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Duke Energy earnings rise as it contends with China, AI

More customers, higher rates boosted its earnings.
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Climate, China, hacking, AI, interest rates: You could fill a macroeconomic bingo card with recent headlines about Duke Energy.

The utility company, which has some 8.4 million electric customers in six states and 1.7 million gas customers in five states, posted its Q4 2023 earnings last week. Its full-year adjusted earnings per share was $5.56, about 6% higher than in 2022, but its Q4 EPS was slightly below analysts’ expectations. Its reported earnings for the year were $4.2 billion for electricity and $519 million for gas, up from $4 billion from electricity and $468 million from gas in 2022.

The earnings growth was driven by a lower tax rate, lower operations and maintenance expenses, and “contributions from rate cases” (read: permission to raise prices), the company said in a statement. Duke also gained a record 195,000 new customers last year, largely in the Sunbelt states of Florida and the Carolinas.

Headwinds the company faced in 2023 included high interest rates, depreciation, and what it referred to in an earnings call as “record mild weather.” The weather —which most of us thought of as, well, prettyhot—cost Duke Energy’s electric utilities segment around $245 million pretax and brought its EPS down by 25 cents.

The company reiterated its forecast of 5%–7% adjusted EPS growth between 2024 and 2028.

Divesting from Chinese batteries: Following pressuret from Congress, Duke Energy agreed to remove energy storage batteries made by Chinese manufacturer CATL from Marine Corps base Camp Lejeune, Reuters reported. It will stop using CATL batteries company-wide by 2027 due to concerns that hackers with ties to the Chinese government could use them to infiltrate the US power grid.

Big Tech asked to DIY: Duke Energy is talking with major tech firms about paying them to use their generators to power data centers during times of high demand, Bloomberg reported. Tech companies’ demand for power has grown recently because of their adoption of generative AI.

News built for finance pros

CFO Brew helps finance pros navigate their roles with insights into risk management, compliance, and strategy through our newsletter, virtual events, and digital guides.