Duke Energy, which is buying Raleigh-based Progress Energy, reported second-quarter earnings that beat analysts’ expectations, Charlotte Observer staff writer Bruce Henderson reports.
The 33 cents a share in diluted earnings topped Wall Street analysts’ forecasts by 2 cents. Revenues rose to $3.5 billion, up 7 percent from the same quarter of 2010.
Profit at Duke’s largest sector, its regulated gas and electric businesses, dropped 8 percent for the quarter. Sales fell slightly in the Carolinas and Midwest, as the summer’s hot weather put less demand on air conditioning than in the even more torrid 2010. Storm damage repairs also ate into profit.
Not counting weather factors, residential sales improved slightly, commercial sales fell a little and industrial sales were flat, chief financial officer Lynn Good said. “We continue to see some volatility,” she said.
Duke also saw a boost from its international operations, including hydroelectric dams that produce power in Brazil.
As with Progress, Duke's results offer a snapshot of the broader economy, because they're tied to electricity demand from residential and industrial customers across North Carolina.
“The headline is that we are blocking and tackling our way through these difficult times,” CEO Jim Rogers added. Duke doesn’t expect sales to rebound to pre-recession strength until 2015, he said.
Duke has a full plate for the rest of the year. Its merger with Progress Energy is before state and federal regulators. The N.C. Utilities Commission will consider the 15 percent overall rate hike Duke is seeking for its 1.8 million N.C. customers, including 170,000 in the western Triangle.
The companies have said they expect to win regulatory approval and close the deal this year. The combined utility will be the nation's largest, with 7.1 million customers.
Progress and Duke shareholders are scheduled to vote on the union on Aug. 23.
Progress will report its quarterly results on Thursday.
The companies have essentially frozen non-essential hiring until the deal closes, and plan to offer buyouts to thousands of employees this fall to minimize layoffs later.
Duke is also battling huge cost overruns, and conflict-of-interest charges, surrounding the Edwardsport coal-fired power plant it’s building in Indiana. Consumer and environmental groups have charged that, because of bad management and insider dealing with state regulators, customers should not have to pay $530 million in overruns.
Duke shares fell 3 cents to $18.67 in morning trading. Including dividends, the stock is up 13 percent in the past year.