Duke, Progress earnings fall; merger plan being revised
Posted February 16, 2012
Duke Energy's (NYSE: DUK) fourth quarter earnings fell 33 percent as mild weather reduced demand for electricity.
Meanwhile, Progress Energy (NYSE: PGN) in Raleigh reported a fourth-quarter loss due in large part to a big settlement with rate payers in Florida.
Progress and Duke are in the process of seeking approval to merge.
Progress reported a decline in revenues to $1.74 billion in the fourth quarter from $2.3 billion a year ago. Annual revenues declined to $8.9 billion from $10.2 billion. Progress said it lost 25 cents per share, citing a $288 million rate settlement with regulators in Florida.
Like Duke, Progress also said milder weather affected sales.
Duke, which is based in Charlotte, earned $288 million, or 22 cents per share, down from $427 million, or 32 cents per share, in the fourth quarter of 2010.
The year-earlier results were helped by a sale of a fiber optic company. This year, Duke incurred costs associated with its proposed merger with Progress.
Duke's earnings, adjusted to remove the effects of special items, rose 14 percent to 24 cents per share. Revenue was $3.37 billion. Analysts polled by FactSet expected earnings of 21 cents per share on revenue of $3.36 billion.
Results were helped by strong performance of its international operations.
For the full year, Duke Energy Corp. earned $1.71 billion on revenue of $14.53 billion.
Duke and Progress are in the process of changing their merger plan and reapplying for approval. Rogers said he expects to file the new application in the next week.
"We're hoping the third time is the charm," Rogers said.
Progress Energy said Thursday that it lost $76 million in the fourth quarter, down from a profit of $125 million a year earlier. On a per share basis, the company lost 25 cents, down from net income of 42 cents per share a year earlier.
Progress is paying a nearly $300 million refund to Florida customers. That reduced earnings by 60 cents a share, the company said.
Progress also suffered from mild temperatures in the quarter, especially in Florida. There were 71 percent fewer heating degree days, an industry measure used to gauge weather effects, and 5 percent fewer cooling degree days.
Franzen said investors shouldn't be disappointed by Progress's results. The Florida refund was expected and weather — not poor operational performance — accounted for the weaker earnings.
Shares in both Duke and Progress rose slightly more than 1 percent in morning trading.