Duke Energy reported this morning that Progress Energy's second-quarter earnings were sluggish because of rising operating costs and nuclear problems.
The earnings are likely to be a drag on Duke's overall performance and are expected to raise questions later this morning among Wall Street analysts about Duke's troubled merger integration with Progress Energy.
The disappointing earnings closely track public testimony Duke officials made last month before the N.C. Utilities Commission to justify the forced resignation of CEO Bill Johnson. Johnson, who had run Progress since 2007, was to be CEO of the combined Duke, but the company's board decided to remove him, blaming his leadership skills.
Charlotte-based Duke issued separate earnings for Raleigh-based Progress because the corporate merger between the two companies did not close until July 2, in the third quarter. This will be the last separate earnings statement for Progress in the company's history.
Progress's ongoing earnings in the second quarter were $80 million, or 27 cents a share. That's down from $211 million, or 71 cents a share, for the same quarter a year earlier.
The Carolinas accounted for the biggest chunk of the earnings drop. Duke attributed the decline to higher nuclear plant outage costs resulting from an additional extended nuclear refueling outage, higher substation and line maintenance costs related to a reliability initiative, and higher employee benefit expenses.
Duke officials will discuss earnings in more detail during an 11 a.m. conference call with Wall Street analysts.
John Murawski has been a full-time newspaper reporter since 1991, with stints at Legal Times and The Chronicle of Philanthropy (both in Washington, DC), The Philadelphia Inquirer and The Palm Beach Post (in South Florida) before arriving at the N&O in December 2004. At the N&O he covers energy (nuclear, coal, renewable, efficiency), hydralic fracturing (or "fracking"), public utilities (both electric and natural gas) and health care. His beat includes Progress Energy, PSNC Energy, Piedmont Natural Gas, PowerSecure International, GlaxoSmithKline, Merck, Novo Nordisk, Pfizer, Biogen Idec and others. You can reach him at 919-829-8932 or
Comments
Merger
Tue, 08/07/2012 - 16:28 — JerimiahI think this paper should do a little more digging about whatsbehind the Commissions love ofBill Johnson! Weren't most of them friends of Johnson at one time or another? And what about the former head of communications at Progress who is now in charge of policy at Duke and is living with someone from the attorney general's office? And isn't the AG a former colleague of Bill Johnson? These earnings reports tell the story and the Commission should be glad that Duke bailed out the ratepayers of Progress. May not have been a great deal for Duke shareholders but come on y'all this earnings story is exactly what the Duke director said a few weeks ago. I hope all the information gets to that prosecutor the commission hired because this is all about egos and not the ratepayers of NC. if Jim Rogers was going to lead the company all along you are telling me they wouldn't have approved the merger? This investigation of nothin is what's bringing the stock down and shareholders should be suing the commission. Stop acting like some communist country and let duke get back to what they do best. Making electricity.