Duke Kicks Off Sale Process for $4 Billion Renewable Unit
Duke kicked off a sale process for its commercial renewable-energy business in what would be one of the US’s biggest clean-power deals ever.
(Bloomberg) -- Duke Energy Corp. has initiated a sale process for its commercial renewable business following a strategic review announced in August in what would be one of the US’s biggest renewable transaction ever.
“We’re encouraged by the market response to our Commercial Renewables business and will proceed with a sale targeting a second-quarter 2023 closing,” Chief Executive Officer Lynn Good said in a press release.
Analysts have cheered a potential sale as a good way for Duke to focus on its regulated utilities, which investors often reward with higher price-to-earnings ratio. “We expect the proceeds to be put toward debt paydown to strengthen the balance sheet and extend the period of not needing to issue equity beyond 2026,” Morgan Stanley analysts wrote in an Oct. 5 note.
Duke said in its earnings release that its lower third-quarter results came in part because it placed fewer commercial renewable projects into service.
The utility giant posted operating revenue for the fiscal third quarter of $7.97 billion, beating a consensus estimate of $7.31 billion. Adjusted earnings per share for the quarter was $1.78, slightly falling short of analysts’ projection of $1.84.
See more earnings highlights here:
- Duke Energy 3Q Operating Revenue Beats Estimates
- Duke Review of $4 Billion Renewable Unit in Focus: Preview
The spinoff comes as Duke builds more clean power generation within its regulated business.
The company is holding an earnings call at 9 a.m. New York time. Duke shares are up 0.2% in premarket trading.
(Story updates with analyst commentary and more details from release in third and fourth paragraphs.)
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