Earnings season is in full swing, with huge numbers of companies having already given their latest numbers to investors. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Let's turn to Duke Energy (NYSE:DUK). The utility giant has been digesting its massive merger with Progress Energy while at the same time dealing with the massive disruptions in the coal and natural gas markets that have changed the way utilities generate electricity. Let's take an early look at what's been happening with Duke Energy over the past quarter and what we're likely to see in its quarterly report on Wednesday.

Stats on Duke Energy



Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$5.55 billion

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

Will Duke Energy electrify its stock?
Analysts have reined in their earnings estimates for Duke Energy modestly in the past two months, cutting earnings-per-share guesses by $0.03. But that hasn't made investors less optimistic, as the stock has climbed nearly 12% since early November.

More than anything else, cheap natural gas has transformed the utility industry lately. Duke recently announced that it would retire two of its coal plants as part of a larger move toward natural gas, and rival Southern (NYSE:SO) could find it cheaper simply to close down its coal-fired plants rather than implement the required pollution controls to meet EPA guidelines. Cheap gas may also have helped Duke in its decision to retire a Florida nuclear plant, as nuclear power giant Exelon (NASDAQ:EXC) has seen pressure in its stock for quite a while due to concerns about nuclear power following the Fukushima Daiichi incident in Japan two years ago.

Interestingly, though, nat gas gluts haven't stemmed the trend toward renewable energy development. Duke, Exelon, and NRG Energy (NYSE:NRG) have all boosted their presence in the renewables space, with Duke focusing on two wind-farm projects in Texas. Even though NRG is the largest solar developer in the country, Duke has stayed in the solar business as well, with its recently finished solar farms in North Carolina expected to supply customers throughout the eastern part of the state.

The big question that investors should look for Duke to answer is how the utility expects to deal with the impact of energy-efficiency programs and consequent reductions in electricity use. To succeed, Duke needs to concentrate on keeping margins as high as possible, and switching to the most cost-efficient generation fuel will likely be a key component in Duke's strategy going forward.

Click here to add Duke Energy to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.