Duke Reports First-Quarter Loss After Plant Writedowns
Duke Energy Corp. (DUK), the largest U.S. utility owner, reported a first-quarter loss after writing down the value of power plants up for sale as it exits competitive power generation in the Midwest.
The loss of $97 million, or 14 cents a share, compared with net income of $634 million, or 89 cents, a year earlier, Charlotte, North Carolina-based Duke said today in a statement on PR Newswire. Profit excluding one-time items of $1.17 was 5 cents higher than the average of 12 analysts’ estimates compiled by Bloomberg.
Duke is seeking to sell its interests in 13 power plants with a combined capacity of 6,600 megawatts after Ohio regulators denied its request to raise rates. The company said today it would record a pretax charge of $1.4 billion in the first quarter from the sale.
“Anything they’ve accomplished in selling Midwest generation would be relevant to investors,” Kit Konolige, a New York-based analyst for BGC Financial LP, said in an interview before the results were announced.
Demand for heating rose 10 percent from a year earlier for Duke’s 3.1 million customers in North Carolina amid the second-coldest first quarter since 1981, according to the National Climatic Data Center.
Duke said last month the costs of cleaning up an estimated 39,000 tons of wet ash that spilled into the Dan River from a shuttered coal plant in February are not expected “to be material” to the company.
The spill triggered a federal investigation of the state’s oversight of Duke. The permanent relocation of all 33 North Carolina ash ponds, as demanded by several environmental groups, may cost $10 billion and take 30 years, Duke said.
The latest results were announced before the start of regular trading in U.S. markets. The shares have 13 buy, 11 hold and one sell recommendation from analysts.
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