Charlotte-based Duke Energy reported third quarter earnings Friday morning that surged from the same period last year and that topped Wall Street expectations thanks in part to warmer summer temperatures throughout the Southeast and Midwest.
Duke Energy is in the midst of combining with another Charlotte-based energy company, Piedmont Natural Gas. In a call with the Observer Friday morning, Steve Young, Duke’s chief financial officer, said the integration of the two companies is going “very well.”
For the three months ending Sept. 30, Duke Energy reported earnings of $1.18 billion, up 26 percent from the same period a year ago, according to a securities filing. On an adjusted basis, earnings were $1.68 a share, up from $1.47 a share a year ago and above the $1.56 a share estimate from analysts surveyed by Zacks Investment Research.
The company said revenue for the quarter was $6.82 billion, rising 5.2 percent from a year ago. Duke Energy said warm weather throughout its service territories helped driver higher sales volumes throughout the quarter.
Duke also cited “ongoing cost management efforts” as a reason for the profit jump. Young said that refers to lowering outage costs at plants, making coal fleets more efficiently and examining resources as well, including some “severance capabilities.” Young would not provide further detail about layoffs, but said it’s an “ongoing effort to reduce costs.”
“We think it was a great quarter for us and are very excited about our portfolio transition,” Young said.
Last month, Duke announced plans to sell its business in Latin America for a total of $2.4 billion. The company has said the deal is part of a move away from investments with uncertain returns toward the safety of more predictable regulated businesses.
Also last month, Duke completed its $4.9 billion purchase of Piedmont Natural Gas, also based in Charlotte. The two companies see the deal as a way to expand their investments in natural gas infrastructure, especially in pipelines and storage.
Duke has said Piedmont will retain its name, operating as a Duke business unit. Duke CEO Lynn Good will head the combined company.
Looking ahead, Young said Duke expects incremental costs in the fourth quarter of around $200 million associated with Hurricane Matthew, a “very significant storm,” he said, that resulted in 1.7 million customer power outages, most of which were in eastern North Carolina.
Excluding those costs, Duke Energy said it’s trending toward the high end of its original 2016 earnings guidance of $4.50-$4.70 a share.
In pre-market trading Friday, Duke Energy’s shares were down 0.03 percent at $77.98. The Associated Press contributed.