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An energy company with an integrated network of energy assets. The company manages a portfolio of natural gas and electric supply, delivery and trading businesses.
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NtscrbEnergy (97.70) Submitted: 12/13/06 8:28 AM : Start Price: $17.75 DUK Score: 22.82
Duke Energy (DUK) is a diversified energy company with presence in both natural gas and electric businesses. These businesses operate in regulated as well as unregulated markets. It also has an affiliated real estate business, which is a highly profitable venture. The company has a fleet of electricity generation assets that include nuclear generating stations, coal-fired stations, hydroelectric stations and combustion turbine units. With the addition of Cinergy Corp., the generating capability of DUK has reached approximately 29,000 megawatts.DUK is divesting its money-losing non-core assets and has recently finished the sale of its commercial marketing and trading business. This will help it in focusing on its core business. The company’s regulated utility and gas transmission assets contribute a lion’s share in its earnings, thanks to the utility's low-cost coal and nuclear generation. DUK's other businesses are embedded with higher risk. However, they have shown strong results in the past. Nevertheless, the recent up-swing in coal prices could pose as a barrier to the profitability of DUK’s regulated utility. We say so, eyeing the fact that the utility is operating under the frozen rate regime until the end of 2007.The recent proposed project of a 1,600-mile gas pipeline and investments worth $2 billion in new coal-fired power plant are expected to prove fruitful for the company. Retraction by Public Utility Holding Company Act to divest the highly profitable real estate division will act as a boon for DUK. Additionally, the company’s search for a joint venture partner for this business will help in freeing up capital for its other businesses. We believe that the company’s business strategy will lift the stock to new highs.
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NtscrbEnergy (97.70) Submitted: 4/16/07 8:14 AM
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It’s all happening at Duke Energy. The company divested a significant portion of its merchant generation i.e. Duke Energy Merchants, LLC and materially solved the earnings drag associated with its merchant generation business. Duke completed the spin-off of Spectra Energy in January 2007, purchased core assets, achieved positive regulatory outcomes, and obtained Department of Energy support for its clean coal technology projects. United States residential electricity consumption in the past quarter increased on account of winter demand, especially from the East North Central, Mid-Atlantic and South Atlantic regions. However, normal weather assumed for the rest of 2007 and 2008, would result in relatively normal annual growth of about 2% per year for U.S. electricity consumption. Although rate caps in certain states may expire this year, the relatively slow growth in generation fuel costs should keep the growth in the U.S. residential electricity prices at a comparatively low rate of 2.4% during 2007. Residential customers in the West North Central region could see slight decreases in prices during 2007 as a result of moderation in the cost of coal for electric power generation during the latter months of 2006. Duke’s three-fold underlined growth strategy for 2007 and beyond is to concentrate on integrating Cinergy’s operations to achieve enhanced cost reductions and acquisition synergies. Generate steady sales growth of 1.5% in kilowatt-hour demand from the Carolinas and 1% in the Midwest regions. Obtain returns on the regulated capital expenditure of $9 billion planned for the next three years, augurs well for Duke Energy. Further, the company’s guidance for 2007 focuses on 4%-6% growth based on its current assets. With the positive business restructuring, moderate industry growth, operational synergies from Cinergy’s acquisition, Duke is worth buying at current level.
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bcarling02 (< 20) Submitted: 6/25/07 11:23 PM
Duke continues to fall? I am new to stock investing and am not sure where to get info like you shared. Would you be willing to share your knowledge on company research ?
RandomGuy123 (< 20) Submitted: 7/07/07 2:09 AM
www.seekingalpha.com is the best financial blog compilation on the internet, and as with any company, you can usually find all you need to know on their quarterly and annual reports.
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