Duke Earnings Drag In Second Quarter
A lackluster earnings report from Duke Energy out today is evidence the company's year-old merger with Progress continues to be a mixed bag for the bottom line.
Duke fell short of analyst expectations during the second quarter – partly because unusually cool, wet weather in the Carolinas meant fewer customers cranking those electricity-hungry air conditioners.
But the larger problem was Crystal River 3 (that's the broken Progress Energy nuclear plant in Florida that Duke is trying to shut down completely). A legal settlement from that mess made a $295 million hit on Duke's earnings last quarter.
Another $87 million charge came from the decision to cancel an engineering and construction project on a new nuclear plant Progress had hoped to build in Levy County Florida.
But Progress Energy's not a complete drag: adding the company's power plants to Duke's existing fleet has made for some efficiency and cost savings. Plus a recently approved rate increase for Progress Energy Carolinas customers and pending increases for Duke Energy customers in North and South Carolina will make next quarter's picture rosier, says Duke Energy CEO Lynn Good.
On a call with investors this morning, she said she expects to see only small growth in Duke's customer base for the foreseeable future, which means cutting costs to eke out more profits will be key.
"I think focusing on cost structure has become a way of life and will continue to be such," said Good.
Duke Energy says it earned $339 million, or 48 cents per share, from April to June of this year. That's down from $444 million, or 99 cents per share, a year ago.