Duke Energy Q3 Results Miss Estimates, But Boosts 2013 Outlook

(RTTNews) - Electric utility Duke Energy Corp. (DUK) reported Wednesday a profit for the third quarter that surged from last year, reflecting lower operating expenses and absence of progress merger costs this year. However, both adjusted earnings per share and quarterly revenues missed analysts' expectations. The company raised the low end of its adjusted earnings guidance range for the full-year 2013.

"Our third quarter results were supported by the constructive regulatory outcomes we achieved this year," President and CEO Lynn Good said.

The company noted that revised customer rates, increased weather-normalized retail volumes and wholesale net margins at its regulated businesses were partially offset by unfavorable weather and higher depreciation and amortization expense.

Charlotte, North Carolina-based Duke Energy reported net income of $1.0 billion or $1.42 per share for the third quarter, sharply higher than $594 million or $0.85 per share in the prior-year quarter.

Income from continuing operations for the quarter surged to $994 million or $1.40 per share from $594 million or $0.84 per share last year.

Excluding items, adjusted net income for the quarter was $1.46 per share, compared to last year's $1.47 per share. On average, 17 analysts polled by Thomson Reuters expected the company to report earnings of $1.51 per share for the quarter. Analysts estimates typically exclude special items.

Total operating revenues for the quarter edged down to $6.71 billion from $6.72 billion in the same quarter last year, and missed seven Wall Street analysts' consensus estimate of $7.32 billion.

Regulated electric revenues edged down to $5.72 billion from $5.76 billion, while non-regulated electric, natural gas, and other revenues grew to $908 million from $882 million and regulated natural gas revenues were $83 million, up from $77 million in the prior-year quarter.

The company noted that U.S. franchised electric & gas, its largest business unit, overcame unfavorable weather, as well as higher depreciation and amortization expenses through increased pricing, favorable retail volumes and wholesale net margins.

U.S. Franchised Electric and Gas segment reported adjusted segment income of $923 million, up from $907 million, and international Energy adjusted segment income grew to $116 million from $103 million, while commercial power segment recorded adjusted segment income of $15 million, down from $31 million in the year-ago quarter.

Operating income for the quarter was $1.74 billion, up from $1.08 billion last year, while total operating expenses declined to $4.97 billion from last year's $5.66 billion.

Looking ahead to fiscal 2013, Duke Energy raised the low end of its adjusted earnings guidance range to $4.25 to $4.45 per share, compared to the prior forecast of $4.20 to $4.45 per share. Street is currently looking for full-year 2013 earnings of $4.30 per share.

"We have successfully achieved the near-term priorities we established a year ago and are well-positioned to deliver on our commitments to customers, communities and investors. Our ongoing focus is to deliver on the promises we made after our merger with Progress Energy - to leverage our scale in order to maximize the efficiency of our operational and financial performance," Good added.

DUK closed Tuesday's regular trading session at $72.45, down $0.11 on a volume of 3.64 million shares. In the past 52-week period, the stock has been trading in a range of $59.63 to $75.46.