Duke Energy CORP (DUK)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 adjusted EPS was $1.66, up 10% year over year (vs. $1.51 in Q4 2023) and modestly above Q3’s $1.62; reported EPS was $1.54 .
• Revenue was $7.36B, +2% YoY (Q4 2023: $7.21B) but down sequentially from Q3’s $8.15B; operating income was $2.11B in Q4 .
• Management introduced 2025 adjusted EPS guidance of $6.17–$6.42 (midpoint $6.30), extended the 5–7% EPS CAGR through 2029, and lifted the 5-year capital plan to $83B (+12% vs. prior $73B) to fund generation and grid investments amid accelerating load growth (3–4% by 2027–2029) .
• Key catalysts: data center/economic development pipeline (7 GW advanced-stage; broader pipeline ≥ double), constructive regulatory outcomes (multiyear rate plans), and monetization of energy tax credits supporting FFO/debt ≥14% by end-2025 .

What Went Well and What Went Wrong

• What Went Well

  • “We announced 2024 adjusted EPS of $5.90, finishing within our guidance range,” reflecting rate increases/riders and customer growth despite storms .
  • Guidance and growth: “2025 EPS guidance $6.17–$6.42 (midpoint $6.30); $83B capital plan drives ~7.7% earnings base growth; 5–7% EPS CAGR through 2029” .
  • Data center momentum: Near-term cloud compute projects with generative AI later in the plan; “no pullback…in fact, acceleration” in hyperscaler discussions .

• What Went Wrong

  • Storm headwinds: Q4 impacted by Hurricanes Helene/Milton—higher O&M, depreciation, interest and lost revenues from outages; Q3 was also pressured by Debby and Helene .
  • Other segment drag: Q4 adjusted loss of $(186)mm vs. $(133)mm YoY due to higher interest expense and storm-related items (insurance deductible special) .
  • Industrial softness timing: Signs of slower rebound in certain legacy industrial sectors, with recovery pushed into 2025 (noted in prior quarter commentary) .

Financial Results

Segment adjusted results (Q4 2024 vs. Q4 2023):

Selected KPIs (Electric Utilities & Infrastructure):

Key drivers (management disclosure):

• Quarterly adjusted improvements driven by rate increases/riders; offsets from higher interest and depreciation on growing asset base .
• Storm costs/lost revenues: Q3 and Q4 impacted by historic hurricane season; majority of storm costs deferred/capitalized, with recovery mechanisms (e.g., Florida riders, Carolinas securitization) .

Guidance Changes

Dividend: “99th consecutive year of paying a quarterly cash dividend”; commitment unchanged .

Earnings Call Themes & Trends

Management Commentary

• Lynn Good: “We announced 2024 adjusted earnings per share of $5.90, finishing within our guidance range…We also announced updated guidance…2025 EPS $6.17–$6.42…an $83 billion capital plan…continuation of our 5% to 7% EPS growth rate through 2029” .
• Harry Sideris: “We are executing our all-of-the-above generation strategy…started construction on over 2 gigawatts of natural gas…filing CPCNs for our next round of gas plants…important grid investments will continue to be a significant portion of our 5-year capital plan” .
• Brian Savoy: “We set our 2025 EPS guidance range at $6.17 to $6.42…the $6.30 midpoint represents around 7% growth over 2024…retail sales growth of 1.5% to 2% in 2025…FFO to debt above 14% with >100 bps cushion vs Moody’s, >200 bps vs S&P” .

Q&A Highlights

• EPS growth positioning: Opportunity to earn in the top half of 5–7% in 2027–2029 on accelerating load; specifics for 2027 not provided but year is an inflection point .
• Hyperscalers/data centers: Efficiency gains (e.g., DeepSeek) not reducing demand; speed-to-market emphasized; near-term cloud compute projects with generative AI later driving larger loads .
• Equity funding and hybrids: ~$6.5B equity over 5 years via ATM/DRIP; hybrids attractive and may be evaluated .
• O&M timing & storms: 2025 O&M includes catch-up on deferred projects/outages due to 2024 storms; additional O&M set aside for storms given increased frequency .
• South Carolina legislation: Tone-setting supportive of dual-state system, regulatory timelines, and all-of-the-above strategy; no plan changes anticipated .

Estimates Context

• Wall Street consensus (S&P Global) for Q4 2024 EPS, revenue, EBITDA was unavailable today due to SPGI request limit. As a result, we cannot provide a beat/miss assessment versus consensus for this quarter [Values retrieved from S&P Global unavailable due to API daily limit].

Key Takeaways for Investors

• Sequential EPS resilience: Q4 adjusted EPS rose to $1.66 (vs. $1.62 in Q3) despite lower seasonal revenue and storm headwinds—rate cases and riders are flowing through .
• Structural growth upgrade: The capital plan increased to $83B with ~45% grid, backing ~7.7% earnings base growth and 5–7% EPS CAGR through 2029; consider higher capital intensity and recoverability via riders/multiyear rate plans .
• Load acceleration: Expect enterprise load growth to step up to 3–4% in 2027–2029 (Carolinas 4–5%); robust data center and advanced manufacturing pipeline offers upside if projects materialize on schedule .
• Balance sheet pathway: Target FFO/debt ≥14% with meaningful cushion vs. agency thresholds; ongoing tax credit monetization and programmatic equity provide flexible funding .
• Storm normalization: 2024 storms were large one-offs; recovery mechanisms (FL riders, Carolinas securitization) and O&M planning should mitigate lingering impact into 2025 .
• Regulatory backdrop: Constructive outcomes across major jurisdictions (NC, SC, FL, IN) reduce near-term rate case exposure and support timely investment recovery .
• Watch items: Execution on generation builds/CPCNs, timing of data center ramps, interest rate trajectory, and potential hybrid issuance to optimize equity needs .