Warmer Summer Boosts Duke Profit; Matthew Repairs Cost $200M
Updated 2:34 p.m.
Duke Energy says its response to Hurricane Matthew last month could end up costing about $200 million. That news came as CEO Lynn Good told Wall Street analysts the company's latest quarterly profits were up.
The nation's largest utility said warmer summer weather boosted energy use - and profits - during the quarter that ended Sept. 30. Cost-cutting also helped lift profits to just under $1.2 billion dollars, up from $932 million a year earlier.
Good said Duke sent 10,000 workers across the Carolinas to restore power and repair storm damage after Matthew.
"In terms of customer outages, Hurricane Matthew is the fifth worst storm to hit the Duke Energy Carolinas, Duke Energy Progress service area, with damage similar in scale to Hurricane Floyd in 1999 and Hurricane Hugo in 1989," Good said.
Duke's third-quarter earnings per share were $1.70. Excluding legal costs, income from closed or sold businesses, and other one-time items, the company earned $1.68 per share. That was up 21 cents from a year ago, and beat Wall Street's expectations.
Chief Financial Officer Steve Young said Duke expects total profits this year to be at the higher end of the range it gave analysts earlier this year - $4.50 to $4.70 per share. That's excluding cleanup costs for Matthew.
Good said the company would include Matthew cleanup costs in its next planned rate-hike requests.
The quarter saw more big moves in what the company calls its "strategic transition." It's focusing more on consumer energy and more predictable commercial operations. Young said the company now has a better mix of businesses.
"We know how to build these operate them, to deal with stakeholders, customers, regulators and so forth, over long periods of time, so we're excited about the growth prospects going forward," Young said in an interview with WFAE.
Over the past month, Duke completed its purchase of Piedmont Natural Gas and announced long-awaited deals to sell its Latin American power businesses. Those sales should be done by early 2017, Young said.
As part of that shift in focus, the company told analysts Friday it will revise the way it reports financial results. Until now, the company divided its business into Regulated Utilities, International Energy and Commercial Portfolio, including its wind and solar power business aimed at corporate customers.
Beginning this quarter, Duke now will report revenue and profits in three re-aligned segments:
- Electric utilities and infrastructure - Including consumer electric utilities in the Carolinas, Florida, Ohio, Kentucky, and Indiana as well as the company's commercial power transmission lines.
- Gas utilities and infrastructure - Including newly acquired Piedmont Natural Gas and other local gas units in Ohio and Kentucky. It also includes Duke and Piedmont's investments in planned gas pipelines, such as the Atlantic Coast Pipeline through Virginia and North Carolina, Sabal Trail under construction in Florida, and Constitution in New York state. Good said Friday the Atlantic Coast Pipeline's completion has been pushed back from last 2018 to the second half of 2019. The Constitution pipeline also is delayed by lawsuits over New York's decision not to grant a water quality certificate, Good said.
- Commercial renewables - Duke is separating its fast-growing commercial solar and wind business, Duke Energy Renewables, into its own segment.
Duke shares were down slightly Friday afternoon.