Duke Energy 3Q earnings hurt by mild weather
Sales of electricity to industrial customers declined 1.1 percent in the quarter. Duke CFO Lynn Good said its automotive customers were operating at full strength but its metals customers were pulling back. "The economy has been sluggish," she said in an interview.
Duke's commercial power division, which generates electricity and sells it into wholesale markets in the Midwest, suffered from lower wholesale power prices, especially in Ohio.
Duke also owns and manages power plants in Latin America. Those results suffered from unfavorable currency exchange rates.
The company said it remains on track to post full-year adjusted earnings of $4.20 to $4.35 per share.
A few major issues face the company in the coming months, however. The company is being investigated by the North Carolina Utilities Commission over the way it handled changes in executive leadership after the merger with Progress Energy. Jim Rogers was to cede the CEO job to former Progress chief Bill Johnson. Hours after the merger was completed, however, Johnson was ousted and Rogers was give the CEO job back.
Johnson was picked this week to run the Tennessee Valley Authority, a government-owned corporation that provides electricity to 9 million people in parts of 7 states in the Southeast, beginning in January.
Duke said it is working with the commission on a resolution to the commission's objections.
At the same time, the company is asking the commission to allow it to raise rates for customers in the Progress service territory by $359 million, the first such increase in 25 years. Hearings are set for March. Analysts worry that the controversy over the executive changes at the company will make the commission less inclined to grant Duke all of the rate increase it is requesting.
Also, the company's idled Crystal River nuclear plant in Florida, acquired in the Progress merger, is facing enormous costs to repair cracks in its most important structure. Investors are waiting for a decision by Duke over whether to repair the plant or shut it permanently.
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