Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Duke Energy Corp (DUK, Financial) demonstrated strong storm response capabilities, restoring power to millions of customers quickly after three major hurricanes.
- The company reaffirmed its 2024 earnings guidance range, despite the impact of the hurricanes, showing resilience in its financial planning.
- Duke Energy Corp (DUK) received constructive regulatory approvals for its Integrated Resource Plans (IRPs) in both North and South Carolina, supporting future growth.
- The company is experiencing robust economic development, with significant new customer additions in the Carolinas and Florida, contributing to long-term load growth.
- Duke Energy Corp (DUK) is making strategic grid investments, which have already helped avoid significant customer outages during recent storms.
Negative Points
- The third-quarter adjusted earnings per share decreased to $1.62 from $1.94 the previous year, impacted by hurricane-related costs and lost revenues.
- The company is trending towards the lower half of its 2024 earnings guidance range due to storm impacts, including restoration costs and lost revenues.
- Duke Energy Corp (DUK) faces higher operational and maintenance expenses due to unplanned hurricane restoration efforts.
- The company anticipates a temporary credit impact in 2024 due to storm costs, although it expects recovery in 2025.
- There is uncertainty regarding the timing of industrial sector recovery, which has shifted expectations for load growth into 2025.
Q & A Highlights
Q: Can you provide an update on Duke Energy's credit position post-storms and the impact of tax credit monetization?
A: Brian Savoy, CFO, explained that storm costs will temporarily impact credit in 2024, but recovery mechanisms in 2025 will resolve this. Duke Energy is tracking in the high 13% range for 2024 FFO to debt, with storm costs impacting this figure. The company has completed $200 million in tax credit monetization and expects to reach the upper half of the $300 million to $500 million range by year-end, positively impacting credit metrics.
Q: How is Duke Energy's load growth outlook, and are there any updates on economic development figures?
A: Brian Savoy noted that Duke Energy is trending towards the top end of its 1.5% to 2% CAGR load growth range. The company has signed agreements for 2 gigawatts of data centers, indicating strong economic development activity. Duke expects load growth to increase as these projects come online, particularly in 2027 and 2028.
Q: What is the impact of the recent hurricanes on Duke Energy's 2024 earnings?
A: Brian Savoy stated that the hurricanes resulted in a few cents impact on earnings due to restoration costs and lost revenues from customer outages. The company is working on mitigation measures to constrain the hurricane impact to 2024, maintaining optimism for 2025 growth.
Q: Could you discuss Duke Energy's approach to new nuclear projects and the considerations involved?
A: Harry Sideris, President, highlighted the promise of SMRs (Small Modular Reactors) and the support from customers and stakeholders. Duke Energy is evaluating first-of-the-kind risks, cost overrun protection, and balance sheet protection. The company is working with commissions in North and South Carolina on early development activities.
Q: What are the key elements of Duke Energy's Indiana IRP (Integrated Resource Plan)?
A: Brian Savoy explained that the Indiana IRP includes transitioning the Cayuga plant to gas, adding storage and solar, and diversifying the fuel supply. The company plans to file a Certificate of Public Convenience and Necessity (CPCN) for the Cayuga plant in early 2025, with broad stakeholder support for the plan.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
