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.