Executive Summary

Q4 2023 adjusted EPS was $1.51 (vs. $1.11 in Q4 2022) on total operating revenues of $7.21B (vs. $7.35B), with strength from lower O&M, favorable rate case impacts/riders, and lower taxes partially offset by higher interest and depreciation .
Full-year 2023 adjusted EPS was $5.56 (within guidance) and the company introduced 2024 adjusted EPS guidance of $5.85–$6.10 (midpoint $5.98), reaffirming 5%–7% long-term growth through 2028; 5-year capex plan lifted to $73B (+$8B) to support growth and the energy transition .
Management targets FFO/debt of ~14% by end-2024 aided by normalized weather, regulatory actions, fuel deferral collection, and monetization of IRA nuclear PTCs; expects equity issuance of ~$500M annually via DRIP/ATM over five years to fund the higher plan .
Narrative catalysts: increased long-term load growth outlook to 1.5%–2% (from 0.5%–1%), introduction of specific equity plan, payout ratio target reset to 60%–70% (was 65%–75%), and concrete timelines for new gas generation CPCNs/online dates (2028–2029) .

What Went Well and What Went Wrong

What Went Well
- Constructive regulatory outcomes (NC PBR/multiyear plans) and portfolio simplification drove Q4 and FY23 performance; adjusted EPS $1.51 in Q4 and $5.56 for FY23 .
- Management raised five-year capex to $73B and highlighted stronger jurisdictional growth, pointing to data centers/semis/EVs/batteries demand; “Our growth potential is the highest it’s been in decades” (CEO) .
- Nuclear PTC monetization track: pilot transfer transaction completed in 2023 “within planning range,” expecting “several hundred million dollars per year” beginning 2024, supportive of customer bills and credit metrics .
What Went Wrong
- Revenues declined YoY in Q4 ($7.21B vs. $7.35B) as higher interest and depreciation weighed; volume softness persisted through 2023 amid mild weather and industrial pullback .
- Interest expense pressure remained a notable headwind in Q4 (explicit EPS drag shown in variance) and across FY23 on a growing asset base and higher rates .
- O&M outlook moderated: after signaling 2024 O&M below 2023 on the Q3 call, management guided to 2024 O&M “largely flat” vs. 2023 in Q4 prepared remarks, reflecting inflation offsets via efficiencies rather than absolute reductions .

Financial Results

Quarterly EPS trajectory (Adjusted and Reported)

Metric	Q2 2023	Q3 2023	Q4 2023
Adjusted EPS ($)	$0.91	$1.94	$1.51
Reported EPS ($)	($0.32)	$1.59	$1.27

Q4 2023 vs. Q4 2022 – revenues and EPS

Metric	Q4 2022	Q4 2023
Total Operating Revenues ($USD Billions)	$7.35	$7.21
Operating Income ($USD Billions)	$1.19	$1.86
EPS (Reported)	($0.86)	$1.27
EPS (Adjusted)	$1.11	$1.51

Drivers of Q4 YoY: lower O&M, favorable rate/rider impacts, lower tax expense offset by higher interest and depreciation; detailed EPS variance provided (e.g., +$0.16 O&M, +$0.13 rate case, −$0.13 interest, −$0.06 D&A) .
Non-GAAP adjustments Q4: Regulatory matters (−$0.03), organizational optimization (+$0.13), discontinued operations (+$0.14); adjusted EPS $1.51 .

Q4 2023 revenue mix

Category	Q4 2023
Regulated Electric Revenue ($USD Billions)	$6.48
Regulated Natural Gas Revenue ($USD Billions)	$0.66
Nonregulated/Other Revenue ($USD Billions)	$0.08
Total Operating Revenues ($USD Billions)	$7.21

Q4 2023 segment earnings (adjusted)

Segment	Q4 2023 Adjusted Segment Income ($USD Millions)
Electric Utilities & Infrastructure	$1,115
Gas Utilities & Infrastructure	$192
Other (Adjusted Net Loss)	($133)

Select KPIs and operating indicators

KPI	Value
Customers added in 2023	195,000 (largest increase in company history)
Residential customer growth (2023)	Carolinas 2.1%; Florida 2.0%
Nuclear fleet capacity factor (2023)	96% (25th year >90%)
2024 retail volume growth expectation	~2% (normal weather assumed)
Long-term load growth outlook	1.5%–2% over forecast period
Effective tax rate (ETR)	2023: 10%; 2024E: 12%–14%
Dividend continuity	98th consecutive year of quarterly dividend in 2024
Five-year capital plan	$73B (+$8B vs. prior plan)

Note: Operating margin (Q4 2023 ≈ 25.7% vs. Q4 2022 ≈ 16.2%) calculated from operating income and revenue disclosed above .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EPS	FY 2024	n/a	$5.85–$6.10 (midpoint $5.98)	Introduced
Long-term EPS CAGR	2024–2028	5%–7% (through 2027)	5%–7% (through 2028)	Maintained/extended
Capital plan	5-year	~$65B (discussed)	$73B (+$8B)	Raised
Long-term load growth	Multi-year	~0.5%–1%	1.5%–2%	Raised
Equity financing	2024–2028	“Evaluate DRIP/ATM” (no amount)	~$500M/yr via DRIP/ATM	Introduced/quantified
Dividend payout ratio target	Ongoing	65%–75% [historical]	60%–70%	Lowered (more flexibility)
Effective tax rate	FY 2024	n/a	12%–14% (vs. 10% in 2023)	Higher ETR expected

Earnings Call Themes & Trends

Topic	Q2 2023 (Prior-2)	Q3 2023 (Prior-1)	Q4 2023 (Current)	Trend
Load and volumes	Mild weather; plan for agility; LT ~0.5% growth	Volumes down 1.2%; ED projects add 7–9 TWh by 2027	2024 ~2% volume growth; LT 1.5%–2% outlook	Improving LT demand outlook
Regulatory (NC PBR)	DEP interim rates (Jun 1); DEC hearing upcoming	DEP PBR order done; DEC order expected; higher ROE/equity ratios	Updated NC rates in place; multiyear plans driving 2024	Constructive constructs in place
O&M/cost management	$300M structural O&M; added agility offsets	2024 O&M guided “lower than 2023”	2024 O&M “largely flat to 2023,” efficiency offsets inflation	Stable cost base with efficiencies
Capital plan	$65B through 2027	Signaled likely increase	Raised to $73B (+$8B)	Increasing capex runway
Nuclear PTCs (IRA)	Incorporating IRA benefits	Settlement on PTC flowback; transferability plan	Pilot transfer done; several hundred $MM/yr expected from 2024	Execution progressing
Equity/credit metrics	FFO/debt 13%–14% (2023), 14% (2024)	Maintain 14% minimum longer term	$500M/yr equity; path to 14% in 2024	Balanced funding plan

Management Commentary

“2024 marks a fundamental repositioning... With the commercial renewable sale, we've transformed our business to become a fully regulated utility... We are now projecting $73 billion in CapEx over the next 5 years” (CEO) .
“These economic development and customer migration trends give us confidence in our 1.5% to 2% load growth expectation over the forecast period” (CFO) .
“We expect to raise $500 million annually over the 5-year plan starting in 2024, using at the market and dividend reinvestment programs” (CFO) .
“We intend to monetize [nuclear] credits in the transferability markets... we expect to qualify for several hundred million dollars per year beginning in '24” (CFO) .

Q&A Highlights

Nuclear PTC transferability: pilot transaction completed in 2023 “right within our planning range”; management sees robust market demand and believes policy support remains strong given national infrastructure priorities .
Equity cadence: ~~$500M/yr planned via DRIP (~~$200M) and ATM (~$300M) to fund the higher capex while targeting ≥14% FFO/debt; balanced funding within 30%–50% equity for incremental capex was reiterated .
New gas generation timing in the Carolinas: CTs targeted for 2028 and CCs in 2028–2029; capex ramps over the 5-year plan with larger spend in later construction years .
Load growth distribution: strongest in the Carolinas, with healthy growth in Florida and Indiana; residential growth led in Carolinas/Florida, C&I strength more balanced across regions .
Dividend policy/payout: target payout ratio lowered to 60%–70% to enhance financial flexibility while continuing dividend growth; under 70% in 2024 .
Year-to-year EPS delivery: management expects to land within the 5%–7% range annually, not just as a back-end CAGR .

Estimates Context

S&P Global consensus (EPS, revenue) for Q4 2023 and FY2023 was not retrievable due to access limits; as a result, we cannot formally assess headline beats/misses relative to S&P consensus at this time (Values from S&P Global unavailable due to API limit).
Internal drivers vs. prior year were clearly disclosed: Q4 adjusted EPS rose to $1.51 from $1.11 on cost control, regulatory outcomes and lower tax, partially offset by higher interest and depreciation .

Key Takeaways for Investors

The pivot to a 100% regulated model, constructive NC PBR/multiyear frameworks, and a larger $73B capex plan extend visibility on 5%–7% EPS growth through 2028 .
Load thesis strengthening: long-term growth raised to 1.5%–2% as economic development (data centers, semis, EV/batteries, pharma) and migration drive demand; 2024 retail volume expected ~2% with normal weather .
Funding plan is balanced and de-risked: ~$500M/yr equity via DRIP/ATM plus monetized nuclear PTCs and fuel deferral collections support the path to ~14% FFO/debt in 2024 .
Dividend remains a core component of total return, with a reset payout target (60%–70%) that improves flexibility while sustaining growth (98th consecutive year in 2024) .
Near-term headwinds (interest expense, depreciation) persist, but are being offset by favorable regulatory outcomes, O&M efficiency, tax optimization and IRA benefits .
Project execution catalysts in 2024–2025: CPCN filings/approvals, solar/storage annuity, and gas generation progress in the Carolinas/Indiana; clarity on Treasury’s nuclear PTC guidance (expected 1H 2024) should further solidify the IRA cash flow path .

Notes:

All non-GAAP figures and reconciliations are per the company’s Q4 2023 earnings materials; key Q4 adjustments were Regulatory matters (−$0.03), Organizational optimization (+$0.13), and Discontinued operations (+$0.14) to arrive at adjusted EPS of $1.51 .
Q4 drivers include detailed EPS bridge components (e.g., +$0.16 O&M, +$0.13 rate case, −$0.13 interest, −$0.06 D&A), consistent with reported narratives on cost control and rate actions .

Duke Energy CORP (DUK)·Q4 2023 Earnings Summary