Market Overview

Is Duke Energy Betting on the Future? Earnings Analysis

Related DUK
Total Potential Return For Duke Energy Not Exciting Enough For These Analysts
Argus Sees 'Unexciting' Return Potential For Duke Energy
Enphase Energy - Power To The People! (Seeking Alpha)

Duke Energy Corp. (NYSE: DUK) discussed its Q2 2013 earnings yesterday. Based on the  preliminary financial results for the quarter ended 2013-06-30, we analyzed the company against its peers. (Scroll to the bottom for the peer list).

Does Duke's recent performance suggest that its historical competitive advantage is slipping away? Find out with this Free Fundamental Analysis Report!

Download Now!

The table below shows the preliminary results along with the recent trend for revenues, net income and returns.

Quarterly (USD million) 2013-06-30 2013-03-31 2012-12-31 2012-09-30 2012-06-30
Revenues 5,879.0 5,974.0 5,666.0 6,772.0 3,577.0
Revenue Growth % (1.6) 5.4 (16.3) 89.3 (0.5)
Net Income 342.0 634.0 404.0 590.0 445.0
Net Income Growth % (46.1) 56.9 (31.5) 32.6 51.9
Net Margin % 5.8 10.6 7.1 8.7 12.4
ROE % (Annualized) 3.4 6.2 4.0 7.5 7.9
ROA % (Annualized) 1.2 2.2 1.4 2.7 2.9

Turnaround Likely?

Duke Energy Corp. trades at a lower Price/Book multiple (1.2) than its peer median (1.6). The market expects Duke to grow faster than the median of its chosen peers (PE of 25.0 compared to peer median of 18.4) and to improve its current ROE of 6.3% which is below its peer median of 9.9%. Thus, the market seems to expect a turnaround in the company's current performance.

Duke's asset efficiency (asset turns of 0.3x) and net profit margins of 8.1% are both median for its peer group. The company's net margin is its lowest relative to the last five years and compares to a high of 11.7% in 2011.

Heavily Betting on the Future?

Duke Energy Corp. has grown its revenues faster than its peers (15.5% vs. 2.1% respectively for the past three years). The market also sees relatively higher long-term growth prospects for the company, giving it a better than peer median PE ratio of 25.0. Overall, we classify the company's growth prospects as superior relative to its peers.

Duke's annualized rate of change in capital of 28.1% over the past three years is greater than the peer median of 5.8%. This relatively high investment has generated a less than peer median return on capital of 3.4% averaged over the same three years. The relatively high investment and low current returns lead us to believe that the company is betting heavily on the future.

Trend Charts for Duke Energy Corp. (NYSE: DUK)

Quarterly Revenues Trend for Duke Energy Corp. (NYSE: <a class=DUK)" class="aligncenter size-full wp-image-7091" data-mce-src="" height="288" src="" title="Revenues-Trend--USD-million--Quarterly-DukeEnergy_DUK" width="348" />Annual Revenues Trend for Duke Energy Corp. (NYSE: <a class=DUK)" class="aligncenter size-full wp-image-7092" data-mce-src="" height="288" src="" title="Revenues-Trend--USD-million--Annual-or-TTM-DukeEnergy_DUK" width="348" />Quarterly Net Margin Trend for Duke Energy Corp. (NYSE: <a class=DUK)" class="aligncenter size-full wp-image-7093" data-mce-src="" height="288" src="" title="Net-Margin-Trend-----Quarterly-DukeEnergy_DUK" width="348" />Annual Net Margin Trend for Duke Energy Corp. (NYSE: <a class=DUK)" class="aligncenter size-full wp-image-7094" data-mce-src="" height="288" src="" title="Net-Margin-Trend-----Annual-or-TTM-DukeEnergy_DUK" width="348" />

Duke Energy Peers

Southern Co. (NYSE: SO), American Electric Power Co. Inc. (NYSE: AEP), PPL Corp. (NYSE: PPL), FirstEnergy Corp. (NYSE: FE), Xcel Energy Inc. (NYSE: XEL), SCANA Corp. (NYSE: SCG), TECO Energy Inc. (NYSE: TE), PG&E Corp. (NYSE: PCG) and Integrys Energy Group Inc. (NYSE: TEG).

Duke Energy: Free Fundamental Analysis Report!

Get it Now!

Company Profile

Duke Energy Corp. is focused on electric power and gas distribution operations, and other energy services in the Americas, including a portfolio of renewable energy assets. The company operates its business through the following segments: U.S. Franchised Electric and Gas, Commercial Power and International Energy. The company's business roots back to 1927. Duke Energy was founded on April 3, 2006 and is headquartered in Charlotte, NC.

This article was first published on the CapitalCubeBlog, Full Disclaimer.

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Markets Trading Ideas


Related Articles (AEP + DUK)

View Comments and Join the Discussion!