Duke Energy profits fall in first quarter

Duke Energy chairman, president and CEO Lynn Good.
Duke Energy chairman, president and CEO Lynn Good.

Duke Energy’s first quarter profits tumbled nearly 20 percent from the same period a year ago, reflecting mild winter weather and the sale of power plants in the Midwest.

Duke reported Tuesday that it earned $694 million for the quarter on $5.6 billion in revenue, compared to the $864 million in net income for the first quarter of 2015.

Reported earnings per share of $1.01 compared to the $1.22 a share of the first quarter last year. Adjusted for one-time costs, earnings of $1.13 matched the expectations of analysts surveyed by Thomson Reuters.

Duke said it is still on track to meet its adjusted earnings goal for the year of $4.50 to $4.70 a share.

One of its two Carolinas utilities, Duke Energy Progress, may seek a rate hike this summer for 165,000 customers in northeastern South Carolina. It has been more than 20 years since that utility has filed a rate case in the state, Duke said.

Chairman and CEO Lynn Good, in a statement announcing the earnings, highlighted Duke’s quick response to winter storm damage and its investments in natural gas, renewable energy and grid updates.

Mild winter weather in the Carolinas and Midwest bit 10 cents a share from the results of Duke’s regulated utilities. The $2.8 billion sale of merchant power plants the Midwest last year took 12 cents a share from its commercial business.

While Duke’s utility customer base grew 1.3 percent from a year earlier, retail sales dropped 3.9 percent.

But international business, which Duke said in February it would sell after dragging down 2015 earnings, reported a 13-cent-a-share earnings increase on lower tax expenses and improved performance by hydroelectric power plants in Brazil.

Good, in an interview, said Duke expected that rebound. The company will move forward with selling the business, she said, but offered no timeline.

The sale of the international business would become part of a move away from investments with uncertain returns toward the safety of more predictable regulated businesses. Among those was the sale of the Midwestern power plants to Dynegy, which led to a $1.5 billion stock buy-back by Duke that added 4 cents to first-quarter earnings.

Duke’s $4.9 billion acquisition of Charlotte-based Piedmont Natural Gas still needs approval in North Carolina but is expected to close by the end of this year. A hearing before the N.C. Utilities Commission will be held in July.

Good said the extension of federal tax credits, meanwhile, offers opportunities for deeper investments in renewable energy. Duke last week said it plans to own or purchase 8,000 megawatts of wind, solar and biomass capacity by 2020 – a 33 percent jump from its goal set in 2013.

Duke is the nation’s largest electric utility, with 7.3 million customers in six states.

Duke said in March that it expects to shed 900 jobs this year, most of them in the Carolinas, as part of a cost-cutting initiative begun in 2015. The company ended 2015 with about 29,000 employees.

The company’s annual shareholder meeting is Thursday in Charlotte. Protests by environmental advocates are expected to focus on Duke’s use of fossil fuels and handling of potentially toxic coal ash.

Bruce Henderson: 704-358-5051, @bhender