Weather, Sale Of Midwest Operation Hit Duke's Profits
Duke Energy's profits fell in the first quarter compared with a year ago because of weather issues and income lost from operations it sold. But executives say the company is on track to meet its profit target for the full year.
Warmer weather this winter reduced demand for energy - and Duke's revenues. And cleanups after winter storms pushed up costs. At the same time, Duke’s revenues declined because of the sale of its Midwest power generation division a year ago.
Still, chief financial officer Steve Young called it a "solid quarter,"
"If you're looking at our remaining businesses and you pull out weather and you pull out the sale of the Midwest generation, then you start to see a pretty good picture for us," Young said.
Despite lower profits in the first quarter, he said the company expects to hit its previous profit estimates for the full year, between $4.50 and $4.70 a share.
Duke earned $694 million in the quarter that ended March 31st, or $1.13 per share, adjusted for the Midwest sale and other items. That was 11 cents below a year ago, and a penny short of the average estimate of analysts reported by First Call. A year ago, Duke's profit was $864 million, or $1.24 a share.
Revenues were $5.6 billion, down from just over 6 billion.
Duke's unpredictable international operations, primarily in South America, booked a big chunk of tax savings. The company said last year it is looking to sell the units. Young said the company has seen "significant interest" from prospective buyers those businesses and hopes to narrow the field this summer.
CEO Lynn Good told analysts on a conference call the company is continuing its shift toward regulated and contract businesses, which have more reliable earnings. Among those is the purchase of Piedmont Natural Gas. State regulators will hold hearings on the deal this summer.
Duke holds its annual meeting in Charlotte on Thursday.
Read the full press release and earnings statement on Duke's website.