(RTTNews) - Electric utility Duke Energy Corp. (DUK: News ) on Tuesday reported a 21% decline in profit for the second quarter from last year as the company continued to experience lower demand for power from industrial consumers amid the recession. The results for the latest quarter were also impacted by mark-to-market losses on economic hedges. Adjusted earnings per share for the quarter declined, but matched analysts' consensus estimate.

The utility sector is more or less protected from general factors such as consumer sentiment amid the severe economic downturn, as it is difficult for people to live without these services. They are highly regulated and have less competition as the territories are more or less insulated from peers, resulting in only one electricity provider in most towns. Also, their revenues are consistent as customers pay the bills in time for continuity of service.

However, the economic crisis has forced people to be more prudent in their electricity usage. The weather also has a key role in determining electricity usage, as cooler weather translates to less use of electricity.

Second-Quarter Results

For the second quarter, the Charlotte, North Carolina-based company said that net income attributable to the company was $276 million, or $0.21 per share, down from $351 million, or $0.28 per share, in the same period last year.

The results for the latest quarter were negatively impacted by Crescent-related guarantees and tax adjustments of $0.01 per share, international transmission adjustment of $0.02 per share, and mark-to-market losses on economic hedges of $0.02 per share.
The year-ago quarter's results were negatively impacted by Crescent project impairments of $0.05 per share, offset by a gain mark-to-market gains on economic hedges of $0.05 per share.

Adjusted earnings per share for the latest quarter were $334 million, or $0.26 per share, down from $337 million, or $0.27 per share, in the year-ago period. Analysts polled by Thomson Reuters expected the company to report earnings of $0.26 per share for the quarter. Analysts' estimates typically exclude special items.

Operating revenues for the quarter declined 9.9% to $2.91 billion from $3.23 billion in the prior-year quarter, and missed analysts' consensus revenue estimate for the quarter of $3.18 billion.

James Rogers, chairman, president and chief executive officer of Duke Energy, said, "I am pleased with our results through the first half of the year in this challenging environment. Our industrial sales are being negatively impacted by current economic conditions and we have largely offset this impact with our strong operational performance and cost management. Industrial sales are showing signs of stabilization, but we do not see significant improvement in the near term."

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