Duke Energy’s 2Q profit down 21 percent on falling demand from industrial customers

Duke Energy’s 2Q profit hurt as energy demand ebbs

COLUMBUS, Ohio — Power company Duke Energy said Tuesday that its second-quarter earnings fell as demand for power from industrial customers continues to slide because of the recession.

Charlotte, N.C.-based Duke said Tuesday that it made $276 million, or 21 cents per share, for the quarter ended June 30 compared with profit of $351 million, or 28 cents a share, in the year ago quarter. Revenue fell to $2.9 billion from $3.2 billion.

Discounting one-time charges, Duke said it made 26 cents a share.

Analysts surveyed by Thomson Reuters expected Duke to report profit of 25 cents a share on revenue of $3.17 billion.

Duke said industrial sales in the Carolinas were off 18.5 percent in the quarter. In the Midwest, industrial sales fell 20.9 percent.

Like other utilities, Duke has been working to manage costs during the recession. Operating expenses were down $181 million during the quarter compared with a year ago.

“Sales have been off. Controlling our costs has allowed us to perform as well as we did,” Jim Rogers, Duke’s chairman, president and CEO, said in an interview.

Industrial demand has been particularly weak nationwide with sales falling 12 percent in the first quarter of this year from a year ago, according to the Energy Information Administration. Total consumption nationwide is expected to fall 2 percent this year and rise 0.8 percent next year.

Chief Financial Officer Lynn Good said Duke’s industrial customers are indicating that business is stabilizing. Automaker BMW is ramping up production at its plant in South Carolina in September and some steel customers suggest business is beginning to improve, she said.

Year to date, Duke has made $620 million, or 48 cents per share, compared with profit of $816 million, or 63 cents, per share in the first half of 2008. Revenue has fallen to $6.2 billion this year compared with $6.6 billion for the first half of 2008.

Duke shares added a penny to $15.58 Tuesday. The shares have traded between $11.72 and $19.10 over the past year.

Duke is one of the largest electric power companies in the United States with about 4 million customers in the Carolinas, Ohio, Kentucky and Indiana. It also has about 500,000 gas customers in Ohio and Kentucky and generates electricity in Latin America.