Duke Energy Corp (NYSE:DUK) investors seem cool this morning after the utility said warmer weather during this past winter and early spring softened energy demand and pushed earnings lower. Despite the lousy news, DUK stock is holding its own Tuesday morning.
Duke Energy said first-quarter 2017 earnings declined to $726 million, or $1.02 per share, down from $777 million, or $1.13 per share, in last year’s first quarter. On an adjusted basis, however, DUK earned $1.04 per share — a penny more than analyst expectations.
Duke, the biggest U.S. power company by generation capacity, said revenue fell 2.8% to $4.95 billion, down from $5.09 billion last year. This widely missed estimates of $5.76 billion.
In addition to the warmer weather, adjusted diluted EPS for the first quarter of 2017 was lower than the prior year, primarily due to the absence of International Energy, which was sold in December, the company said. That was partially offset by contributions from Piedmont Natural Gas and favorable operations and maintenance expenses. Based upon the results through the first quarter, management said DUK remains on track to achieve its 2017 adjusted diluted earnings guidance range of $4.50 to $4.70 per share.
“Our ongoing investments drove solid growth in our electric and gas utilities in the quarter, and we are responding to warm winter weather through disciplined cost management and operational efficiency. We remain on-track for 2017 and have affirmed our full-year guidance range,” said Lynn Good, Duke Energy chairman, president and CEO.
The utility sector has remained strong of late
, as it appears that traders and investors are looking for interest rate alternatives to bonds in the upcoming rising rate environment. Duke’s 85.5-cent quarterly dividend offers an annualized yield of slightly more than 4% at recent share price levels.
DUK stock is up more than 5% in the last three months, outperforming both the S&P 500 and Dow Jones Industrial Average.
