Shares of Duke Energy declined 2% in midday trading after third quarter earnings missed analysts’ forecast due to hurricane-related costs including the restoration of 5.5 million power outages.
Adjusted earnings per share declined to $1.62 in the three months ended Sept. 30 from $1.94 a year earlier, the Charlotte-based utility said in a statement. Analysts expected per-share earnings of $1.70.
Duke projected adjusted earnings of $5.85 to $6.10 a share in 2024, reaffirming its outlook. Analysts forecast profit of $5.98. Citing “robust economic development and population migration’’ into its markets, the company also reaffirmed its long-term adjusted EPS growth rate of 5% to 7% through 2028.
In an analysts’ presentation, the company cited “significant economic development from data centers and advanced manufacturing’’ as drivers of long-term growth. It forecast that data center load will grow to 10% of total commercial sales in 2028 from 3% in 2023.
Duke added that the Carolinas and Florida remain top states for population growth
In the quarter, revenues of $8.15 billion increased from $7.99 billion a year earlier. Analysts had forecast $8.06 billion
Damage from hurricanes Debby, Helene and Milton will result in storm restoration costs, including capital expenditures, that Duke estimated at $2.4 billion to $2.9 billion. The company said the estimates will change as restoration work is completed and actual costs become clear.
“We recognize that our work is not done,’’ CEO Lynn Good said on an analysts’ call. Third quarter results reflect costs from Debby while expenses related to Helene and Milton will extend into the fourth quarter, she said.
Starting with Debby in August, the three hurricanes caused damage to Duke’s service areas from Florida to the Carolinas and Indiana. Crews replaced approximately 20,000 poles, 2,100 miles of wire and 16,000 transformers, while rebuilding systems completely in parts of the Carolinas and the Florida coast, according to the presentation.
The company will recognize the Helene and Milton expenses in the third and fourth quarters.
The company estimated preliminary storm-related costs of $1 billion to $1.1 billion for Duke Energy Florida, $950 million to $1.15 billion for Duke Energy Carolinas and $350 million to $450 million for Duke Energy Carolinas.
The three subsidiaries are “executing on all available avenues as quickly as possible to recover storm-related costs,’’ including insurance recovery and the securitization for certain costs, where applicable.
Duke said the three units have entered into term loan facilities for $1.75 billion intended to meet incremental financing needs, with an ability to increase borrowing by an additional $850 million.
Duke said last month it plans to ask regulators for permission to issue storm bonds to cover millions of dollars in expenses for replacing about 2,000 transformers, more than 12,000 power poles and other infrastructure destroyed by Helene.
If issuance of the bonds is approved by the N.C. Utilities Commission, customers of the Charlotte-based utility would repay the debt starting in late 2025 or early 2026, according to company spokeswoman Logan Stewart.
