Duk Worker

Source: Duke Energy Corp 

Duke Energy Corp (NYSE:DUK) reported earnings today, missing on both top and bottom lines. But quarterly numbers aren't everything, and Duke Energy has been making major moves recently. Here's what you need to know.

The Numbers
On the top line, Duke Energy Corp's Q3 2014 operating revenue clocked in at $6.4 billion. That's a $0.2 billion improvement over Q3 2013, but is well below analyst expectations of $7.2 billion.

On the bottom line, Duke's adjusted earnings per share (EPS) came in below analyst estimates. The company's $1.40 adjusted EPS missed analyst expectations by $0.12, and also represents a six cent slump from 2013's third quarter.

This bottom line miss comes in contrast to The Southern Company's (NYSE:SO) earnings beat last week. The Southern Company has exceeded earnings expectations for four straight quarters, but a behind-schedule and over-budget power plant still puts this utility's future up in the air.

Looking ahead, the utility is maintaining its 2014 earnings guidance, expecting full-year adjusted EPS to come in between $4.50 and $4.65.

Regulation, Regulation, Regulation

Elec

Source: Duke Energy Corp 

While Duke Energy Corp's revenue miss might seem substantial, its regulated subsidiaries didn't take a hit. Regulated electric, which accounts for a whopping 92% of overall sales increased a seasonally adjusted $176 million to $5,861 million. An increase in year-to-date regulated earnings also hints at longer-term sustainable income. A major driver behind this increase came from hikes in customer rates.

Regulated utilities can boost profit primarily through two mechanisms: increased use and more expensive rates. Since neither population or electricity use are booming in the United States, it's rate increases like Duke has secured that allow Duke to rake in more revenue.

But growth is good, too
Since CEO Lynn Good took the stage in July 2013, growth has been a major component of her platform. In this latest update, Good updated investors on her latest growth strategies:

We [also] achieved several milestones in our growth strategy as we prepare to serve the evolving needs of our customers into the future. We're investing in solar projects and new natural gas generation; planning a major grid modernization in Indiana; and proposing to invest in the Atlantic Coast Pipeline that will bring diverse natural gas supplies to eastern North Carolina.

Growth in certain areas can go hand-in-hand with downsizing elsewhere, and Good made special mention of Duke's decision to sell its competitive Midwest generation fleet to Dynegy Inc (NYSE:DYN).

That same mentality could also spell "sell" for some of Duke's international business. Its Latin America operations knocked $0.05 off its earnings per share this quarter, due to an outage in Chile and underperforming hydroelectric in Brazil. Duke's Brazil investments have been bothering the utility for a while, and the company's quest for more stable earnings may mean another asset sale soon.

Duk Q

Source: Duke Energy Corporation; Capivara hydroelectric dam .

Duke Energy Corp may have missed on its top and bottom lines, but the utility isn't a bad investment. This quarter isn't reflective of its stronger earnings past, and its ceaseless and substantial dividend history makes it an important asset for any income investor. There are reasons to buy Duke Energy Corp and reasons to sell it. These latest results shouldn't sway your own investing thesis much, either way.

Justin Loiseau has no position in any stocks mentioned. The Motley Fool recommends Southern Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.