NEW YORK (AP) — Duke Energy, the nation's largest electric utility by market value, reported stronger-than-expected earnings for the third quarter but company executives said the outlook for strong economic growth in the U.S. is dim.
The company said more customers signed up for service, which is a hopeful sign, but demand for electricity from homes and businesses has been weak. Jim Rogers, Duke's CEO, said in an interview that the company is operating under the expectation that electricity demand, excluding the effects of weather, will grow at a rate of less than 1 percent.
He said that with slow population growth in the U.S., the financial crisis in Europe, and diminished expectations of growth in China, "People look around and see there's no part of the world that can really juice growth."
"We are in a slow growth period," he said.
Still, Duke reported solid third quarter results Thursday, the company's first quarterly results since acquiring Progress Energy in late June to become the largest U.S. utility. The Charlotte, N.C.-based company serves 7 million customers in the Carolinas, Florida, Indiana, Kentucky and Ohio.
Duke reported earnings of $594 million, or 85 cents per share, on revenue of $6.72 billion. The company said it earned $1.47 per share when it excluded $457 million in deal-related costs, a $180 million increase in the costs it must pay to complete a new coal plant in Indiana and other unusual items.
Analysts surveyed by FactSet had expected Duke to earn an adjusted $1.44 per share on revenue of $6.79 billion.
Duke Energy Corp. shares fell 38 cents to close at $62.56 Thursday. Its shares have traded in a 52-week range of $58.74 to $71.13.
Andy Smith, an analyst at Edward Jones, welcomed the company's customer growth in both its Progress and Duke territories, and said he expects company results to improve in the coming months as it seeks to increase rates in the Carolinas and begins to realize savings from the merger.
"It looks like a pretty solid quarter," Smith said.
Duke was allowed to charge customers in the Carolinas higher rates in the quarter, which helped results. But milder weather in its service territory reduced demand for electricity to run air conditioners.