation on a growing asset base, the company said.
Despite the higher Q4 EPS, the earnings missed the average analyst forecast of $1.54 per share, according to data from LSEG.
Interest expense in the Electric Utilities and Infrastructure division rose to $486 million for the fourth quarter 2023, up from $421 million for the same period of 2022.
North Carolina-based Duke Energy – which serves 8.2 million electric utility customers in North Carolina, South Carolina, Florida, Indiana, Ohio, and Kentucky – said that its full-year EPS were adversely affected by higher interest expense, among other factors such as depreciation on a growing asset base along with unfavorable weather and electric volumes.
The company is raising its five-year capital expenditure plan by $8 billion—to $73 billion from $65 billion previously as it looks to incorporate more renewable energy in its resource base.
“Today we announced strong fourth-quarter results, concluding a year of resilience and agility as we overcame external challenges,” said Lynn Good, Duke Energy chair, president and chief executive officer.
“We enter 2024 with a clear vision, significant momentum and an increased $73 billion, five-year capital plan that will support our energy transition and the unprecedented growth of our jurisdictions,” Good said.
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“The strength of our regulated utilities and our increasing capital profile give us confidence in our ability to deliver sustainable value and earnings growth of 5% to 7% through 2028.”
By Charles Kennedy for Oilprice.com
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