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Duke Energy Misses Q1 Earnings Estimates: ETFs in Focus

Shares of Duke Energy Corp. DUK closed 0.98% lower at market close on Tuesday, May 9, 2017, after it missed estimates for the first quarter of 2017. The company reported a year-over-year increase of 6.54% in net quarterly revenues.

Quarterly Performance

Duke Energy reported non-GAAP earnings per share of $1.04, which came below the Zacks Consensus Estimate of $1.06 and the year-ago earnings of $1.13. Moreover, revenues of $5.729 billion missed the consensus mark of $5.803 billion. Operating income rose to $1.437 billion from $1.240 billion a year earlier.

Segment Performance

Electric Utilities and Infrastructure reported operating revenues of $4.947 billion, down from $5.089 billion a year ago. Segment income amounted to $635 million, down from $664 million a year ago.

Gas Utilities and Infrastructure reported operating revenues of $670 million, up from $170 million a year ago. Moreover, segment income amounted to $133 million, up from $32 million a year ago.

Commercial Renewables reported operating revenues of $128 million, up from $114 million a year ago. Segment income amounted to $25 million, down from $26 million a year ago.

Other Revenues amounted to $33 million, up from $29 million a year ago. Segment expenses totaled $77 million (before adjusting Piedmont merger costs), down from net expense of $148 million a year ago.

Outlook

Duke Energy reiterated its full-year 2017 adjusted earnings guidance of $4.50-$4.70 per share.

In the current scenario, we believe it is prudent to discuss the following ETFs that have a relatively high exposure to Duke Energy.

Utilities Select Sector SPDR Fund XLU

XLU is one of the most popular funds in the utility space. It primarily provides exposure to U.S. companies in electricity or natural gas space. The fund has AUM of $7.14 billion and is a relatively cheaper bet as it charges a fee of 14 basis points a year. It has an 8.24% allocation to Duke Energy (as of May 8, 2017). It closed 0.73% lower at market close on Tuesday, May 9, 2017.

The fund returned 4.03% in the past year and 5.68% in the year-to-date time frame (as of May 9, 2017). It currently has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook (read: Are the Q4 Earnings Clouds Clearing for Utility ETFs?).

VanEck Vectors Uranium+Nuclear Energy ETF NLR

This fund seeks to provide exposure to uranium, a key component in the nuclear power industry. NLR is an expensive bet on the energy sector. This fund has AUM of $30.5 million and charges a fee of 61 basis points a year. It has 7.99% allocation to Duke Energy (as of May 9, 2017). It closed 0.15% lower at market close on Tuesday, May 09, 2017. The fund returned 2.57% in the past one year and 4.32% in the year-to-date time frame (as of May 9, 2017).

iShares U.S. Utilities ETF IDU

This ETF offers targeted exposure to U.S. utility companies. It has AUM of $801.29 million and charges a fee of 44 basis points a year. It has a 7.68% allocation to Duke Energy (as of May 8, 2017). It closed 0.90% lower at market close on Tuesday, May 09, 2017. The fund returned 3.92% in the past one year and 5.25% in the year-to-date time frame (as of May 9, 2017). It currently has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook (read: 4 Sector ETFs to Profit from if Geopolitics Rule).

Below is a chart comparing the performance of the funds and Duke Energy:


 
Source: Yahoo Finance


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Duke Energy Corporation (DUK): Free Stock Analysis Report
 
SPDR-UTIL SELS (XLU): ETF Research Reports
 
VANECK-URNM+NUC (NLR): ETF Research Reports
 
ISHARS-US UTIL (IDU): ETF Research Reports
 
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