Electric utility Duke Energy Corp. (DUK) on Friday reported a profit for the first quarter that more than doubled from last year, primarily aided by the inclusion of earnings from Progress Energy.
Results also benefited from favorable weather and revised customer rates in the Carolinas. Revenue for the quarter beat analysts' estimates. Looking ahead, the company affirmed its earnings outlook for fiscal 2013.
In July 2012, North Carolina-based Duke Energy closed its multi-billion dollar acquisition of Progress Energy in a deal that created the largest electric utility company in the U.S., providing service to about 7 million customers.
Jim Rogers, chairman, president and CEO said, "Our first quarter earnings were consistent with our internal plan and we are affirming our 2013 earnings guidance range. Our operational performance was strong, as highlighted by our 97.1 percent nuclear capacity factor, reflecting our continuing focus on optimizing the performance of our nuclear fleet."
U.S. Franchised Electric and Gas segment reported 91 percent growth in adjusted segment income for the quarter, primarily reflecting the addition of Progress Energy's regulated utility operations in the Carolinas and Florida.
However, International Energy segment saw a 32 percent decline in adjusted segment income to $97 million, due to lower volumes and higher purchased power costs in Brazil as a result of a delay in the rainy season, in addition to unfavorable exchange rates primarily in Brazil.
Commercial Power segment recorded an 80 percent plunge in adjusted segment income to $6 million, as the segment experienced lower results from the Midwest coal and gas generation fleets primarily due to lower PJM capacity revenues. These results were partially offset by favorable margins at Duke Energy Retail.
Duke Energy's first-quarter net income was $634 million or $0.89 per share, up from $295 million or $0.66 per share in the year-ago period.
Adjusted earnings per share for the quarter were $1.02, compared to $1.13 in the previous-year quarter. On average, twelve analysts polled by Thomson Reuters expected the company to earn $1.04 per share for the year. Analysts estimates typically exclude special items.
Adjusted results for the quarter reflect the addition of earnings from Progress Energy, favorable weather and revised customer rates for Duke Energy Carolinas. These were offset by the impact of share dilution from the merger and less favorable results from the company's Commercial Power and International Energy units.
Total operating revenues for the quarter grew 63 percent to $5.90 billion from $3.63 billion in the same period last year. Analysts had a consensus revenue estimate of $5.74 billion.
Looking ahead to fiscal 2013, Duke Energy affirmed its outlook for adjusted earnings in a range of $4.20 to $4.45 per share. Analysts expect the company to earn $4.33 per share for the year.
In Friday's regular session, DUK is trading at $75.14, up $0.36 or 0.48 percent on a volume of 12,024 shares.
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