Duke Energy 4Q Earnings Exceed Expectations
Adjusted for the effect of weather, electricity demand grew slightly less than 1 percent for the year, according to Duke Chief Financial Officer Lynn Good. She said Wednesday that's about how fast she expects demand to grow in the coming months and years.
Good said that in Duke's service territory, auto manufacturers and metals companies have been increasing activity but textile manufacturers and chemical companies have been cutting back.
Rogers said lower power demand is likely to affect the entire industry. That could mean cost-cutting in the months ahead. He cited the need to lower costs as a chief reason behind his company's acquisition of Progress Energy, and said the combination of the companies will function as a catalyst to lower the company's costs.
Seven hundred employees have accepted buyouts to leave the company since the merger was completed, and Duke expects another 400 to leave in 2013. Duke took a charge of $164 million in the quarter, accounting for 13 cents per share, to pay merger-related expenses.For all of 2012, the company posted net income of $1.77 billion, up from $1.71 billion in 2011. Revenue rose to $19.78 billion from $14.62 billion as the company benefited from 6 months of revenue from Progress Energy after the merger. Over the past three months, Duke has resolved three issues that have hung over the company and concerned investors. In December the company reached a settlement with North Carolina regulators over surprise executive changes in the hours after Duke's merger with Progress was completed. Rogers will retire by the end of this year as part of the settlement. Also in December, Indiana regulators approved a settlement over payment terms for coal plant there that is well over budget. Customers will pay $2.6 billion and Duke will absorb $900 million. The plant was originally supposed to have cost $1.9 billion. The overruns cost Duke $28 million in the quarter, or 2 cents per share. Cost overruns cost the company $628 million in 2012.
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