Forbes  3 hrs ago  Comment 
Looking at units outstanding versus one week prior within the universe of ETFs covered at ETF Channel, the biggest outflow was seen in the Utilities Select Sector SPDR Fund (XLU), where 14,350,000 units were destroyed, or a 8.5% decrease week over...
Market Intelligence Center  Mar 4  Comment 
Duke Energy Corp (DUK) presents a trading opportunity that offers a 3.94% return in just 135 days. A covered call on Duke Energy at the $77.50 level expiring on Jul. '15 offers an assigned return rate of 3.94% or 10.66% annualized. This trade...
Forbes  Mar 2  Comment 
The company needs to make sure that its power generation costs are not affected so significantly by fluctuations in the price of power. It will have to pursue more stable electricity generation sources for this purpose in the future. A good sign...
Jutia Group  Feb 26  Comment 
[PR Newswire] - CHARLOTTE, N.C., Feb. 26, 2015 /PRNewswire/ -- More than 1,000 additional personnel are responding to Duke Energy's hardest-hit areas today – restoring power to thousands in North Carolina affected by an overnight snowstorm....
Jutia Group  Feb 25  Comment 
[PR Newswire] - CHARLOTTE, N.C., Feb. 25, 2015 /PRNewswire/ -- With the heavy snow forecasted for the Carolinas tonight and tomorrow morning, Duke Energy says it is closely monitoring the storm and preparing for the worst. ... Read more on this. ...
Insurance Journal  Feb 23  Comment 
Federal prosecutors filed multiple criminal charges against Duke Energy on Friday over years of illegal pollution leaking from coal ash dumps at five North Carolina power plants. The three U.S. Attorney’s Offices covering the state charged Duke...
New York Times  Feb 21  Comment 
Federal prosecutors accused the nation’s largest electric utility of violating the federal Clean Water Act in a spill last year in North Carolina.
Wall Street Journal  Feb 20  Comment 
Duke Energy Corp. has agreed to settle charges that it violated the federal Clean Water Act by spilling coal ash into the Dan River in North Carolina last year, and will pay $102.2 million in penalties and restitution.
Jutia Group  Feb 20  Comment 
[PR Newswire] - CHARLOTTE, N.C., Feb. 20, 2015 /PRNewswire/ -- Duke Energy customers in the Carolinas today established all-time peak energy usage records. The unofficial Duke Energy Carolinas and Duke Energy Progress ... Read more on this. Duke...


is one of the five largest electric utility companies in the United States, providing 28,000 megawhats of electricity to 3.9 million customers in North Carolina, South Carolina, Indiana, Ohio and Kentucky[1][2] - enough electricity to power over 20 million homes. Duke is unusual among electric utilities in that it produces only 1/3 of its electricity from coal. This effectively insulates it against increases in coal prices and means its power generation portfolio is more diverse than that of its peers.

==Business Overview==8============d

Business & Financial Metrics[3]

In 2009, Duke generated a net income of $1.08 billion on revenues of $12.73 billion. This represents a 20.1% decrease in net income and a 3.6% decrease in total revenues from 2008, when the company earned $1.36 billion on $13.21 billion in revenue.

Business Segments[4]

U.S. Franchised Electric and Gas (85.6% of EBIT)

U.S. Franchised Electric and Gas (now U.S. Franchised Electric post Spectra spin-off), operates in North Carolina, South Carolina, Indiana, Ohio and Kentucky.

Commercial Power (1.0% of EBIT)

Owns and operates unregulated power plants primarily within the Midwest. Develops, owns and operates electric generation sources that serve large energy consumers, municipalities, utilities and industrial facilities.

Duke Energy International (13.5% of EBIT)

Operations are located in Central and South America with approximately 4,000 MW of generation, primarily hydroelectric, in six countries: Argentina, Brazil, Ecuador, El Salvador, Guatemala and Peru.


Key Trends/Forces

Rising Fossil Fuel Prices

Prices for fossil fuels, the key energy input for many of Duke’s electrical generation plants, have risen steadily over the past few years with the price of oil approximately quadrupling since the year 2000.[5] The booming overseas growth from industrializing counties such as China and India have pushed fossil fuel demand and prices new to new heights. To hedge against a sustained high energy price environment, Duke Energy, other utility companies and the government, have been forced to look at alternate means of energy production which are cost effective and clean. Duke which only produces 56% of its energy from coal, is already well below the industry average in its use of fossil fuels.

Nuclear Power & Electricity Generation

The key difference between nuclear and fossil plants is the cost structure. Nuclear plants require very large capital investments (to construct the plant) but little expenditure for fuel because it takes relatively little uranium to power a plant. On the other hand, fossil fuel plants require relatively little capital investment but have high fuel costs because they require large amounts of coal, oil or gas. In the past, low fossil fuel prices gave given fossil fuel plants a cost advantage over nuclear plants. The cost advantage, compounded by the stigmas of nuclear energy (the not in my backyard phenomenon) has prevented new nuclear construction for almost 30 years.[6] Record fossil fuel prices have begun to reverse this trend. The possibility and implications of peak oil may reinforce this reversal. Already, nuclear utilities such as Duke Energy, Exelon and Entergy have begun filing for permits for construction of new nuclear plants.

Of course, it is critical to remember that a substantial portion of Duke Energy's business remains vulnerable to rising energy prices and could see a negative impact on earnings if fossil fuel prices continue to rise.

In all, the legislative environment is favorable for Duke Energy. Increasing concern over global warming makes US carbon emission legislation likely in the short to midterm. Because a significant portion of Duke's portfolio is in nuclear energy any legislation based on carbon trading markets will allow Duke to offset emissions at its carbon based plants with carbon credits from its renewable and nuclear plants.

Global Warming and Environmentalism

Over the past few years, global warming has moved from the fringes to become one of the single greatest single challenges facing the world today. A growing body of scientific evidence ties carbon dioxide emissions to rising temperatures. As a result of growing popular awareness of the risks of global warming, many large corporations have stepped up their efforts to project greener images. Additionally, many expect the U.S. government to enact more stringent legislation limiting carbon emissions. Environmental awareness is another key trend driving the renaissance of nuclear energy. Compared to their fossil fuel peers, nuclear energy plants have negligible emissions. Duke operates a number of hydroelectric, alternative and renewable energy plants. The company recently began to push for higher efficiency standards and other environmentally friendly state policies in the areas it operates, probably hoping that a paradigm shift will facilitate a shift towards renewable energy, ultimately benefiting the company.


Duke's competitors include:


  1. [Segments]
  2. DUK's Energy Business Segments
  3. DUK 2009 10-K pg. 33  
  4. 4.0 4.1 DUK 2009 10-K pg. 39  
  5. NYTimes (9/13/07) - Crude Oil Price Closes above $80
  6. Scientific American (9/26/07) - Nuclear Power Reborn
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