Duke 3Q Profit Falls, Raises Year Target

CHARLOTTE — Duke Energy Corp., one of the nation's largest electric power companies, said Friday its third-quarter profit fell 20 percent hurt by the spin-off of its natural gas operations.

But the Charlotte-based company said it expects to surpass its earnings target for the full year.

Duke earned $607 million, or 48 cents per share, in the three months ended Sept. 30, down from $763 million, or 60 cents per share, during the same period in 2006 when results included the natural gas unit.

Excluding special items and discontinued operations, earnings were 48 cents per share, up from 29 cents per share a year ago.

Analysts forecast a profit of 39 cents per share. Thomson estimates usually exclude one-time items.

Revenue rose 16 percent to $3.82 billion from $3.28 billion during the same period a year earlier. Analysts expected revenue of $3.43 billion.

The company's 2007 earnings will "finish well above" its target $1.15 per share, Duke Energy Chairman and Chief Executive James E. Rogers in a statement accompanying the report

Analysts polled by Thomson Financial forecast the company to earn $1.18 per share this year.

Its shares rose 33 cents to $19.15 in morning trading Friday.

Duke Energy spun off its natural gas unit, now trading as Spectra Energy Corp., to its shareholders in January. Last year, Duke purchased the power company Cinergy Corp.

For the third quarter, Duke Energy's franchised electric and gas unit posted an increase in earnings, mainly driven hotter than normal weather during the period, the addition of Cinergy's regulated utility operations in the Midwest and long-term wholesale contracts. The company's commercial power segment also posted higher results brought on by favorable weather.

"We had a strong quarter," Rogers said in an interview. "Moving forward, we need to continue to keep tight controls on our costs."

Duke continues to work through several proposals with regulators concerning rate cases, building and clean-air permits and energy efficiency.

The company expects decisions in the coming months on two rate increase cases pending in North Carolina and Ohio. Duke Energy agreed earlier this month to cut rates in North Carolina, a reversal of its request last summer to raise rates. Ohio legislators are negotiating with Duke and other utilities to develop a rate framework for after the state's rate stabilization plan expires at the end of 2008.

Duke Energy also has proposed an advanced coal-fired plant in North Carolina, a nuclear plant in South Carolina and a so-called "clean-coal" plant in Indiana.

The company has also filed plans for its "Save-a-Watt" program, which would lower rates for consumers who conserve energy and compensate the company for reductions in energy use.

"We are expecting a lot of regulation outcome in the fourth quarter," Rogers said.

Duke serves about 4 million customers and has about 36,000 megawatts of electric generating capacity in the Midwest and the Carolinas. The company also has more than 4,000 megawatts of electric generation in Latin America.

For the first nine months of the year, Duke Energy reported earnings of $1.26 billion, or 99 cents per share, compared with $1.48 billion, or $1.27 per share, in 2006.

Revenue rose to $9.95 billion from $7.8 billion a year earlier.

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On the Net:

http://www.duke-energy.com

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