Duke Energy and Alinda Form JV - Analyst Blog

Duke Energy Corporation (DUK) and Alinda Capital Partners LLC have formed a joint venture, as previously agreed upon, to grow DukeNet Communications LLC. Also, DukeNet announced the closure of a $150 million senior-secured credit facility.

Duke Energy and Alinda had agreed on said joint venture June 25, 2010. As part of the agreement, Alinda, a fund management company, acquired a 50% ownership interest in DukeNet from Duke Energy for $137 million in cash. Duke Energy owns the remaining 50% of DukeNet.

DukeNet's new $150 million credit facility has a five-year maturity period. DukeNet plans to use these funds to expand its telecommunications network, and for future acquisitions and general corporate purposes.

Headquartered in Charlotte, North Carolina, DukeNet is one of the largest wholesale fiber-based carriers in the Southeast. It develops and manages fiber optic communications systems and controls more than 5,300 miles of fiber-optic network capacity.

Charlotte, North Carolina-based Duke Energy Corp. is a diversified energy company with a portfolio of domestic and international, natural gas and electric, regulated and unregulated businesses. Its regulated utility operations serve approximately 4 million customers in the five states of North Carolina, South Carolina, Indiana, Ohio and Kentucky, comprising a population of approximately 11 million. Duke Energy's stable U.S. electricity and gas operations provide a relatively stable and growing earnings stream.

Duke Energy's Commercial Power and International Business segments own and operate diverse power generation assets in North America and Latin America, including a growing portfolio of renewable energy assets in the U.S.

Duke Energy expects to release its fiscal 2010 earnings on February 7, 2011. The company expects earnings for the full year 2010 to come in the range of $1.40–$1.45 per share, in sync with the Zacks Consensus estimate of $1.41 for fiscal 2010. The Zacks Consensus Estimate for fiscal 2011 is $1.34 per share.

Duke Energy currently has a short term Zacks #3 Rank (Hold), which translates into our long-term Neutral recommendation for the stock. This is consistent with the ranks of its closest peers, American Electric Power Co. Inc. (AEP) and Progress Energy Inc. (PGN).

 
AMER ELEC PWR (AEP): Free Stock Analysis Report
 
DUKE ENERGY CP (DUK): Free Stock Analysis Report
 
PROGRESS ENERGY (PGN): Free Stock Analysis Report
 
Zacks Investment Research