Duke Lifts Profit as Electric Utility Earnings Rise
Adjusted earnings increased to $1.43 a share despite a regulatory-settlement charge.
Duke Energy (DUK), the regulated electric and natural-gas utility, lifted second-quarter operating income 12.0% as lower operating expenses outpaced modest revenue growth.
The improvement came as Duke recovered infrastructure investments and benefited from rate increases and higher electricity volumes. A comprehensive North Carolina rate-case settlement resolved contested revenue issues but produced a larger charge than the company had anticipated under an earlier partial agreement.
Reported earnings rose to $1.38 a share from $1.25 a year earlier, while adjusted earnings increased from $1.25. Operating revenue advanced 1.1% to $7.592 billion, driven by a $135 million increase in regulated-electric revenue that outweighed a $44 million decline in regulated-natural-gas revenue.
Adjusted income from Electric Utilities and Infrastructure climbed 9.7% to $1.310 billion. Rate-case impacts added $0.10 a share, riders and other retail margin contributed $0.09, and volume added $0.08, while higher depreciation, interest expense and unfavorable weather reduced the gain.
Total operating expenses declined $139 million as operation, maintenance and other costs fell $270 million. That decrease absorbed increases of $117 million in depreciation and amortization and $60 million in interest expense, reflecting the costs accompanying Duke's infrastructure investment.
First-half adjusted earnings rose to $3.36 a share from $3.00, with rate cases and retail-margin riders providing the largest benefits. Duke reaffirmed its 2026 adjusted earnings guidance of $6.55 to $6.80 a share and continues to target annual adjusted earnings growth of 5% to 7% through 2030.
The Duke Energy Carolinas settlement set an authorized return on equity of 9.8%, below Duke's revised 10.48% request, and reduced the multi-year capital program to about $3.8 billion. Duke recorded a $51 million pretax settlement charge, equal to $0.05 a share, compared with the roughly $10 million charge anticipated under the earlier partial stipulation.