Duke Energy beats quarterly estimates as power demand in the Carolinas increases

By Sumit Saha

Nov 7 (Reuters) - Duke Energy DUK.N beat Wall Street estimates for third-quarter revenue and profit on Friday, helped by higher electricity rates and strong power demand, with the U.S. electric utility signing more deals to supply energy-intensive data centers.

The technology industry's AI data centers, combined with the accelerating electrification of homes and businesses, are expected to push U.S. power demand to record levels in 2025 and 2026, according to the U.S. Energy Information Administration.

Duke, which primarily operates in the Carolinas, has signed about three gigawatts worth of energy service agreements with data centers this year, including deals with Digital Realty and Edged in the reported quarter. The company has more data center deals in its pipeline, Chief Financial Officer Brian Savoy told Reuters, without disclosing the number of the potential agreements.

"I think you’ll see the three gigawatts grow in a meaningful way as we move through the quarters," Savoy said. One gigawatt is enough to power about 750,000 homes.

UTILITIES UPGRADE CAPACITY

To meet this rising demand, power companies have accelerated plans to upgrade electrical systems, install electrical lines and build power plants.

Duke plans to add over 13 gigawatts of energy capacity over the next five years, and the company expects to earn in the upper half of its 5% to 7% profit growth range starting in 2028, CEO Harry Sideris said during a post-earnings call.

He added that the company's refreshed five-year capital plan, expected in February, will range between $95 billion and $105 billion.

Duke is weighing the addition of large traditional reactors and next-generation nuclear reactors and extending some coal plants to meet surging power demand in the Carolinas.

In Florida, Duke expects to recover around $1.1 billion in storm-related costs by February next year.

Adjusted earnings from the company's electric utilities segment for the reported quarter were $1.69 billion, up from $1.46 billion in the year-ago quarter.

Duke narrowed its full-year adjusted profit forecast to between $6.25 and $6.35 per share from its prior view of $6.17 to $6.42 per share.

Quarterly revenue came in at $8.54 billion, ahead of analysts' estimate of $8.50 billion, as per data compiled by LSEG.

The Charlotte, North Carolina-based company posted an adjusted profit of $1.81 per share for the three months ended September 30, compared with estimates of $1.75 per share.